““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
BJT Mangement Series: A Conversation with Craig Sincock, CEO, Avfuel
Craig Sincock is the sole owner of Avfuel and has been CEO of the aviation fuel and services company since 1984. After graduating from the University of Michigan, he learned to fly and worked in the investment banking and consulting arena. One of his consulting clients was a regional aviation fuel supplier serving the Great Lakes Region named Avfuel Corporation. When the owner said he wished to sell the company, Sincock immediately offered to buy it.
I believed that business aviation was about to take off [when I bought the company]. I felt then what I still believe today: Aviation is an indispensable conduit between not just businesses and products but ideas and cultures. Even with the Internet’s unprecedented connectivity, aviation is the key to face-to-face interactions. That will never go away.
The price of jet fuel is related directly to the energy market--specifically crude oil. As crude oil goes up and down, so does jet fuel. I predict that over the next couple decades, energy prices will trend upward, with of course some up-and-down volatility on the way.
Your best source for fuel conservation is your flight department. I’m happy to report that the pilot community is a very responsible group that is knowledgeable about aircraft operation and optimization. They know best about how to file routing and obtain the right altitude to burn less fuel, and they know how to do it safely.
For fuel purchasing, a flight department must work directly with its local FBO to procure good rates at home. On a global or national scale, the flight department can partner with any of over 32 vendors who offer contract fuel [centralized buying]. There are many good ones among them, and our research shows that partnering with one to three of them can address fuel cost almost anywhere on the globe.
Our values are simple. We want to bring our business to all corners of the Earth yet maintain our commitment to personal service.
We look for bright people who share our enthusiasm for learning and the drive to be part of something successful. We work really hard and we try to work smart. We also look for people who are fun because if we are going to be here 10 to 12 hours a day, we’re going to make it fun. Avfuel conducts at least two panel interviews with potential employees: the technical side and the personality side. A committee made up of representatives from many departments meets the applicant to explore whether his/her character, energy level and dedication are a fit.
Building a successful corporation takes hard work and total flexibility. I coach my management staff to reassess itself without fear every six months. That means throwing out assumptions, reassessing core competencies and making smart decisions about when to take risks and when to be conservative.
It is critical that everyone has a voice in Avfuel because everyone can contribute a valuable piece of the puzzle. [People who are] brand new hires at our company bring with them ideas and qualities that may inspire the experienced team. At Avfuel, I strive to get both sides understanding the other. That’s how you know you have something that makes sense outside the conference room and in the real world.
Our incredible growth rate is a result of both internal growth and external acquisitions totaling 21 companies, four of which were NYSE spinoffs. You don’t achieve that level of growth and sustainability without a solid, creative team working for you--and we have fantastic people. We spend a lot of energy finding these people because we know that the influx of new talent and viewpoints can only strengthen the company.
Another reason why I believe we’ve been successful is we listen to the customer. Avfuel started by supplying fuel. But in speaking with our customers we discovered more needs and decided to offer not just fuel, but solutions. For example: our customers wanted more than an imprint credit card machine. So Avfuel was the first company to market electronic point-of-sale machines for the aviation fuel industry that collected detailed invoicing information. In the early 80s, pilots asked about frequent-flyer incentive programs, and we were the first company to offer that with AVTRIP. In the 90s, there was a shortage of workers’ compensation insurance in this business, so we formed Avsurance Corporation to supply aviation insurance. In recent years, our customers have asked for more services to go in tandem with their fuel arrangements--permits, weather reports, flight-following and more. In response we formed Avplan Trip Support. We now have a team of meteorologists and flight planners helping arrange flights everywhere from Prague to Peoria. In response to environmental concerns, Avfuel recently formed a company for the development of environmentally friendly fuel technology. As aircraft are being used more and going farther, Avfuel has also expanded our reach with locations all over Europe, Asia, North America and South America.
With regard to the aviation industry in the U.S., I am optimistic. The state of aviation reflects the economy and I believe it’s recovering. There will be some very modest growth in the U.S. and around the globe, but with volatility along the way. Despite the volatility, I predict that the net result will be a positive gain. The aviation industry will continue to fly higher and higher.