Anyone in the happy position of being wealthy enough to own a business jet, is almost certainly not going to want to be bothered with the thousand and one details involved in taking care of that expensive and demanding asset. This leaves just two options: leave it all in the hands of the chief pilot, or hand the aircraft over to a specialist aircraft management operation.
As Mike Moore, Vice President of Sales and Aircraft Management at Meridian notes, the complexities involved in looking after an aircraft means that leaving it to the pilot – who has a full time job anyway – is unlikely to generate a satisfactory outcome. And if the owner wants to defray the costs associated with ownership by chartering out the aircraft when it is not being used, then no matter how competent you think your chief pilot is, the task is not within their scope. The only option is to find an operator with a strong aircraft management and charter sales track record.
Moore has spent the past eight and a half years helping build Meridian’s brand on the east coast generally, and more specifically, around Meridian’s Teterboro base. Now he is taking that same drive and enthusiasm to the task of establishing Meridian as a west coast, as well as an east coast, operator and aircraft management company.
In October 2016 Meridian opened its west coast FBO at Hayward. As Moore explains, Meridian is doing a phased build out at Hayward. The FBO as it now stands is a purpose-built 6,300 square foot terminal with support offices and has a 30,000 square foot hanger, and some 3.5 acres of ramp space.
Additional phases of construction are planned, and will include a second 12,000 square foot terminal, two 40,000 square foot hangars and an additional seven acres of ramp space. The facility will serve as a West Coast base for Meridian Air Charter and Meridian Aircraft Management. “Our aim is to build up demand for the existing hangar, especially for owners who want to offset costs by putting their aircraft onto our Part 135 certificate for charter operations. We’re happy to win on-commercial management contracts too. However, where we can provide both hanger space and fuel for owners, that supports the most profitable side of our operation and helps us to ensure that we maintain the highest standards of service and support,” Moore says.
Clearly, knowing each of your clients in real detail and understanding the various revenue streams associated with a particular client’s usage profile, is a key part of aircraft management. Moore is in the early stages of building Meridian’s reputation in California. “When we were building the brand on the east coast eight and a half years ago, it involved a great deal of cold calling and setting up meetings with owners to explain what was new and exciting about our approach to aircraft management, and the transparency that we bring to the whole costing process,” Moore says.
“Today we are a household name on the east coast and we compete directly with all the other tier one aircraft management companies, including global players. The task now is to take that out to California, but we recognise that it will take time and plenty of hard work to get the same degree of recognition and brand awareness in the west that we now have in the east,” he notes.
The initial target is to get around seven aircraft, all flying charter. Moore says that Meridian has the structures in place to deliver a uniform, top-of-the-line service coast to coast, with 24 hour, round-the-clock flight operations handled by licensed dispatchers. “We have an excellent team out in California and we are considering developing a repair station out there once the aircraft management numbers ramp up,” he comments.
From long experience, Moore knows that the sales cycle in aircraft management is rarely a short one. “You have to go in, over time, and establish yourself as the aviation expert, building trust as you go. Then you start getting the opportunity to generate proposals. We have been talking seriously to people who have aircraft in the Bay area, and now that we have our FBO open, I don’t have to try to bring people out to the east coast to show them our facilities. They can see the quality of our proposition right in their own back yard, as it were.”
Meridian has already won its first hangarage contract, with its first tenant being a Falcon 900. “We have our own Citation XLS out there so the hanger is starting to look good,” he comments. That first account has already opened the way to several additional conversations with owners. “If we do a good job managing your asset, you are going to tell your friends. So we make sure that we offer the highest level of service, the line by which all others are measured. This is a referral-based business,” Moore says.>
His philosophy is that aircraft management is very much a customer service business. “Anyone can operate your aircraft and get you from A to B. But if you want that to be done safely and cost effectively, plus having your costs offset with some charter hours, then that requires a high quality aircraft management operation. You need all the ancillary services, such as a professional flight team that can get you all the necessary permits, wherever you are going in the world.”
Maintenance is another essential element. Moore points out that Meridian has a Part 145 repair station at Teterboro, plus the skills to ensure that when, say, an aircraft comes up for a 96-month inspection and has to be put out to a major MRO shop, Meridian can get competitive bids and minimize your downtime.
Undoubtedly, one of the biggest problems in building up an aircraft management business is the tendency many owners have to shop around with price as their major criterion. Moore says that it never ceases to astonish him that people will put an asset worth tens of millions of dollars into the hands of the lowest price bidder.
“There really is no excuse for failing to go through a proper due diligence process, and I really emphasise this point with owners. They need to know how to recognise a mature, efficient aircraft management company from one that is in deep trouble financially and grabbing at every contract they can get. This is a very competitive market and if you are not growing, you are shrinking. Visible growth is one of the surest signs that a company is doing well. Do the staff look happy? Are the buildings all well looked after?” he comments.
Owners really do need to ensure that they or their representatives visit the prospective aircraft management company. “You want to base your decisions on the reputation and financial stability of the company. There are only a couple of ways that an aircraft management company generates revenue, such as charter, maintenance and fuel. If you do not want any charter on your aircraft and someone is offering you an aircraft management contract at a very low price, you have to ask yourself how it is going to be possible for them to provide you with a quality service over the life of your asset,” Moore advises.