Surviving in the Aftermath

Surviving in the aftermath

A canvass of aviation businesses on the current, future state of activity

By Lindsay M. Hitch, Assistant Editor

November/December 2001

The economic impact the weeks following September 11 on airport-based businesses is best described as a mixed bag. Some charter operators report increased interest and opportunities, while FBOs relying heavily on fuel sales have been hit hard. Maintenance shops have been busy due to backlog, but aren’t sure how much longer that will be the case. All are hoping for a more stable economy and renewed interest in general and business aviation, but recognize that it will not be a quick recovery.

"FBO businesses throughout North America are quite fragile in the best of times," says Harry Holt, president of Columbia Air Services in Groton, CT. "They require all the elements of the FBO working in harmony, and they rely on the synergy of the departments to make the company profitable."

BUSINESS TODAY
For Leonard Concepcion, owner of SkyLink Charter LLC in Hawthorne, CA, the grounding and changing flight rules have completely altered the focus of the business.
"We were very heavily involved in Grand Canyon tours," says Concepcion. "It went from 100 percent of what we were doing to 5 percent. That whole business structure went upside down, so we’re now focusing just on on-demand charter for the bulk of our business."
To aid the company’s cash flow without jeopardizing employees, Concepcion is in the process of selling one of the airplanes in his fleet.
FATA survey results
The Florida Aviation Trades Association (FATA) conducted an economic impact survey of its membership. Here, a summary of the 250 responses received.
• 89 percent of Florida aviation companies have suffered "significant" to "devastating" impact.
• 80 percent of Florida aviation companies will lay off some employees.
• Jobs lost in the first 30 days could reach as high as 30,908.
• Approximately 727 companies (49 percent of Florida’s aviation industry) may reduce employee pay as much as 26 percent.
• Lost revenue anticipated to be as high as 52 percent in the 30 days since September 11, equal to nearly $735 million in one month.
• 23 percent of Florida aviation businesses (340 companies) may close or seek bankruptcy.
*Survey conducted by Enterprise Florida. Complete results available at www.fata.net.

For Elliott Aviation in Moline, IL, the effect has been mixed, says Al Nitchman, vice president. "We have seen areas where it has had a positive effect — charter, aircraft management opportunities. But there’s definitely been a slowdown.
"A lot of that is fuel driven. There definitely has been a slowdown in line services, airline opportunities, the airline fueling we do. And our shops have slowed down," says Nitchman.
Like other FBO chains, Signature Flight Support had some bases heavily affected by "no-fly zone" restrictions, while others just outside those areas benefitted from increased traffic.
"We found ourselves with quite a few locations that were closed entirely to Part 91 or entirely to everything for the better part of a month. It has had a big impact," says Steve Lee, vice president for marketing and business development.
"Having said that, we also saw an increase in activity in places like Morristown (NJ), White Plains (NY), that were picking up slack in the New York area. We saw an increase in activity in Baltimore when Dulles and DCA were closed. And now that Dulles is back open we’ve seen quite a bit of activity there picking up slack for DCA," says Lee.
Duncan Aviation in Lincoln, NE, which focuses primarily on aircraft maintenance, has seen little effect thus far, says Lori Johnson, marketing communications coordinator. "We had a few days where we had trouble getting parts... But really, September did not turn out to be a bad month."
Johnson notes that fuel sales and line services were down, while charter was operating at nearly normal levels.
Receiving Instructions
The grounding of U.S. aviation on September 11 was a foreign idea to all involved. Of note is how aviation businesses knew what to do.
"We heard it on the news first," says Leonard Concepcion, owner of SkyLink Charter LLC of Hawthorne, CA. "So I just called the control tower at the airport and they told me that everything was being shut down.
"Nobody contacted us from the airport at all; that was really generated on my side. An operator, especially a heavy operator, on an airport should be notified. What if we didn’t turn on the news?"
For Al Nitchman of Elliott Aviation in Moline, IL, information came from the flight department and industry association websites. "The information that we got from NATA and NBAA has really helped us, in checking our checklist, making sure that we had covered all the bases… And I think it was very helpful to be actually giving that information to the people who have a need to know the information."