Ahead: The Next Half Century

Nov. 4, 2005
In mid-October, Hill Aircraft & Leasing Corporation based here at Fulton County Brown Field (a.k.a. Charlie Brown Airport), celebrated 50 years of business.

ATLANTA — In mid-October, Hill Aircraft & Leasing Corporation based here at Fulton County Brown Field (a.k.a. Charlie Brown Airport), celebrated 50 years of business. When Guy Hill Sr. purchased the FBO in 1956, level of service meant something completely different than it does in today’s environment. Says Hill Aircraft VP Larry Westbrook, “Thirty years ago, if you had a lineman to flag you in and a power cart, that was high class.” Today, more is expected. As this traditional operator looks to the future, remaining a family business, providing more of the amenities its customers expect and changing with the industry remain top priorities.

“We’re trying to be even more service-oriented, providing even more amenities,” says Guy Hill Jr., president of Hill Aircraft & Leasing Corporation. “All we sell is service. You can buy fuel anywhere. It’s where you get the service and your people are treated the way you’d like for them to be treated, that’s where you go back.”

Guy Hill Sr., a Navy pilot who served in World War II, purchased the fixed base operation for $10,000, half of which was a loan from his mother. Today, the FBO is owned by Guy Hill Jr. and his four sisters, with Hill as president and brother-in-law Larry Westbrook as VP. It employs some 60 full- and part-time employees and offers aircraft sales, charter, maintenance, fueling, aircraft storage, and avionics.

Annual revenues are some $15 million, with 60 percent of that attributed to fuel sales. According to Hill, the FBO pumps some 1.3 million gallons of fuel annually, and Fulton County Brown Field sees some 126,000 annual operations. Westbrook says operations for 2005 are down slightly, which may be attributed to a decline in area flight school traffic. Corporate traffic has remained pretty steady, he says.

August 2005 was the best month for the operator in the past few years, says Westbrook, even with the rising cost of fuel. “Which is amazing to me,” comments Hill. “At what point do fuel prices slow people down? I think that in major markets with the economy coming back, fuel is on the increase. But if you’re in a smaller market, a smaller town, you’re going to see it drop off.”

Hill Aircraft’s 30-year leasehold includes some 20 acres and runs through 2028.

Eight aircraft are on Hill Aircraft’s charter certificate, including two Hawker 700s, two Citation IIs, 2 Citation Is, a King Air 200, and a Grand Caravan.

Hill’s 12,000-sq.ft. terminal was built in 1978 and recently underwent a $600,000 renovation. “It’s small dollars compared to building a new FBO,” Hill says. “To a family business, it’s a big investment.” The company also has some 90,000 square feet of hangar and office space.

Facilities Match the Customer

Hill says the company’s goal is to have the buildings match the level of aircraft and customers that use the facilities. “We’ve got people pulling up in $46 million aircraft; we’ve got to have a facility that they feel is worthy of their visit.

“My goal in this renovation is to have everything that every other FBO has. Anything that we ever saw at another facility that we thought was worthwhile, we added. Our whole industry is moving more toward the service, concierge industry.”

The lobby and flight planning room were expanded, technology was upgraded, and bathrooms were gutted.

“We went wild with Wi-Fi and technology,” says Hill. “We put in a theater seating flight planning room, with a 42-inch plasma [screen] and then we put four security monitors around that to show the ramp and the two entrances, so a pilot can sit in there, watch television, watch his airplane, and watch when his customers come up.” Also among the upgrades — and the most talked about change — two flat-screen televisions mounted above the urinals airing Fox News and The Weather Channel.

Continued Growth

Hill says the company is focusing more on aircraft management as an area of growth. Currently four of the aircraft on its Part 135 certificate are managed. “It’s an area that would increase all departments of our business: maintenance, fuel, hangaring.” According to Hill, the Atlanta market is quite strong for charter.

He also expects that the introduction of the entry level jet (ELJ) will dramatically change the industry, in terms of the number of pilots and aircraft flying. “If the ELJ concept works, there will be more airplanes flying, but we’ll be selling less fuel,” he says. “The model of FBOs focusing more on services works very well for ELJs.”

ELJs will also change the airline industry, says Hill. He believes airlines will become more focused on international travel, while ELJs will be the choice of business travelers for state-to-state transit.

“Chapter 11s have helped our industry,” says Hill. As security lines at airports and the uncertainty within the commercial airline industry increases, more and more business travelers are turning to business aviation.

As for expansion at Fulton County Brown Field, Hill says the FBO has an option on five acres of land, which expires in 2008. He expects that within the next year Hill Aircraft will be in the master planning stages and will determine what to do with the land. The Atlanta market is short on hangar space, says Hill, so this may be an area it would develop to accommodate additional hangars.

The real estate market is something Hill says FBOs should keep an eye on, particularly with respect to hangar leases and tiedowns. “We typically have given away hangars to get the fuel,” says Hill. I think it’s time the industry take a look at that model and say, are we really getting a fair price for what we’re putting in?”

Over the years, says Hill, the company has looked at expanding to additional locations. As of yet, the right opportunity has not been presented.

Industry Challenges

Like most operators, the events of 9/11 caused insurance costs to skyrocket for Hill Aircraft. “Insurance is killing us,” says Hill. “After 9/11 our insurance jumped dramatically. Our limits were lowered and our deductible was raised. We had a 50-fold increase on our deductible.” Since the initial increase, Hill says the “increases have slowed and we were able to negotiate on the deductible. This year we had no change on the liability of aircraft.”

At a time when private investment is entering the FBO industry and operators join large chains, Hill says there is still room for the independent, family-run business, like his. “We do fear that private money is pushing to make margins better and driving prices up while the competition next to them is losing out.

“Private money does add some value to the industry, but you’ve got to have an aviation person in charge of the business.”