BUSINESS PROFILE
By Jodi Prill, Associate Editor
Two if by seaplane
Kenmore Air serves Pacific
Northwest via two locations
KENMORE, WA - This northern suburb of Seattle is home to seaplane operator Kenmore Air. Established more than 50 years ago by three friends, the company has two seabases which serve the region with scheduled air service and charter flights for business and pleasure. Despite economic, regulatory, and local challenges, Todd Banks, general manager, and Tim Brooks, VP of flight operations, are optimistic. "There's always been a demand for our kind of service," Brooks says.
In 1946 Banks's grandfather,
Robert Munro, teamed up with two friends and purchased five acres of land
on Lake Washington and established Kenmore Air. Not long after, one of
the partners passed away and the other sold his share to Munro, making
him the sole owner. Banks says the business built itself over the years
as Munro, who had a background in aircraft maintenance, was driven to
meet customer demands.
The company is still very much a family business, Banks says. His uncle
is president and one of the pilots. Kenmore Air employs some 165 people,
including full- and part-time workers.
"My grandpa learned to fly right here," Banks says. "He
crashed his first solo upside down in the lake."
BUILDING A BUSINESS
In the 1950s, Kenmore Air's charter business began to expand and additional
revenue was garnered through contracts with the Department of Defense.
Through the years Munro has landed on glaciers in Alaska and on top of
Mount Olympus, delivering supplies to scientists. In the 1970s the company
transported unarmed torpedoes strapped to the floats of the plane to a
test facility in Canada.
Services were expanded
over the years to include maintenance, avionics, upholstery, engine overhaul,
sales, and rebuilding seaplanes. Kenmore Air has rebuilt more than 125
Haviland Beavers (production was ceased in 1967) and developed several
STCs designed to improve the performance of the plane. Banks says that
in the 1990s the Beaver "became the rich man's toy." Kenmore
sold one to actor Harrison Ford, musician Kenny G, and department store
Nordstrom's.
Kenmore Air is a certified Cessna dealer and authorized service station,
and sells some 350,000 gallons of fuel annually.
In 1992 the company purchased a local competitor on Lake Union - located
in downtown Seattle. The acquisition allows Kenmore to offer customers
additional options with more available aircraft and two convenient locations.
The Lake Union location is 12,000 square feet and includes a terminal
building and a dock for the aircraft.
Five years ago Kenmore Air purchased the EDO float company, which Banks
says again adds to the diversity of the company. Banks estimates EDO has
some 75 percent of the market share in terms of float manufacturing and
it fits well within Kenmore's parts department. "We were already
an EDO dealer and we already had the product knowledge. It just made sense
to get involved in it."
A paint shop was part of the fold at one time as well, but was closed
two years ago due to environmental pressures, Banks explains.
The seaplane base operates year-round, while many others close down in
the winter months, according to Banks. In an average summer, Banks says
the company flies some ten charters per day. Charters and scheduled flights
combined, the carrier can see 600 passengers in one day. Roughly 25 percent
of customers depart from the Lake Washington base.
Kenmore Air currently has 21 aircraft: two Super Cubs; two Cessna 180s;
eight piston Beavers; two turbine Beavers; six Otters; and one Caravan.
Kenmore Air operates scheduled flights daily to the San Juan Islands,
Victoria, British Columbia, and more, along with charter flights. Banks
says air service accounts for about 70 percent of the company's $10 million
annual revenues.
CHALLENGES
Insurance costs have definitely taken a bite out of Kenmore's earnings,
Banks says. From 2002 to 2003 the company's rates doubled to $700,000.
He explains it was partly due to the end of a five-year agreement that
the company had been in with the insurance company, and to the events
of 9/11. "We're doing things differently to adjust to the increase,"
Banks says.
Kenmore is looking at getting into more leaseback agreements, and possibly
aircraft management as ways to keep costs down.
The seasonality of the business has been a strain on the company and is
another reason leaseback agreements look attractive. Brooks says, "We
have an inventory size right now that almost meets our peak demand in
July and August, but is well in excess of what we need in the winter months.
Our goal is to find uses for those aircraft." Kenmore operates scenic
flights in San Francisco in the winter, as well as a couple of aircraft
in the Bahamas.
Like at many airports, noise is a standing issue for the seaplane base.
To combat noise complaints, Kenmore Air has self-imposed operating hours.
Banks says they have also invested a fair amount of money modifying airplanes
to be quieter, as well as training pilots to be sensitive to the issue.
The company has invested funds to retrofit much of its piston fleet to
turbine. Turbine aircraft have less noise impact, says Brooks. "We'll
take several noise complaint calls each week in the busy season,"
he says. "We spend a lot of time working with the community to mitigate
these problems. We go out into the neighborhoods and visit these people
so we can hear what they're hearing and do what's possible within the
existing flight pattern to mitigate the noise."
While Kenmore Air has beefed up its security since 9/11, it is not subject
to TSA regulations, which apparently was news to TSA. "I just got
a letter from the TSA stating that we were subject to all the aviation
infrastructure and passenger security fees," Brooks says.
"I've cleared it up with them, but we're not subject to those fees,
and they didn't realize that." He explains that since the airline
doesn't enplane passengers in a sterile area (facilities are dock-side),
passengers do not have to pay that fee. "Without organizations like
NATA (National Air Transporta-tion Association), these are things that
could easily slip through."
One fee the airline doesn't get away from paying is the passenger excise
fee of 10 percent per ticket. "We pay those taxes like any airline
would, yet our passengers get no benefits," Brooks says. "We
don't receive any federal aid to improve our facility. This is just another
example of how a small airline like ours pays into the system yet receives
very little back from it."
Todd Banks, GM, suggests it's the freedom of landing where one wants and the terrain of the Pacific Northwest that make seaplanes so popular. "They suit the environment," he says. Seaplane trips used to be more for adventure travelers, Banks explains. Today however, they are used by many people for everyday travel to and from local islands. With the convenient downtown location of its Lake Union office, many business travelers' use Kenmore Air services to "skip over traffic.."
- The FAA recommends that bodies of water designated as seaplane bases be at least 2,500 feet long by 200 feet wide with a depth of three feet or more. In addition, a 20:1 glide path to the landing lane is the recommended minimum for obstacle clearance. If the site is to be used for mooring or services, a sandy beach, mooring buoy, floating (obstacle-free) dock or ramp can meet those needs.
- Bodies of water within wilderness areas or other sensitive areas may be deemed unsuitable for seaplane operations.
- Approval of an FAA Notice of Landing Area Proposal (form 7480-1) is required prior to establishment of a seaplane base. In some states, a state-issued seaplane base license is also required. Permission from the agency with jurisdiction over the water's surface is almost always required, and local zoning or regulations may also have an impact on the establishment of seaplane bases.