Despite Gloom Aviation Support Firms Find Soft Landings
By Jaime Levy
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Despite doom-and-gloom predictions that aviation-support companies would crash after Sept. 11, several now say they are sputtering but recovering.
In a Sept. 25 study by Enterprise Florida, 89% of Florida aviation companies reported "significant" to "devastating" impact from the sudden decrease in air travel after Sept. 11; 80% said they would lay off part of their workforces.
But since then a change in eligibility requirements for federal small business disaster loans allowing coverage for industry-wide disasters plus an improving passenger-travel sector are leading Greater Miami’s mom-and-pop air-service shops to say they are making do.
Business disaster loans were previously limited to geographic proximity to the disaster.
"The airlines have resumed paying their bills, and that was the biggest issue. The work is flowing as it was, though it’s not quite the same," said Andy Wahlquist, a representative from the now-dormant Coalition of Airline Providers, a group created in the aftermath of Sept. 11. "The members concerned about economic survivability seem to be surviving, but maybe at a reduced rate."
Several heads of local maintenance, repair and overhaul companies echoed Mr. Wahlquist’s account – by no means a pretty picture, but better than the one they might have painted last fall.
"We made a lot of adjustments," said Jose Bared, president of Air Operations International, which was established in 1969 and has 30 employees. "We basically saw early on, shifted our focus and got more aggressive. You have to go out and get work. You need to have capital behind you to continue to support your customer base. We’re holding off on collections – we’ve been there for (our customers), and that really helped."
At Avionics Support Group, an engineering company that deals primarily with commercial cargo and passenger carriers at Miami International Airport, the president is working with a financier to develop security measures for commercial carriers – a video surveillance system for the cabin with monitors in the cockpit. Although the company hasn’t started marketing the product, it is hoping it will help recover lost funds.
"A lot of business slowed down. Your own customers started paying late – 90 or 120 days. I had to put some of my people for a while at a 32-hour week," said President Hugo Fortes, who added that about 15 of the company’s contracted workers were laid off by their parent companies. "A lot of airplanes – they parked them. Everyone’s fleet was downsized. Luckily, we survived."
Even South Florida’s largest maintenance, repair and overhaul companies were scarred by Sept. 11 and the subsequent economic downturn, both of which slowed air travel dramatically. Avborne Heavy Maintenance, for example, cut 120 of its almost 550 employees between Sept. 11 and mid-November, according to an AFL-CIO count, and has since brought in a new CEO.
Also, Miramar-based Kellstrom Industries, which buys, refurbishes and resells or leases commercial jet engines, engine parts and aircraft, filed for Chapter 11 bankruptcy protection in February, when it also announced that it would be purchased by KIAC Inc., according to information on the firm’s website.
Some aviation support firms, however, are optimistic, hoping that if they made it this far, they will be fine in the long run.
Ross Bleustein, president of Miami’s Atlas Aerospace Accessories, said he is trying to look forward, not backward.
"After Sept. 11, we lost about 20%," Mr. Bleustein said of his 60-employee company. "Now through the first quarter, we’re still on pace with where I was last year. We’re running at the same clip. It’s not where I want to be, because it’s still down from where my peak was a couple of years ago.
"Basically, I’m hoping by the end of the summer to have things back on track and moving forward. Others are trying to keep their heads above water – they’re trying to pick up to before Sept. 11. I’m trying to get in the positive pattern."