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|Friday, June 15, 2012|
BY LINDA BAKER
This past winter, writer Jon Bell wrote an OB article about the heavy-lift helicopter industry, noting that Oregon companies accounted for an astonishing 85 percent of the industry worldwide. I recently chatted with Bruce Bennett, owner of Aurora Aviation, in connection with another segment of the state’s aviation industry: corporate charter flights and sales. His brief company and industry update focused on the impact of the recession, the shift from sales to maintenance, and the slow economic recovery.
First, said Bennett, the high-end jet market “has just been devastated.” Back in the day, when properties in Bend were doubling for years in a row, the same thing was happening with business jets, he says, recalling a five-year waiting list for a $65 million plane.
Not today. As the market was tanking, Bennett brokered a jet purchase for $5 million. Five years later, he brokered the same company out of that plane—for $1.3 million. “And that was top dollar.”
Having hit bottom, the market is starting to improve. Industrywide, "prices are still down but airplanes are moving,” Bennett says. “Three years ago, I’d run an ad and have to check the phone number to see if it was correct.”
In addition to brokering sales, Aurora Aviation operates six departments, including charter, refueling, maintenance, and a flight school. The charter business was hit the hardest. As that sector begins to recover, Bennett has shifted away from business jets that flew nationwide to more economical, propeller-driven planes that serve local areas.
Rising fuel costs have made operating planes more expensive while boosting performance for the refueling division, Bennett says. Meanwhile, industrywide a steady decline in airplane manufacturing is shifting the industry toward maintenance of existing fleets. To meet demand, Aurora recently hired a director of company maintenance and will likely hire more employes in that division, Bennett says.
“That’s where I’ve moved my company focus." Because demand for maintenance is increasing, Aurora is growing in a flailing economy, he said.
Not that the numbers haver returned to pre recession highs. In 2007, Aurora grossed $4.5 million and employed 27 people. In 2011, the company was a $3 million operation. The company currently employs 16.
Oregon’s charter industry isn’t a national or international driver like the heavy-lift helicopter business, says Bennett. “We’re certainly behind California with its busier and higher population." The business is marked by an "unusual" and friendly kind of collaboration, Bennett addds.
"No matter how many airplanes you have, there’s a day when you don’t have any. And no matter how small your fleet is, there’s a day it’s sitting. Customer service is everything. Competitors always work together.”
Despite the challenges, the recession is often framed as a golden age for collaboration and maintenance of existing possessions/inventory. In that context, Aurora and other aviation operators might be considered poster children for post-recession business strategy.
Linda Baker is managing editor of Oregon Business.
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