The Benefits of Diversifying

GREEN BAY, WI — In 1970 Jet Air became the first Mitsubishi service center for the then new MU-2 aircraft; and ten years later, the company moved to its current location at Green Bay’s Austin Straubel International Airport (GRB). In 1983, Jet Air purchased a fixed base operation, but sold it to investors in 1997. Recently, the company’s current owners have
reestablished the FBO under the umbrella brand Jet Air Group. Now, Jet Air Group looks to expand by consolidating the company into a more efficient facility for its customers.

Four airlines currently serve Green Bay’s O&D market: Delta, United, American, and Midwest. Tom Miller, airport director for nearly nine years, relates that passenger service will soon be enhanced by two more carriers, Frontier and Continental.

Frontier will add nonstop service to and from its Denver hub beginning in April; and the restoration of service by Continental (the carrier exited the market last fall) will reestablish the link between GRB and Cleveland, beginning in May.

According to Miller, GRB had annual enplanements of 423,504 in 2008 and 360,471 in 2009. However, the airport’s November ‘09 traffic was up 17.2 percent; and last enplanements were up 6.4 percent.

The market share leader here is Delta, serving both the Detroit and Minneapolis hubs five times per day. Apart from commercial aviation, the GA presence here is growing, from the standpoint of corporate travel, says Miller.

“While the recreation segment remains fairly flat [the airport has 130 based aircraft, and plots laid out for recreational pilots who would like to build], corporate travel is going through the roof,” remarks Miller.

“Titletown [soon to be renamed Jet Air Services] is adding on and building a good-sized hangar next to their Jet Air facility; they seem to be doing very well.

“Both our FBOs have worked aggressively to increase their business, both in the maintenance area, as well as in aircraft charters, which appear to have increased significantly in recent years.”

From titletown to jet air services
Alan Timmerman, chief operating officer for the Jet Air Group, has been at his position for two and a half years. He decided to retire after a career in law enforcement but was offered the Jet Air job by the previous owner, who agreed Timmerman could gain part ownership if he agreed to operate the facilities. “He let me buy in and that’s where we are today,” says Timmerman.

A life-long aviator himself, he describes his business as a diversified FBO. Jet Air Group is now one entity with several service divisions, says Timmerman.

The service divisions consist of the Jet Air maintenance facility — the oldest MU-2/Mitsubishi service center in the country; a full-service avionics division (a dealer for Garmin, Honeywell, S-TEC, and more); a calibration lab which also services tools for large construction companies; the Titletown Jet Centre FBO; an international trash sterilizer, which the company utilizes to service the ports along Lake Michigan; the Frontline Aviation flight school; aircraft sales; and a charter business.

Titletown Jet Centre, whose name will change to Jet Air Services once the move to the new facility is complete, offers complete line services, hangar storage, and pilot amenities. The FBO also services passenger aircraft operated by ExpressJet, the regional carrier that handles United Airlines’ GRB routes. Titletown had Continental’s business before the carrier dropped the service; Timmerman plans on going after that contract again, and will be pursuing the Frontier contract as well.

Timmerman says fueling was the hardest hit profit center during the downturn. The FBO saw fuel sales come back a bit last fall, but for the last couple months those sales have been down again — some 15 percent, says Timmerman. In 2009, Titletown pumped just shy of one million gallons total, the bulk of which was into-plane for airline and charter aircraft.

With regard to marketing the FBO, Timmerman comments, “We attended NBAA’s Schedulers & Dispatchers Conference in January and we do a lot of marketing through Air BP.

Jet Air Group’s biggest income source is “by far the maintenance,” says Timmerman. “It’s always been that way; we’re a Cirrus and Mitsubishi service center, and we are also a Part 145 repair station.”

“The flight training and air ambulance businesses have also had some deal of success, helping our business weather the struggling economic environment.”

Jet Air Group’s Frontline Aviation operates the company’s flight training center as well as a full-service air charter service.

Building Progress
“We are going from 900 square feet of lobby space to 5,000 square feet with the new FBO,” relates Timmerman.

Facility features will include a waiting area with a fireplace, pilot day rooms and lounges, a conference room, and computer workstations. Services include contract fuel programs, rental car delivery, airframe and engine maintenance, avionics, and more. The new facility is expected to open for business around August 1.

Jet Air Group is also building a new ‘green’ hangar adjacent to the new FBO; one of the first green hangars in Wisconsin, says Timmerman.

The company currently has 16,000 square feet of hangar space, but is expanding to 24,000 square feet — a third more space. The new hangar features heated floors and a 28-foot by 100-foot door to accommodate larger business jets.

Jet Air Group invested some $3 million total in the development. The new hangar will include two Big Ass Fan installations. “Big Ass Fans have guaranteed us that with the system we are putting in, we will stay within one degree temperature-wise between the ceiling and floor,” says Timmerman.

Focus on Energy, a Wisconsin utility-based grant process, was a partner in the development plans, relates Timmerman. “They came in and made 20 recommendations, and we are complying with some 90 percent of them,” says Timmerman. “They recommended the in-floor heat; that cost a substantial amount of money compared with the air-handling system, but our return on that investment will occur within three to four years.”

Mead & Hunt, a Madison, WI-based airport design firm, is planning the new ramp space. “The airport agreed to put in hundreds of thousands of feet of ramp space for the new FBO,” remarks Timmerman. “We have 200,000 square feet now; we are hoping for some 500,000 square feet to accommodate the new facility.”

Regarding financing, Timmerman comments, “That part wasn’t bad; we had a couple financial institutions that competed for the business, and interest rates were very competitive. It was just the right time to do this.

“The construction bids were very competitive as well. Bayland, a local contractor we chose, told us they are making about 1 percent on the project; they just want to keep their guys working for the winter.”

With regard to the cost of raw materials, Timmerman says he signed a contract early [some 60 days] so he could lock in lower steel prices, which worked out well, he relates.

With a lease on the property to the east of the current facility, long-term goals for Jet Air Group include a new maintenance facility. Timmerman says he would like a more energy-efficient facility.

“We are very fortunate here; we are so diversified in what we do,” says Timmerman. “When one part is down we usually see another part go up. That’s why we are diversified; it certainly helps in a down economy.”