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Serving the fractional market

The aviation industry devours companies new and old, from mom-and-pop operations to titans such as Canadian Airlines, Pan American and TWA.


July 14, 2010
By James Careless

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The aviation industry devours companies new and old, from mom-and-pop operations to titans such as Canadian Airlines, Pan American and TWA. Yet Calgary’s AirSprint has prospered since being launched as Canada’s first fractional aircraft ownership company in 2000. Starting with two Pilatus PC-12 turboprops leased by AirSprint co-founder and Edmonton businessman Bob Maclean, Judson Macor has captained AirSprint to an owned fleet of 23 PC-12s and Cessna Citation XL/S business jets serving North America – and they’re still growing!

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AirSprint serves the North American market with a fleet of 23 PC-12s and Cessna Citation XL/S business jets. PHOTO: airsprint


 

So how did AirSprint convince customers to buy 1/8th fractions of an aircraft, plus pay ongoing fees to cover monthly aircraft management, “variable rate” costs (i.e., actual occupied seat time) and ancillary expenses (such as catering and flight phone usage)? The short answer is that even with these costs, fractional ownership provides customers with a convenience akin to owning and operating their own aircraft, but at a much lower price. However, the real answer goes much further than this, leading to AirSprint’s “six secrets of success.”

Secret number 1 | Find an unserved niche
While in law school, Judson Macor and friend Phil Dewsnap became obsessed with launching their own aerospace company. It took a lot of brainstorming before the pair realized that fractional aircraft ownership was an unserved market in Canada.

The reason fractional ownership hadn’t been tried here had a lot to do with Canadian culture: “In the States, people buy corporate aircraft to show off their success and to make a statement about themselves,” says Chris Richer, AirSprint’s president. “This is why fractional aircraft ownership caught on there. But Canadians are more conservative about success. That’s why so many businesspeople were reluctant to use private aircraft – even though such aircraft can really boost productivity by reducing time wasted travelling to airports, enduring security and then waiting for flights.”

AirSprint succeeded not just by identifying this niche, but also by convincing image-conscious Canadian businesspeople that fractional ownership made economic sense. The company’s logic was typically Canadian: fractional ownership gives you all the productivity gains of whole aircraft ownership, but at a lower cost. Thus, owning and using a fractional aircraft wasn’t a sign of vanity, but rather intelligent business thrift.

Secret number 2 | Use the right aircraft for the job
AirSprint’s business plan called for customers each to invest in a 1/8th share of a particular aircraft, in order to become eligible to use the company’s aviation services. It also promised to give customers leaving the company fair market value for their share, based on AirSprint’s success in selling their shares to someone else.

This is why Macor started with the Pilatus PC-12. Priced between $3 million and $4 million per aircraft, the PC-12 “delivers the best range, speed and ability to use short runways of any turbo-prop plane out there,” says Macor, AirSprint’s chairman and CEO. “Inside, it feels like a business jet.” Add the PC-12’s low maintenance requirements and excellent resale value – “the highest for its class,” Macor tells Wings – and the Pilatus PC-12 is a good investment for AirSprint and its fractional owners.

When AirSprint decided to add business jets in 2002, the company chose the Cessna Citation XL/S, which is “the most popular business jet worldwide in fractional ownership,” says Richer. Like the PC-12, the Citation XL/S gets top marks for performance, reliability and resale value, making it a smart investment for fractional owners.

Worth noting: AirSprint has standardized on the PC-12 and XL/s platforms. By doing so, “our pilots only have to focus on these two aircraft, rather than being current on a number of platforms,” Richer says. “This is also true for our mechanics – we have our own AMO – and the people who maintain our spare parts inventory. They are all masters of two aircraft, rather than jacks-of-all-trades of many.”

Secret number 3 | Hire the right people
“Our focus has always been to ‘put the right people in the right seats on the bus,’ ” says Macor. “In plain English, this means hiring people who are highly capable of doing their jobs in a way that is consistent with our values.”

At AirSprint, this process starts at the top. “Phil Dewsnap is a mastermind at flight operations, and is responsible for the professional flight department that exists today,” Macor says. “My talents lie with finances, marketing, customer service and sales, so that’s what I work on.”

Working down the ranks, AirSprint is careful to hire people who are not just capable of doing their jobs well, but are personally suited to doing so. “For instance, our pilots are much more than professional pilots; they are really customer service professionals,” Richer says. “They have to be: Our focus is on making our customers feel well cared for and personally known. So a pilot can’t just sit in the cockpit and look at the controls. He has to be comfortable with going into the cabin and taking care of his passengers.”

Secret number 4 | Offer great customer service
“Excellent customer service” is one of those standards companies often swear allegiance to in public, and ignore on the job. But at AirSprint, customer service is taken extremely seriously: from offering a 24/365 always-manned booking desk (staffed by actual company staff, not distant call centres) to providing cars to the airport and help with luggage, to delivering in-flight comfort, on-time arrivals and “standing by” return service.

“We are not an aviation company; we are a service company,” Macor declares. “People invest in us and stay with us because they appreciate the customer service we provide on a consistent basis. Ultimately, service is what convinces people to remain a customer, or to leave you for someone else. This includes the cleanliness and outward appearance of aircraft; the hotness of the catered food; the wine – everything!”

This commitment extends to keeping schedules: “We achieve dispatch availability 98 per cent of the time,” Judson Macor says. “By industry standards this is exceptional; after all, aircraft do break down. But our goal is to achieve 100 per cent, because that is what our customers are looking for. If this means we have to find another aircraft at the last minute, then we do it.”

Secret number 5 | Let success sell your service
Despite 10 years of success, AirSprint is not well known in Canada. This low profile is no accident: “We prefer to stay under the radar, allowing people to learn about us through referrals,” Richer says. “Our success at satisfying our current customers is the most powerful tool in winning new ones. Word-of-mouth has really driven our growth.”

Secret number 6 | Don’t get blinded by growth
Given AirSprint’s success, the company could be forgiven for emphasizing growth ahead of everything else. After all, its strategy has proven itself: Why not use it to get as big and profitable as fast as possible? The answer is that AirSprint’s prosperity is the result of staying customer-focused. To give this up in favour of aggressive growth would likely kill the goose that laid the golden egg – and put AirSprint at risk of failure, like so many other aviation companies before it.

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 AirSprint started out with two Pilatus PC-12s in 2000. PHOTO: airsprint


 

“We are growing modestly, but we are not focused on growth for growth’s sake,” Macor says. “In taking this course, we have weathered the recession. Sure, we are looking at introducing new programs such as a lower cost entry-level program to attract smaller business clients, and expanding into the U.S. as well, but our focus remains unchanged. Putting customers first has served AirSprint well during our first 10 years, and I expect it will continue to do so in the future.”