Pan Am weathering economic storm

 - April 16, 2008, 10:27 AM

With the opening of its new northern Virginia regional airline training center last fall, Pan Am International Flight Academy served notice of its commitment as “a dependable, credible and trustworthy training partner,” said Ralph Leach, director of regional aircraft training.

Pan Am International Flight Academy, with some 500 employees at 11 locations, was originally established in 1980 by the now defunct Pan American World Airways in Miami. The home offices remain in Miami and the company is now owned by J.W. Childs Associates, a Boston-based investment firm.

The company provides training to more than 200 domestic and foreign carriers. Pan Am acquired SimCom International in 1999 and through it provides business and general aviation training. Pan Am lays claim to being the only flight-training center that provides extensive ATC training to civil aviation agencies worldwide.

The 56,000-sq-ft facility in the Virginia suburbs adjacent to Dulles International Airport is capable of accommodating 10 simulator bays. The eight bays currently in operation contain Dornier 328, Jetstream 31/32, Jetstream 41, BAe 146 and Canadair Regional Jet simulators. The facility also houses cabin-training classrooms, multimedia classrooms, briefing/debriefing rooms and administrative offices.

Since opening the Dulles facility, the academy has expanded its regional training at a variety of other locations as well. The flight academy has relocated a level-C Avro simulator of its kind from the UK to its regional airline training center in Minneapolis, making it the only RJ85 simulator of its kind currently in operation in the Americas. It is the third simulator at this particular center–the other two are level-D Saab 340 simulators (one for the Saab 340B and the other a convertible simulator for the 340A and 340B).

More recently, Pan Am has installed a Canadair Regional Jet training device at the academy’s Career Pilot Development Campus in Deer Valley, Ariz. The device, operational since February, is equipped with a three-channel, wrap-around visual system similar to those used on level-C flight simulators. It provides day, dusk and night scenarios and detailed visual representations of numerous U.S. airports. Its navigational database encompasses the continental U.S.

Earlier this year Boston-Maine Airways selected Pan Am as its Jetstream 31 training provider. Under terms of the three-year contract, the academy will provide both “wet” and “dry” training. Pan Am provides both simulator and instructor for wet training, and Boston-Maine provides the instructor for dry training. Training is being conducted at the academy’s Dulles regional airline training center.

In March the FAA awarded Pan Am a one-year contract to provide Saab 340 training for the administration’s maintenance inspectors. The 12-day course incorporates initial maintenance, engine start/run training and aircraft practical examination. The training will include use of the company’s Saab 340 simulators in Minneapolis. The first class is scheduled to begin this summer.

Business Slump
Nevertheless, the past year for the academy was marked by two low points. The first, according to executive v-p and COO Vito Cutrone, was purely economic. “Business was strong until May when it hit a slump. Then in July and August it started looking good and I remember thinking, ‘We’re back on track and on budget.’ Then came September 11, another low point.”

Business dropped dramatically after September 11, and within three weeks the academy had laid off 25 percent of its workforce. By December, said Cutrone, it had “hit rock bottom.”

On the positive side with regard to September 11, Pan Am International Academy received good press when it was revealed that quick action by some of its instructors last August might have averted an additional attack.

Pan Am president and CEO Wally David said instructors at the Minneapolis training center became suspicious of Zacarias Moussaoui from the first day of initial classroom instruction, when he expressed a desire for “a significant amount of training in a little time.” Following two days of classroom training, Moussaoui had expected to receive 12 hr of Boeing 747-400 flight-simulator training over a four-day period.

On August 14, program managers at the academy discussed Moussaoui and his possible motives in trying to learn communication protocols with ATC. A telephone call to the Minneapolis office of the FBI followed, and Moussaoui was arrested the next day at his hotel by FBI agents and agents of the Immigration and Naturalization Service on charges of visa violation.

“Moussaoui’s motives in getting flight training were questioned by the school,” said David. “His arrest came about as a direct result of the academy being proactive in informing the FBI about its suspicions.”

David further noted that the academy is following guidelines issued by the TSA following September 11 to determine an applicant’s citizenship and to provide application information of non-U.S. citizens to the Department of Justice.

Signs of Recovery
If the academy’s commercial aviation training division was hit hard by the recession and the economic effects of September 11, the first quarter of this year has shown signs of a recovery, with the expansion and new contracts marked by an increase in business of about 25 or 30 percent.

Cutrone attributes the revival in part to regional operators that took up the slack when majors began dropping shorter route segments. In addition, he said, some second- and third-tier major airlines also began adding aircraft as the upper-tier majors got rid of older aircraft and the market glut lowered acquisition costs. The result was an upswing in activity as pilots scrambled for openings in pilot-training schedules to acquire new type ratings.

And with a staff reduced by 25 percent, Cutrone said the company is focused on a “leaner and more efficient operation. We’re still getting more efficient and creating new budget disciplines, so when the industry recovers we’ll be in a position to take advantage of it.”

The company is also keeping a sharp eye on bargains, noting that in the current economic recession, “a $1.5 million simulator can be had for one-third of that amount.”

Looking further into the future, Cutrone said plans include new facilities, “probably on the West Coast and possibly a key location in Europe, where we would like to establish a presence. We’re always looking for new opportunities.”

In the meantime, the academy’s business strategy is three-pronged. He said, “We want to hold onto our established customers by helping them any way we can to survive, we want to go after new customers among the startup airlines and finally to reach out to those customers among the expanding second- and third-tier airlines.”
Actually, said Cutrone, it’s a relatively simple strategy–“follow the airplanes.”