Avantair thriving in this economic downturn...

johnsonrod

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I found this on AINonline. Nice to see someone doing well. Makes sense in this economy and I am sure the number of shares will grow more and more given the great fuel efficiency of the airplane. Downsizing seems to be a big trend among the rich these days (i.e., houses, cars and airplanes) - at least for now. I realize Avantair has frozen its hiring - any word on when future hiring could restart and which domiciles would most likely be offered? Which domiciles are likely to be full/closed?


Avantair Flying High in Face of Recession
As the larger fractional ownership operations lay off employees and/or reduce aircraft delivery rates, Clearwater, Fla.-based Avantair is watching its fleet of 53 Avantis and Avanti IIs grow as quickly as Italian manufacturer Piaggio can deliver them, with six more due before year-end. CEO Steven Santo attributes the growth to economic conditions and the operating economics of the twin-turboprop Avanti, which has a cabin equivalent to that of a midsize business jet, a max cruise speed of more than 400 knots and low fuel burn. “Economic conditions are kind of forcing people to look for better alternatives in private aircraft travel and they’re finding us,” Santo said. Approximately 80 percent of those flocking to Avantair are coming from other jet-aircraft fractional programs, he added. The company’s revenue in the first quarter was up 15.7 percent. To entice even more converts, Avantair recently introduced the Axis Club Membership, under which members can fly for as low as $2,867 per hour. “This is based on a special program we are running where you receive five bonus hours for each flight block you purchase up front,” a company spokeswoman told AIN.
 

On Your Six

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I found this on AINonline. Nice to see someone doing well. Makes sense in this economy and I am sure the number of shares will grow more and more given the great fuel efficiency of the airplane. Downsizing seems to be a big trend among the rich these days (i.e., houses, cars and airplanes) - at least for now. I realize Avantair has frozen its hiring - any word on when future hiring could restart and which domiciles would most likely be offered? Which domiciles are likely to be full/closed?


Avantair Flying High in Face of Recession
As the larger fractional ownership operations lay off employees and/or reduce aircraft delivery rates, Clearwater, Fla.-based Avantair is watching its fleet of 53 Avantis and Avanti IIs grow as quickly as Italian manufacturer Piaggio can deliver them, with six more due before year-end. CEO Steven Santo attributes the growth to economic conditions and the operating economics of the twin-turboprop Avanti, which has a cabin equivalent to that of a midsize business jet, a max cruise speed of more than 400 knots and low fuel burn. “Economic conditions are kind of forcing people to look for better alternatives in private aircraft travel and they’re finding us,” Santo said. Approximately 80 percent of those flocking to Avantair are coming from other jet-aircraft fractional programs, he added. The company’s revenue in the first quarter was up 15.7 percent. To entice even more converts, Avantair recently introduced the Axis Club Membership, under which members can fly for as low as $2,867 per hour. “This is based on a special program we are running where you receive five bonus hours for each flight block you purchase up front,” a company spokeswoman told AIN.
Can't say that I am surprised. I think I heard 5-6 different Avantair aircraft while flying in the Northeast today. You hear a lot more of those flights these days as their popularity is growing. That Piaggio is a great performer over short distances and it has some real ramp appeal. One thing is for certain: you can hear them from miles away - it has a distinctive whine that reminds me of a P-51 Mustang.
 

cherry20's

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That's great news! Good to hear everything is going well with you guys. I always thought they sounded like a Challenger 601 with its backup wind generator hanging out the front. Very distinct whine from the ground. I hear them flying into LUV all the time.
 

netjetwife

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What a relief for the Avantair families! I do hope your management is compensating the pilots in accordance with their professional responsibilities and contribution to the company's success, especially considering that other frac pilots have been furloughed (or face that risk) at the companies your new customers are leaving. Hopefully, the economy rebounds this year and business improves at all of the fracs. NJW
 

AftCG182

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What a relief for the Avantair families! I do hope your management is compensating the pilots in accordance with their professional responsibilities and contribution to the company's success, especially considering that other frac pilots have been furloughed (or face that risk) at the companies your new customers are leaving. Hopefully, the economy rebounds this year and business improves at all of the fracs. NJW
We're taken care of pretty nicely by the management. There's no "butting of heads" like can happen at other operators sometimes. Noone is getting taken advantage of here. We had to tighten the belts a little while back, and the cost-cutting measures worked wonderfully! It's interesting that you bring up "Avantair families"... I've got more confidence that I'll be able to provide for my 4 year-old than I've ever had. (In an aviation job... how about that!) However, nobody at our company- pilots, management, admin, maintainence, or whatever is happy that some of our business has inadvertantly come at the expense of others at the other operators. Some people will say "that's just the nature of doing business", but it's kind of different in the Fractional industry. There are enough well-off folks for everyone. I've written before that if we can just ride out the current economic conditions for a little while longer, things will return to being good for everyone. I still believe that, and also believe thay 2010 will be a return to prosperity for everyone.
 

