MAKING A CHAIN
Florida firm continues growth via acquisition with ASI Orlando FBO
by John F. Infanger
STUART, FL - In January, officials who own the mini-chain of fixed
base operations, Boca Aviation and Galaxy Aviation, announced the acquisition
of the Aircraft Service International FBO at Orlando International Airport.
The move is the next step in what they say is development of a small chain
of "strategic fit" companies that eventually will have them
looking outside the state of Florida, to the Northeast.
Explains chief operating
officer Mark Wantshouse, who is based at Boca Raton, "We're headed
in a growth acquisition direction, but we tend to look for a certain profile.
"Our four FBO profiles are the high rent, corporate-type of market,
and they're very strong locations. We've passed on other locations that
just did not meet the profile.
"We are definitely looking for a fifth, sixth, and more FBOs, and
our goal is to grow into a significant operation. Geographically, we're
not limiting ourselves to the state of Florida, it just happens that that's
where our concentration has been and where the operations have been available."
Wantshouse says that, because of its primary customer base, he sees the
company as a north-south corridor chain, and a natural expansion target
is the Northeast U.S.
The COO has been involved in the recent acquisitions and says the downturn
in the economy is beginning to have an effect on the FBO acquisition market,
which in the latter 1990s was not only vibrant but also saw many outside
investors enter the game. "We're now starting to see it turn more
toward a buyer's market; it's not there yet, but it has gone that direction
in the past nine months," explains Wantshouse.
"Prior to that, it was definitely a seller's market, and there were
a lot of people looking to expand, a lot of dollars being put out there
and high prices being paid for FBOs. We see the changing market as something
that will help us on our fifth acquisition."
OWNERSHIP
From the outside,
having two different names for FBOs seems odd, if not confusing. This
is particularly so for a company which prides itself on its marketing
capabilities. However, it has to do with ownership.
Primary investor Martin Green-berg is a tax attorney, certified public
accountant, and holder of properties across the U.S. He entered the FBO
arena 22 years ago with the acquisition of Boca Aviation, transforming
an "underdeveloped" FBO into a modern complex on a state-owned
airport. The minority owner at Boca is Miami Beach attorney Paul Steinberg
who, unlike Greenberg, had no interest in further FBO acquisitions.
Wantshouse, meanwhile, started at Boca Aviation in 1984 as a line technician
during high school, and by 1987 had been promoted to president to run
the operation. He is also a minority owner in Galaxy Aviation.
FOUR LOCATIONS
The purchase of the ASI Orlando FBO puts Galaxy Aviation on its second
air carrier service airport. It purchased the FBO from Signature Flight
Support, with which it will compete for both general aviation and airline
servicing business.
Its other commercial service location is at West Palm Beach, where it
competes with Signature and Jet Aviation and already has air carrier contracts.
It acquired that facility from Signature as well, and has been housed
in the former Butler Aviation-Signature FBO. However, it was expected
to move into a new terminal in February. Signature is now located in the
former International Aviation-Bizjet FBO.
Explains Wantshouse, "Both Signature purchases were the results of
mandates from the Department of Justice for Signature to divest"
as a result of the super-chain's acquisitions of other facilities. "Our
Palm Beach acquisition took a lot of time but went very smoothly; the
Orlando acquisition has gone well."
The other fixed base operation is at Stuart, some 40 miles north of West
Palm Beach and where interviews for this article were conducted. It competes
with the Stuart Jet Center at the general aviation airport, and began
operations out of a trailer after the acquisition of a small FBO in 1995.
"At Stuart," says Wantshouse, "it pumped 1,800 gallons
of fuel a year when we purchased it. Presently, we are at just over 40
percent of the market share - about a million gallons."
David Smith, who started
at the Boca location as the company's chief financial officer, relocated
to Stuart in 1998 to become its president/GM. He attributes much of the
growth at Stuart to marketing to the upscale community that surrounds
the airport, including nearby Jupiter Island, and to infrastructure investments
in the airport that have included a new control tower, runway, and roadway.
Says Smith, "One of the things we've worked on, instead of trying
to take all the business away from the competitor, is to bring new business
to the airport. It was a matter of educating people that there is a choice,
and that there's less traffic and it's an easier drive to the Stuart airport."
The company also offers broker services for charter under the Stargate
Charter Services banner, which has one dedicated full-time person operating
out of Boca. And, it offers maintenance through Boca Aviation Maintenance,
a division of Boca Aviation. According to Wantshouse, total annual for
all related companies is just over $30 million.
COMMUNITY RELATIONS
A common denominator of the Stuart, Boca, and West Palm Beach locations
is that each is an upscale community, made up of a strong user base but
also with citizens interested in controlling growth.
At Stuart, says Smith, anti-noise initiatives have been calmed by bringing
activist groups, both for and against airport growth, around the same
table on a regular basis. "This has always been a slow-growth county
for development of any kind," says Smith. "It goes back to the
geography of the area, with a lot of waterways and a concern for the environment."
At Boca, the 212-acre airport sits smack in the middle of the community,
and anti-noise groups follow closely actions taken at the Naples, FL,
airport.
Explains Wantshouse, "The last Part 150 study submitted to FAA came
back with quite a few no's, in terms of curfews, restrictions, flight
patterns. The airport authority now has to respond back to FAA, which
is currently in process."
