Blog about aviation & marketing

FBO Wanted – Part IV – “Show Me the Money”! By Rod Beck

Airplane Business 6 Comments

This entry is very interesting from the perspective that reality needs to be a part of the equation when operating an aviation business.  Recently the comment of “what is wrong with aviation, is that we have the wrong people operating it” is something that really hit me as true.  We have too many operators in the aviation business, that don’t really have any business experience, just the emotional excitement of aviation, and this is a big reason that General Aviation is failing.

Listen up AOPA, EAA, GAMA, or anyone else that is concerned about the pilot pool drying up.  The reason it is not sustaining itself, is that we have a fragmented industry that lends itself to completely opposite business fundamentals, incompetence and failure.  Why do college students who are working on marketing plans and business plans for an aviation entity, ask us (aviation consultants) why the low end segment in aviation is so dysfunctional?  Seriously, they seem to get it, and they don’t have the experience in business at this time in their lives, but they do figure it out.

As you will read an understand, the mantality of “the customer knows who we are”, “I have a pilots license, therefore I know everything about aviation business” is why most of these operators go out of business.  If 1 in 1,400 have a need for GA, I would guess from my experience, that GA is in reality, only finding 1 in 5,000 and that is why we quite frankly, suck at this.  Until someone provides leadership that the FBO/Flight Schools will actually follow, we will continue to decline the number of pilots that use and need general aviation. Read More

Hawker Beechcraft and the future of re-inventing the company.

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Recently I had a day with my friend who is an airline pilot for Delta Airlines.  He probably has 12,000 + hours at the age of 45 years old, and still, after flying Boeing 757’s/767’s (they are the same type ratings), he likes to go to the airport and fly for fun.  His father owned a 1950 B35 Bonanaza when he was growing up, and eventually sold that for a S35 Bonanza.  My first experience with my friend, was back in the late 70’s, when I challenged the Beechcraft Bonanza as a good airplane, but I thought the Cessna 210 was a better airplane.  Did I ever own a can of worms that day, and so every time we got together, he would always explain to me why the Bonanza was THE airplane, period!  So here is a hard core Beechcraft fan…and now he doesn’t know what to think of what the manufacturer is doing, other than they lost their focus, which I have to agree with. Read More

A sales and marketing plan for General Aviation single engine airplanes – from a business consultant

Aviation Marketing 1 Comment

Whatever happened to the lower end GA market, when single engine airplanes were selling, and new designs were being introduced on a regular basis?  The answer may be the infrastructure behind selling airplanes, because the factories have taken most of the sale in-house, and gave up on the flight school development and capturing of these buyers of the product.

Recently I had a college marketing student, Robert Ortner that was doing a project that he wanted to propose to Cessna, a marketing plan that would sell more single engine airplanes.  I gave him a few ideas, and wondered why it seemed that college students can figure out the problems associated with aviation, and the ones on the inside don’t seem to wonder why something isn’t working?  I found Robert to be an interesting guy who didn’t have a lot of aviation experience, yet he could identify with the key points I was making about why the down market in the lower end general aviation airplanes.  Not only is it the marketing focus that is not emotionally captivating, but also the distance from the customer that the factory has while trying to sell an airplane.

A few years ago, Hawker Beech took all King Air sales in-house, while Cessna did the same thing with its jet business.  Since the manufacture spends a lot of money in publications, they wanted to have a direct involvement with the sale of the airplane, and thought centralized selling was the way to go. While it eliminates the middle man and therefore brings the profits back to the factory, or the factory can offer a more attractive price, the facts are that the local sale office had a better feel for who could be a potential customer.  We always look at the automotive business as being the manufacturers job to market what the car is about, and let the dealer figure out how to market the sale!

Not too long ago, I spoke to a Cessna regional sales director for the Citation series, and he was picking my brain as to who would be a potential buyer for a new Citation Jet. As I sat in my office, I started to remember who used to own an airplane, and why they had sold the airplane, while at the same time, coming up with several people who had expressed interest in more performance and range than their current airplane.  The sales director was astonished, I had given him good quality leads that if followed up correctly, would have an opportunity of at least one new sale if he did it right, and that may have involved putting a partnership together, but a sale is a sale.

I spoke to a few of the people that I had suggested that the sales director get in touch with, and the effort was weak or no contact at all.  It amazed me that one phone call was considered a complete presentation, and that is where having a local sales office pays off.  Sooner or later these people are booking a trip on the airplane, and that is when interaction can take place and that which we call in the sales business – discovery! Finding out what they like about their current airplane, what they don’t like, and where they typically fly to.  If the company is profitable and needs more room…the sales office has a direction to work at putting together a sale.

