For most ordinary people, the biggest purchase they will make in their lives is the house they live in. Evaluating a piece of real estate can be a complex process, as can complying with the regulatory aspects of property ownership. But these burdens pale in insignificance when it comes to acquiring a business airplane. The task of evaluating, acquiring and bringing into service the airplanes that comprise the Mountain Aviation fleet falls to Julian Tonsmeire, Vice President, Business Development. We caught up with Julian for a chat about the path that led to him holding his present position at Mountain Aviation, about the challenges he faces now, and those he sees over the horizon.
ST – So Julian, give us a brief sketch of your life “before Mountain Aviation”.
JT – Well, growing up in Juneau, Alaska, I got to see a lot of bush aviation – enough to whet my appetite, but also enough to convince me that bush piloting wasn’t for me – I wound up knowing a lot of dead bush pilots, and didn’t want to follow their example!
I went to college in Colorado, and then joined the adventure travel industry. After a few years, one of my clients, a UPS 757 captain, really convinced me to change paths and become a pilot. My apprenticeship followed entirely conventional lines – single engine commercial rating, leading, via some instructing, to a multi-engined rating. Finally I spent some time flying Beech 1900s for a regional operator.
ST – So was flying by then a passion for you?
JT – I was always fond of flying. While I first found myself in the Client Services Group / Operations here at Mountain Aviation, due to my skills set and background I transitioned to the Business Development and Leadership role of today.
ST – tell me about that Group.
JT – Well, first you need to understand our business model here at Mountain Aviation. 30 years ago, charter operators operated aircraft that were typically owned by the operator itself. They would acquire a bunch of airplanes and then set about trying to make money with them. That proved harder and harder, and, in the ‘90s recession hit the industry hard. That’s when Mountain Aviation was founded, and we pioneered a new business model, based on operating aircraft owned by third parties, and the aircraft for charter when the Owners were not using them. It was a win-win for both the operator and the owner. But of course it placed the task of acquiring airframes front and center in our business!
The Client Service Group – CSG- is really our nerve center here at Mountain Aviation. Essentially anything that happens at Mountain Aviation has to go through CSG at one point or another – they are the hub – including Client and Guest interaction, maintenance and crew scheduling, accounting, weather and ATC interface, and Aircraft Owner interaction, etc. It is with this operational background that I gained my experience and insights into what would become my next chapter at Mountain Aviation – Business Development, heading up our Acquisition and Management programs.
ST – so does that mean you act as an airplane brokerage?
JT – Superficially, yes, but there are some important differences. Firstly, while not exclusively, most of the time we will be operating the airplanes we acquire. We do consult and actively acquire aviation assets for partners that will be operating them on their own, but most of the time the prospective Aircraft Owners come to realize that they want to have us manage the asset after the acquisition itself. So it’s very clearly in our interest, to the seller, ourselves, as well as the prospective Aircraft Owner – our business partner – to help select types and airframes that will deliver what the owners want from them. If I’m the guy that has to make the call to tell an owner he needs to spend $90,000 on a new windshield, or that the nearest airfield to a destination he needs to go to is too short for the airplane we’ve acquired for him, it’s in my interests to make sure that happens as infrequently as possible. So our interests are much more clearly aligned with those of the owner. Then again, we don’t work on commission. We acquire airplanes on a fee-for-service basis, so all costs and charges are entirely visible.
MA – so what should a prospective owner be looking for in an advisor to help them acquire an airplane?
ST – Well, nobody wants simply to own an airplane – they acquire an airplane to operate it – to go places in it – as part of their business model & success, as part of their business and personal life-definition. Not necessarily lifestyle, but they have determined that travel, safe, efficient, personalized travel, is part of what they need in their lives. What helps us help them in the way we do is that we are operators! We have the safety management systems, the operational expertise, the maintenance experience and the salaried pilots, that an owner is looking for in that respect. Of course if we wind up operating the very airplane we are helping the owner to acquire, the needs assessment we conduct will be thorough and accurate. Secondly; when a broker selects an airplane, he will typically hire a surveyor to provide an ad hoc survey. We don’t need to do that – we have our own team of licensed mechanics, on our payroll, who are going to have to care for the airplane once it’s acquired. So owners can have great confidence in our appraisal – our interests are very clearly aligned with their own.
