I spent some time with Joel Truog, director of operations, to discuss his view of the general aviation business. According to AirNav.com, Hanover Field (KOFP) has 85 aircraft based on the field and averages 163 sorties per day. I trust you will find his candid perspective of managing a GA business insightful.
Aviation Digest: Joel, let’s start by understanding how you became involved in GA.
Joel Truog: Actually, I was afraid to fly until about age 12. A big influence was my Aunt and Uncle. They worked Air Traffic Control for about 16 years, 4 years in the airline industry and currently manage Linder Field down in Lakeland, Florida. It was their love of flying that exposed me to Oshkosh at a young age, getting my license when I was 15 and then to college with a major in Aviation Science. That’s when I knew I wanted to be a manager in the flying business.
AD: So, is that what brought you to Hanover?
JT: It’s interesting how things fall into place. I really don’t have much knowledge of Hanover operations prior to Heart of Virginia Aviation purchasing the Lease Hold interest in early 2004. Tommy and Kim Grimes recognized the opportunity of a 5400′ runway located on premium property. It’s really about a vision of growth and knowing what is possible. It hasn’t come easy. I’m actually the third manager since they became majority owners. You could say Tommy is grooming me for this position. He is one of the most knowledgeable business minds in Virginia aviation. It is great to have him as a mentor.
AD: Joel, what are your primary revenue drivers?
JT: You talking gross sales or profit?
AD: Both actually.
JT: OK, in terms of gross revenue, we are heavily skewed toward fuel sales. The other two money makers are the flight school operation and maintenance. Unfortunately, the profit is not aligned with the volume. Our flight school is the most profitable of the three. We are working to shift the mix of the business to the more profitable categories while growing sales.
AD: How about the other side of the equation, what are the largest expenses?
JT: Well, as I alluded to in my comment about volume and profit, cost of fuel is high. I think it cost us more than we make to drive the fuel truck down the far side of the ramp to give a customer 5 gallons of 100LL. Additionally, insurance is a big expense for us.
AD: How many are on the payroll?
JT: Approximately 30. We have 2 salaried employees, 7 full timers and about 20 part time workers.
AD: What are your typical work hours?
JT:(laughing) I’m 24/7. My phone is always on! I am usually here at the airport 8am to 6pm Monday through Friday.
AD: So, we talked about the current business a little bit, what growth options are you pursuing?
JT: The pillars of a successful airport operation are fuel sales and charter. We are just entering a growth phase that really excites me. (Digging drawings from a filing cabinet) We are starting a 3 phased renovation project that will bring more hangar space, larger maintenance shop and a newly remodeled terminal. In about 6 months everything is scheduled to be complete. The new larger hangars will command a higher rent and fuel sales will increase from both our base customers and transient traffic.
AD: Did I just hear you say my rent is going up?
JT: That reaction is what amazes me about the aviation business. Somehow a precedent of “Half Price” has been set. You get 1500 square feet for a fraction of what you would pay to cram excess junk into a shed down the road at Joe’s Storage Facility. We charge $35 for an hour of flight instruction while yoga instructors are turning away customers at $70 per hour. Our $65 rate for maintenance is below what the local car dealership is charging. The value is there, and so is upside on the rates. We are shifting our focus to the customer experience. You can’t get caught in the middle. Think back to all the FBOs you have visited. Only the really good ones and really bad ones stick out. That is why we offer our customers a Mercedes as the crew car to the local greasy spoon. My belief is that if we can deliver a consistent exceptional customer experience, price will not be such a sensitive subject with my breakfast club members.
AD: And the charter?
JT: Oh yeah, we’ve always had a charter model as part of our original growth plan. Not many people realize Hanover is 500 nm from 50% of the nation’s population. This field is well positioned to serve the business customers that are fed up with commercial air shenanigans. Currently we only have a single pilot 135 certificate that will expand soon to a basic 135 operator ticket. We are very optimistic about the growth potential with the charter business. You can just feel the pent up demand ready to explode.
AD: I can sense you are passionate about the future. What is the most rewarding aspect of your job?
JT: Obviously the project work we are starting is exciting. We have been pushing papers getting ready for this and now it is finally here. On a daily basis I would have to say that it is balancing the customer and employee requirements. Finding those win-win opportunities are not always easy but very gratifying for me. We are at a fork in the road. We can build a business on exceptional customer service which will establish us on the map. Or we can remain a more humble operation that stalls. In years past we have struggled in the maintenance arena. With the recent addition of Jim Parkman to lead the mechanics, we have top-notch talent turning wrenches.
AD: What frustrates you?
JT: It is challenging to make everyone happy at times. But, I think the harder piece is dealing with the variables I can’t control. This weekend, for example, we had a strong September and tracking ahead of budget the first week of October. Then the rain hit us hard and we will spend the rest of the month playing catch-up. Bureaucracy is hard to deal with as well. We are fortunate to have a great relationship with the county, it just seems to be a never ending battle to secure funding, appease environmentalist, and fill out paperwork in triplicate.
AD: So having said all that, where do you see the trends in GA (General Aviation)?
JT: Business travelers are ripe for converting to GA. Once enough understand there is an easier and more productive way to travel, there will be a tipping point. GA will benefit from the barrage of VLJ messaging and create awareness to a customer base that has not given us serious consideration. We see that happening in 2-3 years and want to be positioned to capitalize on this new growth. Whether VLJ succeeds is not as important as demystifying GA to the average Joe.
