AbuHaidar and Petersen, who are "addicted to flying and aerobatics," according to Hosack, have employed their Naval aviation experience to establish the OK3AIR Air Show Team, which conducts air shows at OK3AIR facilities as well as throughout the U.S. Hosack says the air shows are a great marketing tool for the company. A particularly successful open house held at Ogden airport featured the Air Show Team, Hosack adds. "If you want to have a successful open house, have planes fly upside down."
Additionally, OK3AIR sponsors a monthly pilot seminar series free of charge with subjects ranging from the ins and outs of purchasing an aircraft to winter weather and situational awareness to mountain flying. Hosack says the sessions offer customers the opportunity to better themselves as well as learn more about OK3AIR's offerings.
Looking Toward Growth
Petersen and Hosack say OK3AIR is definitely looking to grow throughout the West, depending on opportunities and economic factors. The business model of the FBO is based on growth of customers and locations.
The company, according to Hosack, is focusing on areas of high home values, large incomes, high traffic, and "areas that lend to customers for life. That's why we do everything," he says. "We want to create customers for life." Hosack says this is the key for growth. "It's 67 times more difficult to gain new customers than it is to keep current customers. So it's paramount for us to keep current customers."
Over the last two to three years, Hosack says the customer base of the three FBOs has increased by some 4 percent.
Ultimately, Petersen says he would like to see OK3AIR become a nationwide chain of FBOs, through acquisitions, start-ups, and even franchising, wherever each makes business sense. "The large players [in the FBO arena] have jumped on large markets and have left some room for consolidation in the middle markets and the full-service operations," says Petersen.
According to Petersen, the company does make a profit but it has not been easy. "The single largest effect on our bottom line is insurance," he says. "It's the number one expense that we have by far." OK3AIR, like much of the industry, has seen a significant increase in insurance premiums since 2001.
Competition is slowly returning to the insurance industry, says Petersen, and he expects that will allow premiums to come down some. One solution he offers to the increasing cost of insurance is allowing smaller companies to establish a buying group. "If you had a buying group, smaller companies will have more power [in controlling prices]," he says.
Petersen expects that because of increased aircraft sales in 2004, thanks to tax relief, 2005 will see a decrease in aircraft maintenance because many of those aircraft will still be under warranty. However, while flight training has been down in recent years because of the economics of the airlines, says Petersen, "this will not continue. Pilots are still going to retire and the airlines still need pilots."
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