ST – What challenges have you seen during your time?
JT – Well, back in 2006, the economy was healthy, and charter sales were robust. Then the Global Financial Crisis struck, and we were in much leaner times. Thanks to the excellence of our business model, our conservative and solid business principles, and mainly of our team, we came out of it in better shape than many.
ST – so are there any major challenges you see looming over the horizon, so far as airplane acquisition and ownership are concerned?
JT – I think the major task we face will be responding to changes in the regulations. The regulatory environment, as with many other industries, continues to become increasingly complicated. It brings our value proposition of our aircraft management into greater visibility, but it does make aviation asset ownership a more intentional endeavour.
An example is of the regulatory environment changing is the governing of air traffic control.
ST – tell us more about that.
JT – well, traditionally, air traffic control and reporting has been accomplished essentially by voice; pilots and controllers talking to one another over the radio. That’s all going to change, starting next year, when Europe will be mandating the installation and use of automated, satellite-based reporting and control systems. The US will follow suit soon after that. What that means is that airplanes will need to have equipment which constantly ‘talks’ to the satellites and automatically reports its flight data both to the crew and to the traffic controllers. That will be an expensive retrofit, and for many older airframes it’s not going to be economically viable. So I expect to see a spike in airframe retirements and ownership turnovers, as well as our maintenance team undertaking equipment retrofits.
Another major challenge is the Pilot Shortage that has been discussed for years is finally here. It’s all demographics, as they say. The Vietnam-War era pilot boom that has carried the aviation industry – airline to private aviation – has finally come to full maturity. The FAA extended mandatory retirement for the airlines a few years ago but that generation of pilots is now reaching the inevitable point of needing to retire. This faces a huge challenge for all of us in aviation of any type, and in fact is hitting many different aspects beyond just the pilot ranks – the engineers of new planes, the maintenance techs, the air traffic controllers, the business leadership roles. Mountain Aviation is taking steps to give back to the industry and to be proactive on our own with our internship program. We take highly qualified candidates and take them under our wing, train them, bring them up, train them in our safety culture, our service culture, and build them into Mountain Aviators that will eventually sit right seat (co-pilot) and then eventually into full Captains. It’s a long-term project but lets us proactively select the highly qualified team members that we want to become Mountain Aviators.
ST – finally, what about the internet? To what extent has the revolution in internet communication affected the demand for business travel?
JT –In some ways it has affected it tremendously and in other ways not nearly as much as you might have thought!
Like many industries, the internet has allowed the consumers to become much more knowledgeable and self-educated about options. We are now working with a user that is much more aware of their own needs and available options. It’s exciting to jump right into a conversation with someone new that used to take days, weeks, or months to get them educated as much as they might be now.
The internet has changed the marketplace too. It used to be a few searches here and there. In fact we still had the phone book listings be quite useful for us up until just a few years ago. Typically our prime users have been a bit older. What that means is that as the internet was new and still growing, more traditional means of marketing worked – phone book, ads, etc. The internet has evolved at about the same rate as much of our Client population has turned over to the next generation – the same ones that are now needing private aviation have learned to integrate the internet into their lives in every way. What this means is that we now see a very large portion of business come from internet searches and a large remainder come from word of mouth and friend referrals. It’s been a great transition for us and great for us to be a part of.
That all said, we provide a service and provide a solution to a problem where the internet simply doesn’t provide an alternative – real world meeting with real people. We continue to see the need for executives, team members, doctors and patients, clients and providers, organizations, families, to meet in the flesh, person to person. In fact we believe in the same principle and it’s therefore easy for us to get excited about – Presence Matters – and we believe it always will. We help people get to places they need to be and to meet the people they need to meet at the locations where their business is done. At a certain level in the business world, “presence matters” – and I believe it always will.