The reason I believe it is important to have sales offices at strategic locations, is that everything is local in understanding and putting together presentations and sales. The flight school is one of those places that Cessna…you know, who has built more single engine airplanes than all manufacturers combined, learned that building the brand starts at the flight school Most flight schools today are barely profitable, and most just concentrate on flight training and don’t really stand out between any other flight school.  If they would embrace a sales strategy for the clients, they would find that a positive relationship built with likability and trust, would lead to a sale of an airplane, which means more flight training (instrument ratings) and if they own the shop, more revenue from the new owner of the airplane.

Cessna at one time was serious about this marketing concept, and it paid off. Cirrus never did get into the support of a flight school, but they should.  The idea would be to have an agreement with the light sport manufacturer that used to be Piper Sport, and make it the entry level airplane that you can cultivate the client into a future sale of a Cirrus. As Cirrus had the advanced airplane, it was an enticing airplane to look at, especially if you didn’t know anything about flying.  It was new, good looking, and had the modern avionics that gave it an edge. However, Cirrus was running out of steam prior to the market falling apart, and although they keep improving the design, the fact is they hadn’t captured enough of the new pilot population.

Recently a friend of mine was looking at purchasing a Subway franchise, and asked my advice.  Since they hadn’t soloed an airplane, I felt that they would at least listen to my advice.  As I told them the positives – great company, great track record, a scientific method of ensuring success in the market, national advertising, etc., it occurred to me that this was what aviation lacks the most.  It seems that if you like the smell of 100LL, that you are qualified to operate an aircraft business, and then we wonder why with no business and sales experience, marketing experience, and tenacity of driving home a deal, that aviation is failing in the pilot ranks!

If for example, Cirrus would go on the idea of developing student pilots into a feeder for future sales of the SR20/SR22 series, they would obviously make a franchise agreement.  This agreement would contain requirements signage, training materials, sales techniques, and capital requirements. By having this type of agreement, you can be assured that your sales office is going to be serious about building the brand and doing a good job with the customer.  It truly would be a win/win for the flight school, and also for the factory and especially for developing a higher quality pilot pool.  Because what we are faced with now is ANYONE who shows up at the airport is a potential student, instead of IDENTIFYING who has the money to learn how to fly and buy an airplane.

And that…in a nutshell, is what I hope will be the future of aviation marketing and sales…and we have a long way to go baby!

Mike Dempsey & Rod  Beck – Aviation business development and consulting.

 

User Fees – A method of destroying general aviation?

Aviation Thoughts 1 Comment

Here we go again, another proposal on taxing general aviation with additional user fees.  Again, we are trying to figure out who would really benefit from such a convoluted approach to defraying the cost of ATC, and other airway services.  My question is, why do we want to become a country like Europe and Canada, whereby General Aviation is HINDERED by excess fees and regulations?  There is a much easier method of financing the system, without imposing a user fee on turbine airplanes!  Its not that we are adverse to paying for the service, its the method. Read More

A new Single engine aircraft to go into production – will it generate future business?

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Trying to figure out what will trigger interest in the general aviation single engine airplane business is a tough question to find an answer to.  Recently, I found on Avweb, a news flash regarding a Brazilian design that is being reworked from a military two place trainer, into a four place civilian airplane (Novaer TXC).  It is all composite construction, retractable landing gear, with an option for air-conditioning and pressurization.  While all too early to get serious about the airplane, I would agree that advancements in the lower end GA airplanes is going to be important to any recovery in this segment.
 
There are a few people who question Rod Beck’s and my own opinion about what changes are going to be needed to get the low end GA market going again.  The question is why aren’t we just all the way in on anything with aviation, and get excited over every single aspect of general aviation?  Well, the truth is that there is a lot of dysfunction in this segment of the industry, one being the fragmented approach to building an aviation business that is designed to deliver a product that has a direct benefit to the real airplane user. Living in dreamville that has no chances of a successful outcome…and we are supposed to support this?  That isn’t what we are about, we are about being successful with a realistic projection of business development…wouldn’t that be the primary reason for hiring an aviation consultant?
 
