Solairus Aviation Thrives in a Challenging Charter Market
Charter/management firm Solairus Aviation is headquartered in the heart of downtown Petaluma, Calif., and not at an airport because employees prefer local amenities such as restaurants and shops to the relative remoteness of most airport general aviation facilities. Pilots who are visiting headquarters for training especially enjoy what downtown Petaluma has to offer, according to Solairus founder Dan Drohan.
Solairus Aviation is growing, despite significant challenges for charter/management companies, and recently the company added three more people to its East Coast charter sales team and doubled the size of its Petaluma offices. The move into the larger space is designed to accommodate recent and projected growth, according to Drohan. The Solairus fleet currently stands at 55 jets, of which about 25 are on the Solairus charter certificate and the remainder managed and flown under Part 91. Most aircraft are based on the U.S. West and East Coasts, and flight and maintenance crewmembers are based at each aircraft’s location.
Price Is King
The Great Recession and the significant drop in prices for used jets have prompted many aircraft owners to offer their jets for charter. The pendulum has shifted, Drohan explained, from customers focused on traditional parameters such as the available fleet, aircraft age and quality of the safety infrastructure to pricing. “Today, price determines everything,” he said. “I think that trend will reverse at some point and the industry will return to a focus on quality over quantity.”
A problem facing all charter operators is that some companies are trying, as Drohan put it, “to commoditize private aviation, in an effort to disrupt the marketplace and gain market share.” While he welcomes new ways to market private aviation and make it more accessible, he worries that some efforts are devaluing a product that isn’t meant to be cheap. “I think it’s important to recognize that flying privately is not supposed to be attainable by the masses,” he explained. “At the end of the day, someone has to pay the bill to fly the [aircraft]. Cheaper doesn’t mean better when it comes to aviation, and certainly private aviation wasn’t meant to be cheap. It’s an exclusive, highly personalized, high-end luxury privilege and it should be treated as such.”
What concerns Drohan is that small charter operators are being squeezed hard to lower their prices and costs, and this could have a negative effect on safety. “How do [they] compete in a marketplace where direct operating costs are the prevailing retail rate?” he asked.
To ensure a high level of safety, said Tom Benvenuto, vice president of flight operations, “we’re constantly analyzing and reviewing our systems and procedures.” This is now a normal part of Solairus’s Safety Management System (SMS). “It’s a living organism,” he said, “like a grapevine. You nurture the vine and take care of it and it begins to grow. Before long, it’s entangled in this trellis. That is how an SMS program is; it becomes part of your company, which is ultimately part of your culture, and in our type of environment, it’s a big part of our culture.”
While the company is growing, Drohan said, “Solairus should grow only with great clients and as the direct result of being good at what we do, not just for the sake of adding N-numbers to a list. Our industry has an odd fascination with fleet size, as if it is some sort of determinant to an organization’s success. I think history supports that bigger fleets aren’t always better fleets. Unharnessed, out-of-control growth is the kiss of death in this business.”
“What I want us to be seen as is a private aviation consultant,” said Solairus marketing manager Eric Wildt. “If you’re an owner or interested in charter or maybe none of those options work but you need help speaking to a fractional, whatever you need we want to be able to provide it.”
Like most charter/management companies, Solairus buys lift from other charter operators. According to Drohan, “A significant percentage of our charter business goes onto aircraft managed by other companies.” Charter demand is great enough that more airplanes are needed, he added, “to help us meet the demand we have from our charter client base.” And while fleet growth isn’t the focus, Drohan said, he expects Solairus to experience moderate growth through 2014.