Private Jet Business Driving General Aviation Growth

Private jets are driving growth in general aviation.


National player?

Rectrix hopes to build a chain of FBOs beyond Massachusetts and Florida, but the competition nationwide is stiff.

"The business jet industry is the strongest part of aviation these days," said Matt Thurber, senior editor at Aviation International News. "A lot of financial interests have discovered it and are building very strong, high-class FBO chains."

Several chains have a head start on Rectrix.

Signature Flight Support, part of the British BBA Group, has an FBO at its headquarters in Orlando, as well as in Fort Lauderdale, Palm Beach and Jacksonville.

Galaxy Aviation, which bought a family-owned FBO at St. Augustine-St. Johns County Airport in January, is in several smaller airports: West Palm Beach, Boca Raton and Stuart.

Signature and Galaxy are just two of the major operators in Florida, a top state for general aviation.

Equity firms, including Macquarie Group and The Carlyle Group, also have companies in the FBO game.

The investor-backed groups have paid outstanding prices for a few strategically located FBOs, and that has made buying into the market difficult for upstarts, said Phil Botana, vice president and general manager at Tampa International Jet Center, which opened in October 2004.

The prices that existing FBOs command is the main reason that Rectrix will build from the ground up, Cawley said.

"It's cheaper. It's painful, but it's cheaper," he said.

The airport first leased to Rectrix in May 2004. The company's due diligence period was extended twice because of permitting delays.

Construction was supposed to be complete this fall.

Rectrix has all the necessary clearances from the Federal Aviation Administration, but Cawley said he had trouble finding qualified contractors.

Building from scratch is not unusual. Professional football agent Michael Azzarelli led a group that spent $12.5 million to build Tampa International Jet Center.

Azzarelli went into an airport dominated by one FBO, Raytheon Aircraft Services, and turned a profit fairly quickly, Botana said.

Botana, who at one time oversaw a chain with 21 sites, said his rule of thumb for FBO survival is to pump 750,000 to 1 million gallons of fuel a year.

"It's a terrific cash business," said Thurber, who has written about aviation since 1985. "The volume is huge. You gas up a Gulfstream (a popular 15-seat jet), you're talking $5,000 to $10,000 right there.

"If you can build a good repeat business, it's definitely worthwhile."

Like Azzarelli in Tampa, Russell and Cawley are relying on aviation veterans to make Rectrix a success.

Chief Operating Officer Bill Weibrecht left his post as manager of the Martha's Vineyard airport, which handled all ground services. He previously oversaw ground operations for a small commercial airline.

"We hired who we felt was the best guy in the industry," Cawley said. "His dog's name is Boeing, and his son's name is Logan. What does that tell ya?"

Cawley, an electrical contractor and consultant from Sherborn, Mass., is a cousin of Russell's wife. He joined the company as president overseeing construction.

Russell is a biochemist who in recent years has served as a corporate director alongside Robert Louis-Dreyfus, a member of the French family company that has agriculture, energy and real estate interests worldwide. Russell and Louis-Dreyfus are major shareholders and directors of Emcore, a New Jersey company that makes electrical components.

They also hired James Hausch, a Bradenton resident who was president of Adler Aviation Services. Hausch is on the Rectrix board of directors.

Cawley said the decision to get into fixed-base operations was simple. Fuel and aircraft sales were increasing. And the threat of terrorism will only drive more corporations to private travel.

"It all adds up," he said.

Rectrix started leasing land at the airport in 2004 and in the meantime opened a smaller FBO at Barnstable Municipal Airport in Hyannis, Mass.

The company will rely on private money to build new FBOs at underserved airports, Cawley said. He is on the lookout for at least three more locations across the country.

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