““The charter industry needs to become much more efficient…We need to take a page from the airlines’ code-sharing agreements…Part 135 charter [operators] could review each other’s schedules, use each other’s airplanes.” ”
Industry Insider: Avjet CEO Marc Foulkrod
Aerospace engineer Marc Foulkrod had no intention of getting involved in marketing when he was tapped to help a fledgling aircraft charter/management firm called Avjet in 1981. After college, he served as a performance-engineering specialist for Boeing and McDonnell Douglas before joining cargo carrier Flying Tigers. While working at its Los Angeles office, Foulkrod sold a new Learjet. He was helping the owner find a charter/management provider when he encountered Avjet, which was launched in 1979 with a Westwind jet and two pilots.
Asked by Avjet to do some marketing work, Foulkrod initially declined. “It wasn’t my background,” he recalled recently. “I was an engineer.” But he ultimately agreed to work on a contractual basis, and his talents became apparent when he started pulling in significant money. The relationship with Avjet’s owner wasn’t working out, so Foulkrod and then-chief pilot John Messina offered to buy the company, each with a 50 percent share.
In 2004, Foulkrod bought out his partner. Now, as chairman and CEO, he owns 94 percent of Avjet, with the remainder held by president and COO Mark Lefever.
The company’s 40-plus fleet includes small jets, but the business has built its reputation on management and charter of large-cabin models, including the only Boeing BBJ on a Part 135 charter certificate. Headquartered at Burbank Airport in the heart of the Hollywood fame belt, Avjet has become the go-to charter provider for challenging trips. One such journey was former President Bill Clinton’s flight to North Korea in August 2009 to help secure the release of two imprisoned American journalists. Avjet had to obtain an exemption from special FAA regulations that prohibit flights to North Korea. “Beyond the honor of serving our country,” Foulkrod told me, “Avjet’s success in this mission helped restore some of the nation’s appreciation for the role that general aviation plays in a free, democratic society.”
Avjet flies to 168 countries on six continents and recently opened a ground-handling operation in South Korea, Avjet Asia, at Seoul’s Gimpo International Airport.
Another infrastructure investment four years ago was the opening of Hangar 25 at Burbank Airport, the world’s first LEED-platinum-certified private hangar. “It’s a beautiful building that’s achieving its energy-neutral objectives every day,” he said. “Some days it actually pumps electricity back into the Burbank power grid.”
What do you think makes Avjet special?
It is a boutique service. People like to know their pilots. They like to know the crew. They like to have a relationship with these people and a level of comfort.
So you don’t pursue jet cards or one-ways or consolidation with other operators?
This is a relationship-based business, with some of the top people in the world. Some of the schemes that you reference had the idea that they wanted to take management and roll it up like a Wall Street venture—take all of these little companies and make them into one. But the people that we’re dealing with don’t want Walmart-type management. [The aircraft owner] doesn’t want to call some customer rep; he wants a personal relationship. We have long relationships and the ability for those owners to call me personally whenever there’s an issue.
How does Avjet ensure quality with more than 40 aircraft based all over the world?
The crews come back here and work directly with senior management whenever possible, and we have the chief pilot fly with them. We try to make sure that they understand what we’re about and we get them indoctrinated into the policies. It takes a lot of work. You have to be talking to them almost on a daily basis.
Do you want to keep Avjet from growing too large?
I absolutely think you can get too big in this business. I don’t have any desire for Avjet to be monumental. I just want us to continue to provide the best customer service.
When TAG Aviation USA and others were being rolled up into a national company, were you approached?
We were. There are economic advantages to a huge operation because of the buying power, but I don’t necessarily think that it’s in the best interest of the customer if he wants to call up and speak to somebody that he knows and has a comfort level with.
Historically, these rollups don’t appear to be a viable business model.
That model has a great deal of intrinsic difficulties. And I think the longevity of my management group and the team atmosphere make all the difference in the world. I have people that have been with me for 25 years. They know how I think, they know the safety, the professional attitude, the resourcefulness and the customer service that make up who we are, and they’re very much a part of that philosophy.
How do you transfer that philosophy to a new employee?
They have to work with someone, on a mentoring basis. We try to bring them into staff meetings and they can see the philosophy of the company. We have outside consultants that we bring in for training on customer service, the Ritz-Carlton-type service programs.
How does your staff respond if a customer is unhappy?
They’ll come to me and say, “By the way, this client is disgruntled and these are the steps that I took.” That happened yesterday. And I was proud because they said, “Here’s the circumstance that took place, we were denied parking on this island, we had to move the airplane, there’s added cost to the owner. I’ve advised him, I provided backups and substantiation about why it took place, but he’s going to be disgruntled because the price went up and he may call you.”
Are any Gulfstream G650s joining your fleet?
We’ll end up with probably half a dozen. The first one comes this year, then two more in early 2014.
What are some of the challenges that face your business?
More regulation from Washington. The FAA just extended the comment period on the notice about OSHA applicability to flight crewmembers. That could be a nightmare from any operational standpoint. You have the ongoing grab by governments for more revenues. The state of California is absolutely against any business, so trying to do business in California is a feat. As a result, you see people moving their airplanes.
Government people tend to forget that money goes where it’s treated best. As soon as you make it punitive for people, they leave. We’ve had clients move their airplanes to Florida and say, “I got an automatic 15 percent raise.”
It’s going to get worse before the politicians realize less regulation is better for business. Quit trying to steal from people. They have this mentality that the wealthy can take care of themselves and if you have an airplane you’re ultra wealthy and you have no problems. When they see all the companies leave and they have a big problem, maybe they’ll realize.
Is it hard to sell charter these days?
Charter is strong. A lot of people want to use charter because they may have gotten rid of their airplane. Big public companies come under scrutiny if they own an airplane, so they sell the airplane and charter.
Does the huge number of aircraft available put pricing pressure on your charter product?
Avjet has done well in that regard because of the relationships we have. Most charter operators get most of their business from brokers. We’re the opposite. I’d say 90 or 95 percent of our charter comes directly from end-users. So we don’t feel that pressure of competing companies and the person that says, “I’ve got two airplanes. The boss says I’ve got to make them fly or I have to sell them.” And so they drop their price to do whatever they can. Because we have contracts and we negotiate them, we have a steady stream of income.
Is Avjet growing in other areas?
Avjet’s in another phase of growth that I didn’t anticipate. We’re the only ones with a BBJ on a 135 [certificate]. We bought it green and did the completion, so we got into the completion-management business. We are now in the process of completing four BBJs around the world. Plus, we’re doing a great deal of work in Africa.
And when you’re not busy running Avjet?
I have a ranch in Colorado. We go skiing and duck hunting and work on the ranch. It’s quite relaxing. My son and I do some off-road stuff with trucks. But flying around the world [for Avjet] is fun, too. I enjoy coming to work because I love what I do.
RÉSUMÉ: Marc Foulkrod
BORN: January 1955, in Minnesota
PROFESSION: Chairman and CEO, Avjet Corporation
TRANSPORTATION: Owns 1981 Westwind II, 1998 Hawker 800XP and 2007 Gulfstream G150
EDUCATION: Bachelor’s degree in aerospace engineering from California State Polytechnic University
PERSONAL: Married with two children. Lives in Moorpark, California, and Pagosa Springs, Colorado. Enjoys sport shooting, classic cars, radio-controlled aircraft and travel.
Matt Thurber welcomes comments and suggestions at firstname.lastname@example.org.