Tampa Report

June 8, 2000


Highlights from the AS3 show

By Jordanna Smida, Associate Editor & John F. Infanger, Editorial Director

June 2000

TAMPA — In May more than 2,300 attendees convened for the NATA (National Air Transportation Association), PAMA (Professional Aviation Maintenance Association), and NPMA (National Petroleum Management Association) convention. Hot topics on NATA's docket included the future of air charter, results from AAAI, e-commerce, and fractionals. Here's our report.

William deDecker, partner, Conklin & deDecker, during the convention's charter session, says the challenge charter faces is in identifying the charter traveler. Noting that market research is scarce in this industry and that he is finding more travelers frustrated with the airlines, deDecker states that it is time to listen to what this segment needs. "A lot of people prefer jets by a huge margin," he says. "The key to meeting demand will be through an increased fleet, luggage space, and private toilets," he says. He adds that an airline level of safety, as well as minimum hassles and simple billing, are expected.

Simplicity is also a key factor in meeting the increasing demand, deDecker says. He suggest looking to fractional programs as an example. "There's one service and one bill. It's simple," he states.

As demand for charter increases, better scheduling models will be needed. deDecker stresses the importance of a cooperative dynamic using the Internet to increase demand. "We tend to market to ourselves and don't go outside the box," he states. Delivering a level of standardization will also be important, he says, such as having a fleet's exterior the same color and like interiors.

Fred Gevalt, publisher of Air Charter Guides, noting the flood of dot.com charter purchases, says, "The reality is the Internet is here to stay. We'll get caught if we don't stop and think about information delivery, and how to do it." He suggests looking to online charter brokerage and models such as skyjets.com, legfind.com, and ebizjets.com as templates.

Passengers frustrated over bad deals with the airlines represent about $30 billion in revenues, deDecker explains. "We have to figure out how to round them up and get them in one place at one time," he states. He suggests that charter operators utilize e-mail, integrate or link their website with other sites, and provide more timely data on the site.

In a special session with the FAA regarding flight standards leadership, Nicholas Lacey, director of flight standards service, FAA, addressed some key concerns of operators.

One of the common criticisms of the FAA is inconsistency among the regional officers. Some of the complaints aired by operators at the meeting included inspectors who weren't qualified or knowledgeable in specific areas and discrepancies in policies, rules, and enforcement.

Lacey addressed the concern of inconsistency, sharing the audience's frustration and pointing out the need for a performance-based pay system within the agency.

"Performance-based pay and equivalency will allow the right skills to be in the right place," he states.

Some operators expressed their frustration with "multiple FAAs," citing that there were 102 FSDOs for nine regions and a lack of qualified inspectors.

Lacey, expressing the need for standardization and professionalism at FAA, says an internal review will be conducted to assess the problem.

The Business of e-commerce
Increasing revenues, productivity, and business via the Web were the focus of a session on e-commerce.

"E-commerce is about business, it's not a technology issue. You must deliver content at any time, at any place, and on any device to anyone," states Jodie Brown, chair and CEO of Web Force International.

"The Internet can take your best sales rep and have them work 24-7," states William Marino, president/co-founder of GS2Net. He says that the driving change behind the Internet is the bottom line — adding efficiencies and cutting costs. And, the Internet can provide those savings on long distance, shipping, and paper.

Brown notes that one of the misconceptions with having a website is the attitude of, "Build it, they will come". She says companies still need to market themselves. "Sites are the same marketing, but they just reach more people," she states.

Brown explains that the Internet is a good opportunity to offer value-added customer services, such as: interior views of aircraft; presentations; products, parts, and pricing; answers for frequently asked questions; and customer records.

Capturing the audience and learning the customer are the key to establishing a successful Web presence, Brown states. There are a few tricks to ensuring that a website is picked up by the search engines:

• Use titles early in the alphabet;
• Use a multiple database submission service;
• Place keywords at the beginning;
• Use important words at least four times;
• Hide search words in the background. (Make the text the same color as the background on your site; the viewer can't see them, but the search engine can.)

Other marketing strategies include advertising a website on the phone when a caller is placed on hold, and to put a website on packaging, Marino says. There are also more than 400,000 directories to list and link with, he adds.

Five ’E's' to consider when entering e-commerce, Marino says, are:
1. Elevate brand;
2. Exceed experimental and technological boundaries;
3. Earn money;
4. Energize visitors;
5. Emphasize customer service.

"The Internet isn't a technology for business, it's a communication medium," he states. "In five years, those who don't have an Internet strategy will be out of business because their competition does."

Pricing for Profit
One of the challenges for flight training providers is determining a fair price and making a profit. Nancy Grazzini-Olson, president of Thun- derbird Aviation, Inc., advises, "You need to look at your gross profit and determine what the costs are for running the services you offer," she says.

Centers must look at all costs and determine the return on investments. Grazzini-Olson says the key is to figure out the break-even point and decide the bottom line from there. "What do you need to do for return? What do you want for a return?" she asks.

Grazzini-Olson encourages centers to compare the competition's (industry and non-industry) value-added services and rank them. "This should leave you with a picture of where you stand and where you need to go."

When rates change, decide up front whether to bundle or unbundle services, Grazzini-Olson says. "Review rates regularly, get feedback from customers, and watch sales trends," she suggests. "Always be prepared for trends to change."

Schools providing discounts to facilitate good customer service need to be cautious. "Do not provide unplanned discounts," she says. "Offer specials with deadlines, earned discounts. Give slowly, but negotiate hard."

Recruitment and retention
In a back to the basics session, Debbie Siday of TMG states, "You can have the tools, but you need the people with the skills." Today's business environment does not have enough qualified people to get the job done, she says. Siday challenges NATA members to focus on their workplace culture. "The top reason employees leave is due to the culture you create," she states.