NBAA Convention News

Despite slowing traffic, Atlantic grows for future

 - October 1, 2008, 7:17 AM

“For all intents and purposes there is an economic downturn,” said Lou Pepper, CEO of the FBO chain that is owned by Australia’s Macquarie Infrastructure. But, he added, “Atlantic is still bullish about the future.” In August 2004, Atlantic Aviation (Booth No. 1610) had just 10 FBOs when Macquarie Infrastructure bought the chain. Now with 64 Atlantic-branded FBOs and three nonbranded facilities in Alaska, Atlantic continues to invest capital in upgrading facilities and purchasing new ground service equipment.

A unique characteristic of Atlantic is that it is strictly a U.S. chain, with no FBOs located outside the U.S. “There are always opportunities,” Pepper said, “but we haven’t found anything strategic. It doesn’t mean we wouldn’t consider something in the future.”

Pepper is convinced that a large chain offers advantages for customers. “They know exactly what to expect,” he said, including consistent catering, rental car availability and, he added, “the highest-trained line service personnel in the industry.” Atlantic Aviation can afford to buy top insurance coverage and the chain has also developed a reputation of sparing no expense on ground-handling equipment. “That all tends to add value to a customer’s visit,” he said. Buying new equipment for line and customer service personnel also does wonders for employee morale, he explained.
“Our guys have beautiful new equipment, and that does more for morale than anything else you can do.”

With 64 Atlantic FBOs, making sure everyone is working toward the same goals and delivering consistent service is a constant challenge, Pepper said. Regional directors run six distinct regions in the U.S., and subregional managers oversee three or four FBOs each. “No FBO general manager is ever more than three people removed from corporate,” Pepper said. “That is extremely effective. It really helps in instilling the corporate culture and passing it down.” Another program that helps spread the culture is the Atlantic Attitude Training Program offering classes on customer service and how to run an Atlantic FBO.

Each regional office has a safety manager, and most FBOs have an on-site safety coordinator. Employee bonuses are based on one factor, Pepper said: “Safety. Every person is tied to safety, and our customers appreciate that. Nothing reduces the value of a customer’s visit more than hangar rash or a dinged airplane. Every employee gets a bonus based on safety. That’s the best way to run an FBO.”

Atlantic invested more than $12 million at its Los Angeles International Airport facility and finished a new ramp there in January. “The LAX facility is doing extremely well,” Pepper said. “It’s really a showplace.”

At Teterboro, N.J., Atlantic’s $8 million, 12-acre ramp was completed on June 1, making parking problems at the busy airport a nonissue. “It looks like the Atlantic Ocean,” Pepper said. “I know it’s hard to get excited about a ramp, but at Teterboro a big ramp like that is really something special.” Despite the challenges facing the economy, especially financial institutions in New York City, business at Teterboro remains relatively strong, he said. “It’s the Mecca of general aviation.”

On the West Coast, Atlantic is finishing a $16 million-plus hangar and office complex at Norman Mineta San Jose International Airport. Last year, Atlantic purchased ACM Aviation’s San Jose Jet Center FBO complex and is now the sole FBO at the airport. “That’s one of those unique airports,” Pepper said. “It’s been a bright spot for us in the chain.”

Its FBO at Santa Monica Airport remains busy, despite an attempt to ban heavier jets. “We’re in so many other locations in Southern California, if they do curtail business there, then we’ll have an alternate to offer to our clients,” Pepper said.

Atlantic will continue growing when the right opportunity comes along, Pepper said.
“When opportunities arise that we think are strategic for our chain, we’re ready willing and able and we have the capacity and capital to grow.” But even if Atlantic never adds another FBO, he said, “We’re at a great size and we feel like we have a lot of internal growth capability.”