By Jodi Prill, Associate Editor
$6 million completions center leads growth plan for midwest FBO chain
Moline, IL – On February 17, Elliott Aviation’s FBO based at Quad Cities International Airport began taking planes in a $6 million, 48,000-square foot completions center, located just east of the main building. Alan Nitchman, executive VP and COO, describes the endeavor as tying the circle of service that was started in 1936 by Herb and Arlene Elliott. "We wanted soup to nuts capabilities in one location," Nitchman says.
With the addition of the completions center, Elliott is now able to service nearly every aspect of an aircraft at its Moline FBO, making it a "one stop shop" – something few FBOs in the nation can claim. Nitchman says this is the direction in which the industry is headed, and where Elliott Aviation needs to be for continued growth.
Under One Roof
Construction of the new facility began in March 2002. Integrating many layers of the completions process, including paint, interior, cabinetry, cabin amenities, and avionics modifications, a plane never has to leave the building during the rework process – it is simply moved from station to station.
The temperature and humidity inside the structure are computer controlled to speed the process and minimize downtime of the aircraft, explains Mike Turner, director of marketing. The entire process of outfitting the plane can take approximately two weeks, which Turner says is one of the major benefits of the completions center for aircraft owners.
Equipped with a special air filtration system which Taylor says recirculates some 60 percent of the air, the building not only meets air quality standards, but also saves the company money on temperature regulation.
In addition to the design center, cabinetry and upholstery manufacturing departments, and strip/sand, paint, and detail hangars, 15,000 square feet on a second floor is available for development "once we hit a certain volume," Turner says. Once this happens, the cabinetry department will move upstairs along with additional office space and the upholstery department will be expanded.
"We created something that fulfills a need in the marketplace," Nitchman says.
In the Beginning
According to Mike Turner, director of marketing, Elliott was initially positioned as an aircraft sales company, and has been an authorized Beech dealer since 1947. In the late 1950s, the company expanded adding a base in Des Moines, IA. The next two decades saw the additions of operations at Omaha, NE and Minneapolis, MN. "Those companies were bought with the concept that this was an aircraft sales company. They were expanding their sales territory," Nitchman says.
Continuing the growth, Herb and Arlene’s son Wynn took over as president of Elliott Aviation in 1993, a position he holds today.
Nitchman joined Elliott Aviation in 1995 as the general manager of its operation at Flying Cloud Airport, Eden Prairie, MN. He spent roughly 2-1/2 years there before coming to corporate headquarters here as VP of operations. "That’s when we started finalizing our five-year plan, which encompassed the current facility," Nitchman says. "We started making long-term decisions and it was three or three and a half years before we decided to go forward. We gave consultants a structure, we told them everything we wanted in a facility, and carved out a very specific market niche that we wanted to fill – light to medium jet/turboprop is our market."
AN OEM’S IMPACT
This transition began about the same time that Raytheon Corporation made the decision to market its larger aircraft direct, instead of through dealers like Elliott. "It changed our whole philosophy," Nitchman says of the decision. "Elliott had to make an adjustment and put service in more of a demanding position. We had to grow our business some other way. There was a driving force that said one-stop shop was the way to go."
After reevaluating all four locations, it was determined that Moline would be the best fit for the completions center. "It took a major reorganization of the company in order to support the completions center," Nitchman says. "We now have a CFO; we expanded our HR department to include hiring trainers and recruiters; we will have a VP of sales and marketing which will eventually take over responsibility for all sales. It’s a change in our business model. To me, you have to get the right people in the right positions and give them the resources to carry out transitions."
TAX ABATEMENT; SCHOOL-TO-WORK
At Quad Cities International Airport, Elliott Aviation occupies some ten acres under a long-term lease, which was renegotiated last year when construction began. The $6 million project was funded entirely by Elliott Aviation, with assistance through a local tax abatement. "We were able to show [community officials] that the investment we were making in this facility was going to have an impact on employment, potential employment, and educational aspects of this community," Nitchman says.
