Adapting to the Downturn

FBOS adjust as sales fall, security regs are proposed, and corporates hit by 'perception'

Regarding employment, Epps says now is not the time to hire pilots, though he would continue to hire technicians. “If necessary, of course we would be prepared to cut back on hours; but we don’t anticipate having to do that at the moment,” explains Epps. He also says the business has no plans to build or expand, but even if space allowed expansion for Epps, he would delay any new construction for at least six months.

Wraga stresses the importance of sticking with direct marketing, tracking customers who want to go within 25 miles of an FBO’s location. Developing loyalty with the customer base by offering good service and attractive rewards programs may help insolate the business somewhat, says Wraga. “Member customers are under the same pressures we are; our businesses must reach out and talk to everybody while also focusing on adapting to new business conditions.”

Damage control
Showalter’s biggest concern for the industry is the suddenly perceived political incorrectness of corporate aviation. With flight departments shutting down and CEO’s hiding their planes behind hangar doors, it’s no surprise that “these are very difficult times,” says Showalter. “It’s very difficult to be subjected to the pandering and incessant negative sound bytes of the mainstream media.”

“There is plenty of value in what we do, and we need to trumpet that,” explains Showalter. “Most people don’t realize that companies that operate airplanes make a better return on investment. It’s productivity, it’s flexibility; it allows large companies to operate in small towns while maintaining a management function that works well.”

Wraga and IFBOA agree: “The attitude towards corporate flight departments is changing this business the most; the automakers took ridicule and punishment without justifying their use of private aircraft when they should have defended a great productivity tool.”

Now, even corporate stockholders are saying their customers are questioning the use of corporate aircraft, and flight departments are receiving more scrutiny than ever seen before, relates Wraga.

Adds Showalter, “We have all been a bit stunned by the changing business conditions seen in the last couple months; but we have to get going and turn it around. The speed at which we became politically unacceptable is really astounding. Our biggest challenge is to improve our industry’s public image. That will improve two things: business levels and security regulations.”

Controversial regulations
TSA’s proposed Large Aircraft Security Program (LASP) is receiving increased opposition from the general aviation (GA) community, which is apprehensive about the suggested effectiveness of the program.

The rule would require operators of aircraft above 12,500-pound maximum takeoff weight to ensure that flight crews have undergone criminal history checks and that passengers have been matched against the terrorist watch list.

Showalter, a member of NBAA’s security council, says the group has been working with TSA for two years, yet “TSA has proven they are not listening to us. The whole idea that a private plane and a private company is as open to a terrorist attack as an airline passenger jet is nonsensical.”

“If you want to fly a 100,000 pound-plus converted airliner, which could actually do some major damage, maybe you should have a U.S. Marshall on board; but to say that about a CJ3 or a King Air 350 just doesn’t make sense.”

Epps agrees, stating that “the [proposal] is completely off-base and TSA has no concept of our business. This is a great privacy imposition; TSA is doing nothing but creating unnecessary bureaucracy which will accomplish nothing on a security measure.”

Epps believes the program needs to be completely done away with, and that the biggest threat to general aviation is regulatory.

We Recommend