NBAA Convention News

TAG confident of continued growth

 - June 18, 2008, 11:35 AM

When TAG Aviation took over Aeroleasing in Switzerland and Aviation Methods in California, and finally Wayfarer Aviation on the East Coast, all in 1998 and 1999, the aim was to set up an operation that would be active in all major markets. Today, this goal is achieved to a large extent, with subsidiaries in France, Germany and the UK, as well as three operating bases in the U.S., in addition to the TAG Group’s traditional strong presence in the Middle East through TAG Aeronautics, a separate subsidiary of the group.

The company’s U.S. headquarters is TAG Aviation USA, Inc. at San Francisco International Airport. In addition to its world headquarters in Geneva, TAG Aviation has two other major European bases at Le Bourget Airport in Paris, and at Tempelhof Airport in Berlin. The company is also building a major operation at Farnborough Airport in the UK.

TAG Aviation currently operates 160 aircraft at more than 50 locations around the world. Of these, 15 are owned by TAG, the others being managed on behalf of their owners. With a total staff of around 800, the company sold 30,000 charter flight hours last year, about half of them to U.S. customers. Owners of managed aircraft have added another 20,000 flight hours to this total. Some of the managed aircraft are flown by customers’ crews.

Continuing to Expand

While the driving force behind TAG Aviation is the Ojjeh brothers, Mansour and Aziz, and their worldwide interests, TAG Holding has attracted other investors as well. After the great leap forward achieved through acquisitions during the last few years, TAG Aviation now needs to consolidate its operations while continuing to grow through expansion of its existing business base. A tactical growth concept used by TAG Aviation is the employment of base managers who take care of the flight operations of one or several customers at a new location with a high degree of independence, but with the remote support of a major base of the company.

While the primary goal is continued growth in the executive charter business, TAG Aviation is also maintaining other activities within its three major acquisitions. For instance, the former Aeroleasing business unit in Geneva remains a maintenance center for Dassault Falcon 900s, 2000s and 50s, as well as Bombardier Challenger 601s and 604s, and practically all types of Learjets. TAG Aviation in Geneva also retains a Piper dealership at the nearby small airfield of Prangins.

Seven Sectors

TAG Aviation divides its activities into seven sectors: executive air charter (available at all locations); aircraft management (all locations); aircraft sales and purchase (all locations); maintenance (available in the U.S. and Switzerland);  dispatching (U.S., Switzerland and the UK); handling/FBO (Switzerland, UK and Germany); fractional ownership (eastern U.S. only).

Since executive charter is the priority, maintenance is often subcontracted, especially in the U.S. Fractional ownership is offered by TAG in the East through the
CitationShares joint venture set up together with Cessna. The program allows individuals and companies to acquire one half, one quarter, one eighth or one sixteenth of a Cessna executive jet, entitling the fractional owner to a specified number of annual flight hours. TAG said it currently plans no fractional ownership program in Europe.

TAG Aviation management strives to amalgamate the reputation of excellence built up by Aeroleasing over the past three decades with the cost-efficiency of its U.S. operations. One way to achieve cost efficiency is by spreading fixed costs over as many flight hours as possible with each aircraft, and TAG excels in this, with an average of more than 1,100 hr flown with its fleet of Falcon 900s and 2000s–well above normal levels.

Cost Efficiency

For owners entrusting management of their aircraft to TAG, cost efficiency is guaranteed by the company’s policy to invoice any outside purchase of goods and services without markup to the customer, including discounts obtained for bulk purchases. TAG’s relationship with owners of managed aircraft is totally transparent, with compensation by a fixed fee only. “Our goal is to have the largest managed fleet in the world, but not to have the largest cost,” said Jim Christiansen, former COO of TAG Aviation USA.

The number of aircraft sold and purchased by TAG Aviation is increasing with its growing fleet. The company recently hired Paul van der Blum to manage and coordinate this department from the company’s Geneva base.

Will the slowing economy impede growth of TAG’s charter fleet? “No,” said Mark Baier, director of sales and marketing in Geneva. “I expect the charter fleet to grow by 10 percent this year in the U.S. and by 12 percent in Europe.”

As if to prove its faith in continued growth, TAG Aviation plans to add more space to its Geneva facility early next year in a building being erected by airport authorities next to its existing facilities. This will allow the company to improve its passenger and crew lounges, and to move offices into the new location to free room in the existing building for additional workshops.