"We have met with the Moline school district and we have put together multiple programs for school-to-work programs. It’s been well received. The tax abatement program is truly a partnership."
The Moline FBO is the largest of the Elliott operations, employing some 160 of the 400 Elliott employees. One possible change Nitchman sees in the future is one person overseeing each major business segment at all four locations. "We think there are some kinds of skills where we’d have, instead of four people doing the task, we’d have one person."
Nitchman describes going from a "Mom and Pop" operation to one with estimated revenues of $100 million as a "huge transition."
"You’re going from a family-owned, family-operated company that functioned extremely well and created a fantastic reputation in the community. The value system that was put in place by Herb and Arlene that is now continued through Wynn, those core things, honesty, integrity, work ethic, sense of ownership, and responsibility, all those things that they created this company with have been really [carried on] to the present company.
"So that foundational structure, that is so critical for success, that they could do as a team, which you can no longer do today as a team of two people is really the foundation that builds us and moves us forward. Because the big difference is when you start out with one or two airplanes and one or two people, yes, one guy or one gal can handle all that. But as you go to a $100 million a year company, you can’t. You have to sell the empowerment concept and the ownership concept to the people responsible for those tasks. That’s really the transition."
Unlike many FBOs, Elliott does not generate the bulk of its revenue through fuel sales. "Our drivers are avionics, paint, service, and interior. The completions center tied our circle and we’re a one-stop shop. If you’re going to be a major player, one-stop is the way to go," Nitchman says.
Last year alone, Elliott developed 15 STCs which it hopes to market and sell to bring aircraft from across the U.S. to Moline. The FBO is also in the process of becoming ISO 9000-certified, which would satisfy two goals for Elliott, according to Nitchman: "Predictability of repeatable products, and garnering international work. Everything is a building block for where we want to be."
ELLIOTT AND SECURITY
Nitchman says each Elliott base has a security plan based around the plans of the airport. Turner adds "everything we did security-wise here in Moline was voluntary. We posted a security statement on the entrance doors and every employee has a photo ID badge." At the Omaha and Des Moines bases, photo IDs were issued by the respective airport authorities.
Turner adds that all baggage through the charter department is matched with passengers and no one is allowed access to the ramp without prior clearance.
"We’d like to think that we’ve complied in advance with the TSA (Transportation Security Administra-tion) requirements," Nitchman says. "We stay close with the TSA representative here. If there are some adjustments, we’ll make them."
LOOKING AHEAD
The next five years will be ambitious ones for the company. Among the possibilities is an expansion for the base at Flying Cloud. Elliott currently leases some six acres and Nitchman says the goal would be to increase that to ten, as well as "create new facilities and enhance maintenance and avionics capabilities. We have been in discussions with MAC [Metropolitan Airports Commission] about that for some years, but we’re at the point now that we’re getting ready to finalize and that will be one of our goals for this year – to finalize our expansion plans.
"In Omaha we have a need where we could use a good corporate hangar. In Des Moines, we eventually are going to have a need for some maintenance expansion. I think Des Moines kind of leans toward the back-end of a five-year plan, Omaha in the middle of a five-year plan, and Flying Cloud at the front of a five-year plan."
"I see general aviation/corporate aviation continuing a strong growth. I realize it’s in a little flat stage right now, but for the long pull, I think I agree with the strategists, that it’s going to continue to go up. And for me, we want to be in that service, avionics, and upgrade business.
"I see the FAA has clearly identified that they want to try to make this aviation business, in total, as safe as possible. And where I see corporate/general aviation going, is where the mandates are already taking us. They are going to make these airplanes so they are equipped with the proper electronic devices so they have proper separation and awareness. I see the piloting of these aircraft becoming even more professional; it’s already professional. I see the training products and everything becoming more stringent. I see manufacturers becoming more involved in ensuring that people who are flying their airplanes are better equipped to fly them. Because with the current trend in insurance, that’s what they have to do. They are going to have to do something and we, on the service side, are going to have to ensure that we’re keeping these airplanes safe."
