WATCHING THE SIGNALS

Over the last 18 months every one of us in this industry thought in terms of doomsday scenarios. It seemed our entire world as we knew it was crumbling. The industry seemed to stand still. Because aircraft transactions were down so were prebuys. Speaking of maintenance shops having fewer prebuys, they were also suffering from a marked decrease in aircraft utilization. If the fleet flew less, the proximity between maintenance events that were hour or cycle driven grew farther apart. The decrease in corporate utilization put less demand on the entire universal fleet. This lower demand trickled out to the supplemental providers. Charter hours over all dropped as did the hours put on the fractional fleet. Nothing seemed positive.

Today there is a renewed optimism about the recovery of our industry. Utilization seems to be inching back up. There is a slight buzz in the air. The buzz is the activity that follows a return to higher utilization. This blog piece is not going to be about any specific part of the recovery or what could make it more robust. This is more about how each of us should watch the return of business and capture even if slight at first the return of the activity. I do believe that when our market started to dive, most if not all of us where caught by surprise. We did not have any clue about how deep, how fast or how broad the market would unwind. By the way there where signals then about the demise, I am just not sure we were prepared to watch or understand them. How many of us said back then (2 years ago ), this can’t last forever. Just that utterance should have been enough to stop saying it and start acting on shoring up our reserves. Most did not. Let’s not get caught off guard with the signals of the recovery.

Here are a few signals to watch for and act on. If you are a charter operator and your fleet has dramatically shrunk due to aircraft being sold and not replaced, start to cautiously add planes back. If you are a maintenance company, start to make the calls again to the owners and operators. Even start calling the brokers, remind them you are open for business. If you are a paint and interior shop start to notice what I believe will be a trend with respect to typical fleet transition timing. Many people who had for years traded for new aircraft every 5 years may now be switching from that policy to a more as needed basis. This longer period between trades may increase the frequency of a paint and interior shop visit. Bottom line…time to come back from the brink.  It is time to pull out of the doomsday planning and plan for and be an active part of the recovery. See you on the other side!

Tags: Recovery, Utilization