jonjuan

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... I've got more confidence that I'll be able to provide for my 4 year-old than I've ever had. (In an aviation job... how about that!) However, nobody at our company- pilots, management, admin, maintainence, or whatever is happy that some of our business has inadvertantly come at the expense of others at the other operators. Some people will say "that's just the nature of doing business", but it's kind of different in the Fractional industry. There are enough well-off folks for everyone. I've written before that if we can just ride out the current economic conditions for a little while longer, things will return to being good for everyone. I still believe that, and also believe thay 2010 will be a return to prosperity for everyone.
“Economic conditions are kind of forcing people to look for better alternatives in private aircraft travel and they’re finding us,” CEO Steven Santo said. Approximately 80 percent of those flocking to Avantair are coming from other jet-aircraft fractional programs, he added."

"We are pleased....Furthermore, the current market environment serves to highlight our position as the lowest-cost and most fuel-efficient provider in the Light Jet market, attracting an increasing number of customers from competing fractional programs, as they continue to seek a more affordable alternative."

One of these things is not like the other..........
 

AftCG182

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I'm pretty sure Mr. Santo is referring to one company increasing it's business as compared to another company losing some of it's business. What I'm talking about is those of us grinding the gears, making the wheels of the operation turn every day. In other words, the individuals within the company. I certainly don't wan't to see a single person lose pay or lose any of his/her family's level of security because of one company's sucess versus another company's struggles. That's the best that I can do for a clairification.
 

netjetwife

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We're taken care of pretty nicely by the management. ... Noone is getting taken advantage of here. I'm glad to hear that. There's always a fear that low wages will be used to undercut those seeking to raise the bar for the industry. We had to tighten the belts a little while back, and the cost-cutting measures worked wonderfully! Hopefully it will at NJ, too. I think all of the fracs can learn something from each other. It's interesting that you bring up "Avantair families"... The well-being of all our frac families is on my mind a lot, thus in my posts. I think it's important to include the family perspective in industry discussions here at FI. I've got more confidence that I'll be able to provide for my 4 year-old than I've ever had. (In an aviation job... how about that!) Very good news, especially in this economy. Tell your 4 yr old (son,daughter?) a lady on the computer says "Hello!" :) However, nobody at our company- ... is happy that some of our business has inadvertantly come at the expense of others at the other operators. ... Thanks for expressing that. I'm glad you understand that my happiness for Avantair is tempered by worry for the others. There are enough well-off folks for everyone. I've written before that if we can just ride out the current economic conditions for a little while longer, things will return to being good for everyone. I still believe that, and also believe thay 2010 will be a return to prosperity for everyone.
I second your hopes and positive outlook, Aft. Actually, I think Avantair's growth is a good omen for the entire industry. With all the talk of flying being down I had the impression that many of the pax weren't flying private aviation at all. I'm glad that's not strictly true. It means that the industry hasn't fallen as far as I thought and won't have as far to go climbing back up. Best wishes to the Avantair pilots and their families, NJW
 

jonjuan

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Sure, no one is happy about others losing business. I was just correcting your statement that "some of our business has inadvertantly come at the expense of others at the other operators" when in fact, most of your business (80%) has specifically come from other jet operators in the industry. Your success and family security comes at the expense of others. It's certainly not your fault, it's just business. It led to the success of Southwest and demise of others.
 

glasspilot

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I've posted this before, but I'll post again as it seems fitting to this conversation:

Avantair is like a pizza joint. I had a friend who owned a pizza restaurant. He loved the job security because when times were good poor folks who would otherwise stay home to eat would then splurge and go out. Guess where they went...pizza.

When times were bad rich people who always ate out would scale back and instead of an expensive meal would now get pizza. Either way, he had a steady stream of customers.

Avantair is like that. When times are booming we attract newcomers to private air travel. When times are tough (like now) then the people who were eating fillet mingon scale back and eat our pizza.

It is my opinion that you never want to serve the very top or the very bottom of any market for this very reason. Serve the middle if you want to weather all storms.

To tie this in to the present conversation; it's not our fault people are looking for more value these days. The days of excess and gross displays of wealth will probably come back, not to worry. But you can't blame the pizza shop when Mr. and Mrs. High Dollar decide to forgo steak and lobster and get delivery instead.

Gonna go eat some pizza now...

gp
 
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johnsonrod

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This might be the optimal time for Avantair to show off

I think we may actually see a change in how fractional owners view their airplanes and fractional choices in general. Sure, some wealthy people will never care about the money they spend. They will want the biggest and fastest option and not care about the expense. However, this "Great Recession" may impact spending levels among many small-to-midsized businesses and the not-so-super-rich people out there who still prefer private travel.

