Perhaps I am naively optimistic, but it seems to me that the doomsdayers are never right. Certain scientists, economists, and futurists take great pleasure in and make entire careers of forecasting doom and gloom for every facet of our lives. And yet whether it's the world economy or this little niche of it that we call general aviation, they've been wrong time after time.
Pardon me while I reminisce for just a moment. In the early 1970s when I was in elementary school, the Weekly Reader used to scare us to death with proclamations that by the mid-1980s the entire world would be in shambles because of overcrowding and our inability to feed the population. The United States and western Europe would be like India was at the time — with diseased and starving people scattered about the streets.
Now, in the late 1990s, those sorts of problems exist in some parts of the world, but on a scale much smaller than forecast 25 years ago. What the forecasters failed to take into consideration was advances in medicine, education, communication, transportation, and agriculture — all things brought about by scientists who spent their time doing real work rather than spreading propaganda to elementary school students.
Likewise, the collapse of general aviation has been forecast for 15 years, and yet somehow we have managed to survive, admittedly with less vibrancy than we once experienced. Today, student starts are up, new aircraft deliveries are reaching levels not seen in more than a decade, and the number of hours flown by some segments is also increasing.
Some will argue that the growth mirrors the economy. True enough, but despite the second longest economic expansion in U.S. history, general aviation has only in the last couple of years begun to feel the effects. In the meantime, plenty of perseverance has been necessary to set the stage for growth.
It is gratifying to work for an organization such as AOPA that, with its professional staff hard at work everyday, has had an impact on keeping GA alive.
Much credit also goes to the entrepreneurs of the industry who have toiled through the lean years. The forecasters a few years ago predicted that fewer than 2,000 FBOs would exist by the year 2000. And while the number of FBOs has declined, we still list more than 4,300 FBOs in our AOPA's Airport Directory database, not significantly fewer than there were 10 years ago. Many of these small operations face special challenges — from insurance to processing credit card transactions to environmental concerns, they have great needs and few resources.
One company offering solutions was Avfuel Corporation, itself an entrepreneurial enterprise. Celebrating its twenty-fifth anniversary this year, the company has been around long enough to have seen general aviation at its highest and lowest points.
When Craig Sincock acquired the company in the mid-1980s, it was a moderate-sized aviation fuel provider serving eight midwestern states. Today, with Sincock still in the role of president, Avfuel serves more than 2,300 FBOs and other businesses in 49 states, Canada, Mexico, and Europe. In fact, one in every five U.S. FBOs that sells branded fuel sells Avfuel. Sincock has built the company through a series of strategic acquisitions and a lot of one-on-one visits with fixed-base owners and operators. Five significant acquisitions since 1988 have brought the company both new customers and also more resources for existing customers in the form of additional refinery and transportation capabilities. Among the companies acquired that most pilots will recognize are Pride Aviation and Triton Fuel Group.
Outside of general aviation, Avfuel has fuel contracts with many airlines, FedEx, UPS, and the military, along with dozens of other cargo and charter operators. Besides those and traditional FBO sales, Avfuel also services individual pilots, corporate fleets, and hospitals that have their own tanks. About 70 percent of its sales are from jet fuel; 30 percent from avgas. You'll notice that adds up to 100 percent. Aviation is Avfuel's only business, another reason for it to be so focused on making sure that the industry is healthy.
While some fuel companies want to deal only with larger FBOs pumping hundreds of thousands or millions of gallons per year, Avfuel's run the gamut from small mom-and-pop operations to some of the largest FBOs in the country. Its larger operations usually qualify for Avnet status. Avnet locations offer a higher level of amenities and services than traditional FBOs. The status is granted by Avfuel once the facility meets certain amenity and fuel volume requirements.
Addressing the needs of smaller FBOs in particular, Avfuel developed Avtank, a subsidiary that designs, installs, sells, leases, and finances fuel tank installations. New environmental regulations are forcing the inspection and, usually, replacement of almost every underground tank in the country. Often, the cost of such an undertaking would bankrupt many FBOs, particularly if they had to hire out the designing of the system themselves. Avtank's one-stop-shopping approach to installation makes it an easier financial pill for the FBOs to swallow.
Liability insurance is another big concern for FBOs — along with workers' compensation insurance, which is often difficult for small businesses to buy economically. To answer those needs, Sincock formed Avsurance Corporation in 1990. Avsurance provides the aviation industry with property and casualty, liability, workers' compensation, and a variety of other insurance products. Besides FBOs, Avsurance also offers insurance for airports, hangar owners, fuel trucks, airports, flight departments, and even individual pilots.
During a recent visit to AOPA, Sincock, a former investment banker, related how he has managed to grow the company so effectively. "I've been visiting customers for 10 years. They always tell you which way to go. All you have to do is listen," he remarks casually. Sincock says he personally visits at least 100 FBOs each year, often flying himself. He is a private pilot with instrument and multiengine ratings. He regularly flies a Cessna Citation V Ultra, a Beech King Air 200, and a Rockwell Aero Commander when making the visits.
Avfuel also has 12 managers, whose districts cover the continental United States and most of Canada, Mexico, and Europe. As Sincock puts it, the managers' jobs are "to know everything that flies in their districts — from firefighting aircraft to horses being flown to the Kentucky Derby."
High turnover of personnel at FBOs causes a special concern for fuel providers. A continuous stream of new faces in the line crew means the potential for misfueling and fuel quality control problems. To combat this, Avfuel has a team of quality assurance representatives who roam the country in vans, visiting each Avfuel FBO to assure that their staffs understand how to conduct fuel tests and to monitor their fuel systems. The crews are available to the FBOs 24 hours a day via a toll-free number and beepers.
Training of line crews on proper fueling techniques is another issue for FBOs. "FBOs that really need the training information are the ones that can afford it the least," Sincock notes. To help those operators, Avfuel developed a series of seven training videotapes and manuals that are free to operators. "We were initially going to charge for the series, but once we got it produced, we realized that the information was so important that we should just give them away to make sure that everyone who needed the set could get one," he says.
Sincock recognizes that the FBOs aren't his only customers — individual pilots ultimately make the decision on where to stop for fuel. To entice pilots to Avfuel locations, Marci Ammerman, director of marketing, developed Avtrip. Like an airline frequent flier program, Avtrip rewards regular customers with points based on the amount of purchases. The points can be used to purchase U.S. savings bonds.
Apparently Avtrip and the company's other efforts are paying off. Survey results from Avfuel dealers seem to run contrary to the naysayers' predictions that the demise of general aviation is imminent. Conducted last August, the research shows that 52 percent of the Avfuel FBOs plan to expand within five years, by either growth or acquisition. Fifty-five percent plan to buy at least one new aircraft within five years. And the best news of all, 79 percent saw growth in their business during the first half of 1997.
So maybe I'm guilty of being hopelessly optimistic, but the news from Avfuel and other parts of the industry looks good. I don't know about you, but I'm going to take off the sackcloth and go flying.
