In my previous blog post, I reflected on one of the two major issues that lead to the decision to sell my aviation company. Having covered the extended closure of the main runway at the McMinnville Municipal Airport as the first factor, now I’ll touch on the other… maintenance on a major piece of equipment.
One of the most challenging issues working in aviation is the enormous amount of capital needed to start and run your business. Whether you are leasing or owning the equipment, aircraft that meet the more stringent maintenance requirements for commercial applications are quite an investment. Most maintenance follows a strict schedule established by aircraft manufacturers, regulators, and company policy so that the majority of maintenance issues are found upon inspection, not in flight.
The challenge then becomes timing of major maintenance with the ebb and flow of the seasons, mandated intervals, and the maintenance provider’s workload. We had been planning to have the helicopter in for overhaul for two years. We carefully priced and promoted services to ensure that we got the most money out of the helicopter before it went in for overhaul. Our pilot landed the helicopter on the maintenance ramp the moment it was due for maintenance, without a minute to spare. Every moment paid for.
I spent six months securing the funds for this overhaul and we did everything we could to ensure the maintenance shop would have what they needed to keep to the 3 month timeline. While we pursued leasing options for a replacement helicopter, the rates these leasing companies wanted meant we would need to practically double the price to our customers which didn’t make sense in the current, more competitive market. So we cut the helicopter program for the summer. Not a big deal, once the runway reopened in 3 months we’d be generating enough revenue and the helicopter would be back shortly after securing our position.
It took 6 months (instead of 3) for the helicopter overhaul, and while the revenue from the helicopter operations represented less than 25% of our total revenue, the cash generated from it’s operations might have bought us some time… if the runway project had an end in sight.