You never know, but some people who are trading down to the Piaggio may not return to the bigger, faster jet alternatives. It's a comfortable airplane and the share acquisition cost and the fuel efficiency may make a favorable impression on those people who don't have frequent long-haul requirements. Why do you need a Citation XLS or Lear 60 if the majority of your flights are within the Northeast or within the LA-SFO-DEN triangle? A Piaggio has the cabin of a Hawker and its performance does not lag too much behind an XLS on shorter segments. There is negligible time difference between a P180 and an XLS on a flight from TEB-BED or VNY-RNO and yet the difference in per hour and capital (financing on the share) costs is significant. I guess it depends upon the owner's average load and the "typical" mission (and its frequency). I suppose the owner could always charter a bigger airplane with the cost savings if a bigger load was required.

Again, I think Avantair is doing a good job of getting the word out during this recession. Now's the time to show off the fuel efficient and less-pricey Piaggio while potential owners are watching their wallets...
 

netjetwife

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... I was just correcting your statement that "some of our business has inadvertantly come at the expense of others at the other operators" when in fact, most of your business (80%) has specifically come from other jet operators in the industry. ....
In the interest of fairness, I must correct your correction, JJ. The 80% mentioned in the article refers to new business, not the total amount. Avantair has filled a niche in the market and already had a customer base of their own. Otherwise, they wouldn't still be in business.
 

NJAowner

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Avantair

For what it is worth, I looked at them for some supplemental lift and when reading their audited financial statements I got concerned. Among other things, their own auditors issued what is called a "going concern opinion" -- stating that in the auditors' opinion the company does not have the ability to continue, financially,without more $$ coming in as equity. Other than some very early stage technology companies with no revenue yet, a very, very, very small percentage of companies that get going concern opinions survive a few years. Yes there are exceptions and I am sure someone will find them. Also, there is a very high number of aircraft shares on the resale market trying to be sold.

A major concern with buying a fraction of a plane is that if something happens to the operator/promotor, how do I and 8-15 people I have never met manage our co-ownership of an expensive asset?

Nothing against Avantair. I thiink the planes look cool, but when you are on the ground they are loud. I can always hear one coming, of flying over the beach in Florida, long before I see it. It has a very distinctive sound.

Good luck Avantair. If you prosper, I do have a need for your aircraft. If NJA flew the Piaggio, I would add a big share and then worry about where I wanted to go.

Fly safe.
 

QOL_is_great:)

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a simple thank you

We're taken care of pretty nicely by the management. There's no "butting of heads" like can happen at other operators sometimes. Noone is getting taken advantage of here. We had to tighten the belts a little while back, and the cost-cutting measures worked wonderfully! It's interesting that you bring up "Avantair families"... I've got more confidence that I'll be able to provide for my 4 year-old than I've ever had. (In an aviation job... how about that!) However, nobody at our company- pilots, management, admin, maintainence, or whatever is happy that some of our business has inadvertantly come at the expense of others at the other operators. Some people will say "that's just the nature of doing business", but it's kind of different in the Fractional industry. There are enough well-off folks for everyone. I've written before that if we can just ride out the current economic conditions for a little while longer, things will return to being good for everyone. I still believe that, and also believe thay 2010 will be a return to prosperity for everyone.
It is just business and it's the American way. It's their choice to decide which operator works best for them and their pocket/wallet.

That said, you should ALWAYS make a point to thank that owner for their business. Thank them because you know they have a choice in who they buy into for aircraft ownship. It makes them smile and know you appreciate their business.

Good luck guy/gals at Avantair!! Happy times for ya!!
 

HazMat

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Nja owner you are looking at old financials AvantAir has a clean opinion from it's auditors and last quarter was profitable. We have also been around for 6 years so I really don't understand your survival statement. Many extremelly happy owners here. I had one tell me last week he feels dumb for not switching a year ago. He would have saved over 100 grand and not missed a beat. What seems to be selling is the axis program it works like a fractional share without the risk of ownership. Just out of curiousity what type of opinion does NetJets have from their auditors?
 

johnsonrod

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You never know in aviation but keep in mind that Avantair "should" be more profitable as it grows its fleet with the network effect. It will have more aircraft available for flights and require fewer expensive reposition/non-revenue flights. Obviously starting up any fractional with a small number of airplanes initially can lead to several early-year losses - that's not a surprise. The fact that the Piaggio is super-popular among share owners and other potential owners during these dark economic times says a lot about the product.
 

BoilerUP

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I just can't believe over $2800 per block hour is "cheap"...
 

doh

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I am very happy to hear you are doing well! C425 was in my CRJ class at Comair, and I know he is happy as a clam at Avantair. There are a few other of my fellow regional refugees with you as well. Keep up the great work!:beer:
 

glasspilot

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