Economic Recovery Lifts Region's Aviation Industry
YOUNGSTOWN, Ohio -- The economic headwinds that pushed against the region’s aviation industry over the last three years have eased, allowing charter companies, smaller airports and flight schools in northeastern Ohio to recapture business lost during the Great Recession.
Still, the high cost of fuel and a tepid recovery are obstacles many of these small operations face, while others have business models that allowed them to weather the worst of times.
“We’re up 40% year-over-year,” reports Corey Head, director of operations for Sky Quest LLC, a private charter service based at Cleveland Hopkins International Airport. “We grew throughout the recession.”
Sky Quest manages six private charter jets in Cleveland -- four Beechcraft Beechjet 400s and two Hawkers, Head says. While all of these aircraft are privately owned, 70% of the business is composed of what he calls “ad hoc” charter flights that cater to businesses in need of the service once or twice a month.
“We target management,” Head says. The beauty of a private charter service is that executives can fly directly to their destinations without the hassles of long check-in lines, baggage inspection, layovers and other delays associated with a traditional airline.
Moreover, it provides companies the luxurious alternative of using a private jet without owning one, Head says, which has proved an attractive option for many corporations that have cut costs. “I would say on average, they fly three to four days a week,” he notes.
The typical passenger is an executive from New York who has a meeting in northeastern Ohio and needs to be back in New York that same day, Head notes. Businesses that have the cash to afford a charter – an average charter sells for about $2,800 an hour for a seven-passenger Beechjet -- find it productive because executives can conduct meetings or prepare for presentations during the flight.
“We’re also seeing an increase in business from the Youngstown area,” he says, noting that the company works closely with Winner Aviation, a fixed-base operator at the Youngstown-Warren Regional Airport in Vienna Township.
“We do a lot of trips with Winner. They also have a Beechjet, and it allows our clients to enjoy the same type of aircraft that they’re accustomed to,” he says.
Over the last two years, the company has increased its fleet and is looking to add another aircraft, possibly next year. “Our goal is to add another plane,” Head says, “but it’s in our best interest to have controlled growth and continue first-class service.”
New aircraft shipments and sales overall in the aviation industry are ahead of last year, according to the General Aviation Manufacturers Association.
The organization reports that during the first half of 2013, total worldwide shipments of general aviation aircraft – that is, piston, single- and multi-engine engine turboprops, and business jets – totaled 1,014 units, an increase of 8.9% over the same period in 2012.
Sales of piston aircraft rose 16%, sales of single-engine turboprops were up 3.8%, while multi-engine turboprop sales soared 70.6% during the six-month period. Sales of business jets, however, decreased roughly 4%.
Also, total dollar sales increased 26.4% from $8.2 billion during the first six months of 2012 to $10.4 billion this year, GAMA reports.
The region’s economic recovery – spurred to an extent by major investments by the oil and gas industry – has also helped lift business across the aviation sector.
“Business has been pretty good, especially in our flight school,” says Ben Pidgeon, who runs the Salem Airpark and Skyline Diner along state Route 45 in Goshen Township. “We have about 15 students right now and a couple will finish up this fall.”
Interest in obtaining a pilot’s license in this region is on the rise, Pidgeon says, especially since there appears to be additional money flowing into the economy because of lucrative oil and gas leases large landholders in the area have signed.
“A lot of our students are products of the oil and gas boom,” Pidgeon says. “Some of the kids come out here, and their parents are farmers. They can afford these kinds of things now and have a career.”
Salem Airpark, designated a Part 61 flight school, provides basic training so students can obtain a private pilot’s license, Pidgeon reports. A student must log at least 40 hours of flight time, plus pass a written exam to gain certification. On average, it costs between $7,500 and $8,500 to secure a private pilot’s license.
“It’s typical for younger people to get it within a year,” he reports. For older flyers, it usually takes longer, about 18 months, he says. “In July, one of our students received his license on his 17th birthday.”
Salem Airpark houses 58 single-engine propeller aircraft, four of which are set aside for flight training. The others are privately owned, Pidgeon adds.
Moreover, a private pilot’s license can become a steppingstone to a career in aviation, spurring a student to pursue additional training in aeronautics through programs at Kent State University or Ohio State University, Pidgeon says. “It can open the door to a great career.”
Most prospective pilots are between the ages of 30 and 60, he notes. “They have extra money, and they’ve wanted to do this for a hobby. Or, they think it could help their business.”
Among the drawbacks in the industry is the price of aviation fuel, Pidgeon relates. “I started working here in 2002 when I was 15,” he says, just after his family, who owns the farm next door, purchased the airport. “Then, fuel was $1.72 a gallon,” he says. “Today, it’s $5.93.”
Still, one needn’t be among the wealthy, Pidgeon says, to afford a pilot’s license or even an aircraft.
As an example, Pidgeon pushes out of a hangar a two-seater plane used to train pilots in aerobatics – another business altogether through the airpark’s sister company, Bad Attitude. The aircraft is small, but Pidgeon reports the business purchased it for roughly $30,000 -- less than the cost of a luxury automobile. Other aircraft at the airpark were acquired for less, he says.
Pidgeon adds that he’d like to add another aircraft in the near future and build up the aerobatics training business. “I’d love to bring in some more advanced training,” he says. “It’s kind of a niche thing, and people come from all over the area to get training in Salem, Ohio.”
The restaurant in the airpark, the Skyline Diner, also helps draw attention and business to the aviation school because those eating breakfast or lunch can watch aircraft take off and land.
“I’m a pilot myself,” he says. “Once you start flying, you have this feeling of complete freedom. And you keep wanting to do that.”
EDITOR'S NOTE: First published in the October edition of The Business Journal.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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