How to Survive A Recession

March 20, 2015
Threshold Aviation Group not only kept its facility open but continues to grow

At the beginning of the recession, many businesses were downsizing their operations, laying off employees and, in some cases, closing their shops all together. Threshold Aviation Group (TAG), based at the Chino Airport in Chino, CA, is an example of an aviation business that not only kept their shop open, but continued to grow, despite the recession.

TAG is one of the largest maintenance and management facilities in Southern California, with more than150,000 square feet of hangar and office space and a 7,000-foot runway. It’s a member of the National Business Aviation Association (NBAA) and its charter company, Threshold Air Charter Inc. is Gold Rated by ARGUS International, Inc. TAG also operates an FAA-approved Part 145 repair station, and is authorized to maintain and repair nearly any aircraft.

TAG’s full-service aviation business services includes executive terminal facilities, fuel services, hangar storage, aircraft maintenance and interior shops, aircraft management and operations, as well as aircraft charter services. The group conducts business jet completions, modifications, interior repairs, and avionics upgrades. TAG has an active aircraft acquisition and sales department as well.During the recession, TAG grew its operation due to its low-cost structure. Compared with its competitors located in the Los Angeles and Orange County areas, TAG’s always less than other operators. TAG’s focus and emphasis on its customers has made it the premiere aviation service provider in Southern California.

Though TAG pays the same for fuel that everyone else does, the FBO keeps is fuel costs lower — as much as $2 a gallon lower — than the competition. “It’s simple — we try tosupport the flying public,” says Doug Crowther, director of business development. “It’s tough these days for folks to fly their airplanes because fuel is so expensive.

”In order to keep the cost of its aviation fuel as low as possible, TAG utilizes a narrow yield model to stimulate sales. The company sells over 1 million gallons of avfuel each year, demonstrating the validity of its business model.

Crowther says this philosophy pays off in spades because it brings more airplane owners to the facility, which in turn brings more work to the maintenance facility. “It gives us access to customers who already think positively of us, so that we can sell them services in addition to fuel,” he says.

One of the unique aspects of TAG’s operation is its business model that includes the flipping of aircraft. Over the last 15 years, it has purchased more than 50 aircraft from around the world, brought them to its facility, completed any required maintenance and repairs, refurbished the interior, and given the aircraft a fresh coat of paint. And then sold the aircraft at a significant profit.

“That’s been a real help to us during the recession,” he says. “As airplane owners sold their planes, we purchased them, performed whatever work they needed, and resold them.”

Crowther says it helps that the facility offers full-service upholstery and wood shops in addition to the maintenance side. “We can repair pretty much anything, even a replace a small piece of scratched up wood,” he says. “And it’s cheaper to do it with us than with other FBOs.”

Employee focus

TAG employs 65 people, including maintenance technicians, upholstery, and wood artisans as well as customer and line service personnel. Recently, the company has been consistently hiring one to two new workers a month. The trend is expected to continue as the workload continues to grow.

Little turnover takes place because working conditions favor the employee. Employees are compensated well, as pay is based on experience. All employees receive benefits, such as full medical and dental. Overall, employees enjoy the management who are constantly bringing in new aircraft and projects that improve their current skill set and teach them new skills.

“We treat our employees like family,” says Mark DiLullo, founder and chief executive officer of TAG. “We strive to make our operation a better place by listening to our employees, our customers, and our neighbors.”

In order to find highly skilled, qualified mechanics, Threshold Aviation Group partners with two local colleges to train new technical people. Once new mechanics are trained, the company provides them employment while they gain hands-on experience.

TAG manages several aircraft. As part of the aircraft management, the aircraft fall under TAG’s fleet insurance policy. TAG manages, maintains, stores, and operates the aircraft for the aircraft’s owners. At the owners option, TAG can place the aircraft in its charter department, which generates revenues for the owner when they are not using it.

TAG has completed high-profile work for government agencies, including NASA’s Glenn Research Center, located in Cleveland, OH. TAG and its contract partner were contracted to heavily modify one of TAG’s Gulfstream aircraft, with the installation of wing-mounted pylons carrying scientific instrumentation, as well as radar units on top and bottom of the aircraft. TAG was to operate it for NASA for a three-year period. After 18 months modifying the aircraft, sequestration cancelled the program. 

Community minded

Because of their successful operation, TAG has been courted by cities in other states that desire Threshold to relocate its operations.

“Even though we could have relocated to another state, like Nevada, we chose to stay in Chino. All of us at Threshold are highly invested in our community,” says Tom Bressan, chief operating officer. “Our staff works and lives in the Inland Empire. We pay taxes here. Some have lived here their whole lives. We are extremely happy to contribute to our community. ”

In December, TAG signed new leases with the County of San Bernardino to continue renting the facility at the Chino Airport. The lease agreement is for 10 years, but can be extended for an additional 10 years.

As a general rule of business, the company keeps all vendors and employees local, which helps stimulate the local economy via tax dollars. Threshold Aviation Group contributes an estimated $15 million annually to the local economy.

The company has been recognized for is their Christmas Hope, Love & Charity event, where they provide an annual Christmas dinner for families in need. TAG partners with the Chino Police Department, Chino Valley Fire Department and Mooney International to make this event possible. Along with the Christmas dinner, organizers make sure every child leaves with a toy, books to read, and crafts to complete.

“This is an event Mark and I look forward to every year,” says Lisa DiLullo, president of TAG. “The Hope, Love & Charity event allows my family, friends, and staff to give back to the community we serve. We are blessed and grateful to be able to help out our neighbors in their time of need.”

This past year, more than 3,000 meals were served, 2,000 of which were to children. Each family left with boxes of canned food for future meals. Over 2,000 books and toys were given away to children and 75 bikes were raffled off. Kids were also able to take pictures with Santa and Mrs. Clause.