Air Group Thrives on Global Charters

As chief executive of Avery Dennison Corp., Charles Miller wanted to spread the Pasadena company's office products to Asia. But he balked when he thought about the hassle of sitting around in foreign airports wasting time.

He turned to Air Group Inc., a Van Nuys company that manages corporate jets and arranges charters for businesses and wealthy individuals.

Private jets enabled him to fly to Shanghai, Beijing and Tokyo and back within a few days. He could work comfortably and even get in a nap. Miller traveled extensively with Air Group as he helped expand the company's territory in the mid-1980s, starting in Japan and China.

"The plane gave us the opportunity to see new markets and develop them," Miller said.

Miller retired in 2000, after 21 years heading Avery Dennison, but Air Group is still helping companies expand globally. With offices on both coasts, in the Midwest and in Japan, the company has positioned itself to cater to businesses in a globalized world.

The strategy has helped Air Group weather economic head winds and post-Sept. 11 jitters about flying. The approach has helped it grow; it moved into new facilities this year at crowded Van Nuys Airport and New Jersey's Teterboro Airport.

"Our international travel is up more than ever," said Chief Executive Jon Winthrop, who estimated that the number of international flights the company schedules has risen 30% from a year ago. "Especially with us operating planes in Japan, we have the moniker that we're the international guy."

The company, with 160 employees and revenue of about $77 million a year, manages aircraft the way a building manager maintains apartment complexes. It carries movie stars for studios. It transports executives to airports in the most obscure locations. And it enables high-net-worth individuals to jet off on vacations to wherever and with whomever they wish. These trips often take clients overseas.

"As the marketplace becomes increasingly global, businesses need to reach destinations far from their headquarters," said Dan Hubbard, spokesman for the Washington-based National Business Aviation Assn.

The business aviation industry slumped after 9/11 as companies cut costs and worried about the dangers of flying, Hubbard said. But now it's on the rebound, with renewed flying confidence and economic health, he said. After the 2001 terrorist attacks, the number of hours flown annually by noncommercial airplanes dropped below 4.5 million and didn't surpass 5 million until 2004, according to the Federal Aviation Administration.

Executives like using a private plane because they can hold confidential meetings during the flight and don't have to waste time transferring to increasingly smaller aircraft to get to hard-to-reach destinations, Hubbard said. And they avoid the hassle of wading through security required at airports serving commercial airlines.

It takes a special kind of company to have the expertise and equipment to fly overseas, said James Coyne, president of the National Air Transportation Assn. Of the 3,000 general aviation companies -- the industry term for noncommercial and nonmilitary operations -- only about 30 specialize in overseas travel. Air Group is one of the biggest of these, he said.

"It's a totally different world flying into airports in Vietnam and China than it is flying into JFK or LAX," he said. "Just about every element of the flight is totally different," including the language spoken at the airport and the logistics of getting fuel and storing a plane.

But more corporations are demanding these services as they expand into cities and countries that are difficult to reach, he said. In the early stages of establishing a business overseas, many executives feel they need face-to-face meetings with their international partners.

That's part of what appealed to Avery Dennison's Miller, who at 78 is retired and living in Pasadena. He even bought his own plane, which is managed by Air Group. He flies to Jackson Hole, Wyo., but when he's not using it, Air Group charters it to celebrities and rock bands.

Miller admits that owning a plane is a luxury few can afford. Air Group charges about $1,500 an hour for a small jet, and a cabin-class airplane seating more than eight people can cost as much as $7,000 an hour.

But it was worth it for his business because of all the time he saved, Miller said, and because of the feeling of safety that came with flying privately. This sentiment is not surprising -- part of Winthrop's job is making people feel safe with flying and with the business of corporate aviation, a particular concern for many clients in light of a recent crash near Van Nuys Airport that killed two pilots.

Winthrop accommodates his clients in the smallest of ways: making sure they have whatever food they want, from quality steaks to fresh fish, providing air mattresses on some planes so passengers can sleep comfortably, and even building an outdoor smoking lounge at the Van Nuys facility.

In the CEO's office in a hangar at Van Nuys, small model planes sit on the coffee tables and desks. Photographs of the Navy's Blue Angels demonstration squadron adorn the corridors. In a room on the second floor, a "Star Wars"-like screen follows the progress of planes across the country.

Winthrop shows a visitor around the terminal at Van Nuys, where gleaming striped jets and small white airplanes are polished, vacuumed and checked by Air Group workers. He delves into details about the planes and their capabilities.

Winthrop has provided hands-on stewardship as Air Group thrives in a crowded market, vying with companies such as Woodbridge, N.J.-based NetJets, which allows corporations to share ownership of aircraft. Winthrop said Air Group toyed with the idea but decided that it was too complex and that Air Group could succeed on the basis of past relationships.

So far, he's been right, and the company's expansion is a good indication of that.

In the last few years, there's been a fair amount of competition at Van Nuys, the world's busiest general aviation airport, among companies fighting to open new and improved facilities in an already crowded space.

In 2004, Air Group was part of a failed bid for the right to lease space in a sought-after jet center at Van Nuys. After the companies complained that the lease was awarded based on political influence, the process was relaunched and Air Group decided not to participate.

But this year, when leaseholder Aerolease Associates received permission from Los Angeles World Airports to redevelop a site at Van Nuys, the company awarded Air Group the opportunity to lease the new site.

"There's a demand for facilities at Van Nuys, and we've had a great relationship with the Air Group," said Curt Castagna, president of Aerolease Group, a collection of affiliates with properties at area airports, including Aerolease Associates.

Castagna said Winthrop had a reputation for running a "first-class company" and for being honest and personable. "That's what makes his business successful."

Winthrop will need to bank on such connections as more companies try to tap into a lucrative market.

But he said he was confident that Air Group would thrive. "We've always been a very relationship-driven company."



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