On January 1, 2009, the Odyssey Aviation brand was put on Ken Allison’s seven fixed base operations, following a history of being part of the Million Air franchise chain. For Allison, it was the culmination of a long-held desire to go it alone with partner Steven Kelly. “I can honestly say that we’ve wanted to have our own group for the longest time,” relates Allison. “We couldn’t have picked a worse time to launch it with the downturn, but it still went very well.” So well, in fact, that the partners are planning to grow Odyssey Aviation into a chain of moderate or modest FBOs, ones focused on diversity and customer service. On the U.S. mainland, that growth will likely come through acquisition.
Of the Million Air experience Allison says, “I liked my time with them; they were great people. We just had different business philosophies. It’s a good direction for both of us.
“When you’re seven in a group of 30, it’s not a good fit for them or us. “
Odyssey Aviation is a limited liability corporation (LLC) co-owned by Allison and Kelly. “We are both former franchise owners together,” explains Allison. “Stephen Kelly and I had known each other for a long time, about ten years. We really shared the same philosophies of how the business should be run, and we’re in it for the love of aviation.
“We always really wanted to go in our own direction, having our own group. With seven FBOs for me and one for him — and he’s now adding three more in the islands — we’ve gotten it to where you can run an operation and have a smaller franchise where the owner is very close to the companies, yet you’ve got the size [for efficiencies].
“Moreso, we were looking to be able to change things on a dime. When the industry changes, as it does, giving the customers exactly what they want poses quite an effort. And when you are in a bigger group, sometimes when you come up with good ideas the smaller FBOs can’t afford it, and shouldn’t do it.
“In our group, we look for all of the FBOs to be very similar size-wise and flowage-wise. So if we decide we want to do something for the customers, each has the wherewithal to do it and not hurt their bottom line.”
Eleven and counting
Allison directs the U.S.-based operations from the FBO at Cincinnati’s Lunken Field. The six other locations:
- Asheville, NC;
- Charleston, SC;
- Chicago Midway;
- Columbus, OH;
- Lafayette, LA; and
- New Orleans Lakefront.
Kelly directs the Bahamas location and recently announced the addition of three satellite locations in the islands: Treasure Cay, Abaco (MYAT); Governor’s Harbour, Eleuthera (MYEM); and Exuma International, Great Exuma (MYEF).
Comments Allison, “The Bahamas is a different culture than in the United States, yet they have brought the same culture to the FBO business there that we have here in the States, which has helped them out a lot.
“We’re excited about our relationship. We’re a close group, like a family. They bring a different balance.”
Allison paints himself as the eternal optimist. About the economic times of the past 12-18 months he says, “Business has been down, along with everybody else. We saw it coming; I’ve been through a few of these downturns in my 23 years of doing this. We’ve probably not seen one this extreme; I think we handled it very well.
“We knew what we had to do and got ahead of it. As a matter of fact, the third quarter of last year was when we recognized that it was coming. This August and September it has turned around.
“When you look at year over year, 2007 was the best year I’ve seen in 15 years. It was really a banner year. To say we’re going to get back to 2007 is a stretch. I see us getting back to 2005 or 2006 levels, which were very good years — relatively quickly. People still have their airplanes; a few dropped off, but very few. The transient business is down a bit but it’s not horrendous.”
Of the U.S. Odyssey locations, Allison says Chicago Midway was hardest hit, due to its heavy reliance on transients. The other six, he says, “stayed fairly decent” through the harshest downturn the industry has experienced since fall of a year ago.
Then there’s New Orleans Lakefront, where Hurricane Katrina wiped out everything in 2005. Relates Allison, “Of course, New Orleans is always a story in itself. We’re months away from finishing our rebuilding from Katrina; that was a long, hard road. The end result is incredible.”
The largest holdup at Lakefront to reconstruction was a complex permitting process, says Allison.
“We actually moved our location; we were five feet from the water. We’re on the other side of the airport now, in a better location that doesn’t flood as much.
“FAA had to get involved, and FAA was great. Every time we came up with a plan, they looked at it right away, and usually that’s a long process. But you’re working with the state, and you’re working with the City of New Orleans. The airport was very good; they tried to help push it along.”
The end result is a $4.5 million investment and an extended lease by ten years, putting it at 20.
Watching the numbers
Allison relates that much of his FBO business philosophy was learned from Dit Panfile, well-known in the FBO arena as the founder of Aero Services, a major chain of its era. Panfile later established the Million Air franchise at Midway, which is where he and Allison hooked up.
Explains Allison, “For me, growing up under Dit Panfile, who had quite a chain at one time, we learned a lot from him.
“You know, Dit has a Ph.D in statistics, so by default I have one because I had to listen to him all the time. We plot things out; watch things; understand. If you look at the ten-year cycles of corporate aviation, we’re on the eleventh year. Was it a natural cycle of the industry? It was influenced by outside factors, but it does follow the trend.
“You can see the signs. There are a lot of airplanes for sale; the price is cheaper now. Figuring out how to finance them will be the key.”
While partner Kelly is busy planting FBO seeds in the islands, Allison will focus on growth in the U.S. through acquisition. And, he agrees, it’s an interesting time to be a buyer.
“I think the days of ten and 12 multiples are gone — well gone. I think it’s coming back to reality. The easy money is gone now, where people had access to capital and just wanted some return on it. Banks have tightened up, so the deals have changed drastically.
“We are looking at some currently; more strategic, and they have to be a good deal. That’s been the way we’ve done it all along. We’ve gone into places where we know we can make a difference. We’ve gone in at lower multiples. We’ve walked away from a good number of great cities that were just big multiples.
“I look for, especially after this recession, diversity in business. That’s an important factor – if you’ve got cargo, airlines, general aviation. And, we don’t forget our 100 low-lead customers.”