What do you mean by that, do you ask?  It seems that time and time again, whether it is AOPA, or any other organization that is trying to figure out why the pilot population is contracting, the truth is that this is a BUSINESS, which may as well be a four letter word, and has lost its focus on who is the customer we need to focus on.  Many flight schools seem to cater to the business that is going to be there anyway, same with the smaller FBO’s.  That is why many of these small business entities don’t do any marketing, or worse yet, don’t understand it at all.  We get inquiries from people who want to be in the aviation business, but when you start asking hard questions like available capital, and projected income from these “opportunities”, they pretty much fall off the map never to be heard from again!.  Some do indeed go forward into doing what they have dreamed of and loved, only to find that it wasn’t the smart thing to do. Most, after losing the nest egg or “found money”, probably never look at an airplane again!
 
What AOPA, GAMA, EAA, or whoever really understand we have a problem and wants it fixed, is going to have to realize we are in the aviation BUSINESS, not the aviation “boys club”!  The results of all the ridiculous action that these organizations believe is the problem, is a futile attempt at trying to look good…but the results are always the same.  The truth is, we need to develop sound business fundamentals and work with the aviation groups to identify what realities are in front of us, and how best to offer a successful plan on building the business around real customers.  Floundering around with the social aspects of aviation is fine as long as you are honest with yourself as far as results go, but the truth is we need to be focusing on the true users who benefit from the lower end general aviation products.
 
As I read the article on-line at Avweb, I was interested to see the Ledyard Capital Management investment firm having an interest in a general aviation aircraft.  The comments about advancements in this segment of aviation were interesting, the new carbon fiber airplane offers improved performance, payload, and range…but will it be enough?  The fundamentals to the airplane are correct, they also have the Brazilian government backing for certification,  so project delays and re-design problems are not going to be compromised as much.  I think any new airplane brought to the market offers potential, at least it is a new product that offers a buyer alternatives and INTEREST in airplane ownership.  Without any new products, it is hard to get people excited about a tired looking Cessna 172 as the choice for cross country travel – a new paint scheme and glass panel – but you still have a sixty year old design!
 
I am hoping the Ledyard Capital Management knows what they are doing, because the high capital costs and low volume is a lot of risk.  The aircraft may give Cirrus a run for the money, and I am a guy who likes retractable airplanes for efficiency and performance.  However, one reason the Cirrus has been successful, is that a lower time pilot has been able to step up and into some serious performance because of the fixed gear configuration.  If you don’t have an instrument rating, and you want to buy a high performance single like a Beechcraft Bonanza A36…good luck finding insurance, or at least reasonable rates.  You can do it in the Cirrus and get performance very close to or better than the A36, and insurance is available for the low time pilot.
But truly, this is what the lower end General Aviation needs to develop excitement about a product, and this is what the pilot population needs.  An airplane that offers new manufacturing techniques, more performance, while making it a good looking airplane that offers a lot of utility.  The “flying car” is pretty much a novelty, and not really practical and won’t sell very well…I hope they are aware of that?  My contention is that airplanes that can be inspected annually at a cost of less than $1,000 with an engine the virtually goes 2,000 hours or ten years with nothing more than regular oil changes is an advancement for our industry!  The real key to getting lower end GA going, is going to be around engine development that is more efficient, less costly to maintain, and at a price that is more reasonable than we are currently getting. Is there an LSA out there that could get the ball rolling; YES, with a well defined marketing and distribution plan!
 
Because that is what sales is all about, the product period!  You can market something anyway you like, but if you don’t have the product that is the real deal, it won’t take long and sales will decrease year after year.  Once we have a product that really makes an advancement over older existing designs, will we find the  money coming back into this segment, and at that point, hopefully we will have figured out how to market and sell what we have.  As it is, we generally think it is ok to have a student washout rate of 80%+ and those who become private pilots…well we seldom see them much after they do obtain their license!.
 

 

FBO Wanted: Part III “Why FBO’s Fail? by Rod Beck

Aviation Thoughts 1 Comment

The title “Why FBO’s Fail” is the theme of this article and we’ll focus on the smaller community GA airport FBO, often referred to as the “Mom& Pop” FBO, not the larger “corporate” FBO’s such as Landmark, Signature or Million Air or independents such as Duncan or Elliot Aviation.

One might ask; why do so many small BUSINESS fail – isn’t the local FBO also a small business – or is it? Read More

Aviation and making money – can we put some reality back into this?

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It has been a while since I last posted, as I needed to step back and take a look at this aviation industry from an “outsiders” perspective…and it still looks rather nuts to me!  What do you mean by that Mr. Dempsey?  Well, it seems that General Aviation lacks a certain fundamental focus, and that is to conduct business like a professional with the ultimate objective of producing profits while providing a great product.  It seems that because aviation is such a great industry, that all we have to do is show up and things will work out.  Ever wonder why Hawker Beechcraft is bankrupt?  Read More