Story ID: 
Portland FBOs thrive despite local economy
By: Kim Rosenlof
Caption: Due to challenges in the overall Northwest U.S.
Word Count: 1324
Due to challenges in the overall Northwest U.S. business sector, Portland, Ore.-area FBOs serving corporate aviation clients have structured their operations to attract clients from a greater radius. Competing with the Seattle market and incorporating global perspectives, the major corporate aviation FBOs have either recently undertaken or are planning to take bold steps to ensure their survival in a state that still measures one of the highest unemployment rates in the U.S. and a faltering economy. Portland is served by Portland International Airport (PDX), located on the southern shore of the Columbia River, and Portland-Hillsboro Airport (HIO), located 15 mi southwest of downtown. Two smaller airports, Troutdale Airport (TTD) and Mulino (4S9), receive some light jet and turboprop traffic, but are generally too far away from the city’s downtown and high-tech centers to be practical for corporate operators. Thus the only two real FBOs catering to corporate aviation–Flightcraft at PDX and Aero Air at HIO–have carved out individual niches and coexist well in an area seeing a depressed business aviation climate compared with a decade ago. A third FBO, Hillsboro Aviation, serves as the largest rotorcraft corporate charter provider in the area. It is ironic that the Portland FBO serving the small jet and turboprop segment of the corporate aviation market is based at the largest airport, while the FBO serving the larger jets is based at the smaller airport. Started in 1948, PDX-based Flightcraft caters mainly to King Air, Citation and Learjet operators, while 64-year-old Aero Air at HIO caters mostly to operators of Gulfstreams, Falcons and Hawkers. Both beat out competitors as the corporate aviation market followed the fortunes of the faltering lumber industry. “There used to be 15 to 20 forest product companies based in the Northwest, many of which used corporate aviation in their daily business operations,” said Phil Carrell, Flightcraft sales manager, who has been with the company for nearly 45 years. “Weyerhaeuser [headquartered near Tacoma, Wash.] was one of the pioneers of aviation up here, recognizing the benefits of business aircraft decades ago. But now, mostly due to mergers, we’re down to about five major lumber companies in the area and only one Fortune 500 company–Nike.”Fewer housing starts during the recent brief recession hit the lumber industry hard, reducing even further the number of corporate aviation flights into Portland by forest product companies. The solution for the state has been to entice high-tech companies to base part or all of their operations in Oregon. The area around HIO has turned into a high-tech office park, with companies such as Intel, Komatsu and NEC housed around its perimeter. Though this has helped stabilize the once lumber-dependent state’s economy, the movement of high-tech into the Portland area may not have brought about as big an increase in corporate aviation as the FBOs would have liked. “Hillsboro is the San Jose of the Portland area,” said Kevin McCullough, president and co-owner of Aero Air. “Even so, Aero Air’s business has not been influenced by the increase in high-tech companies in the area as high-tech customers make up only about 5 percent of our business.” One reason that the high-tech sector has not affected his business is that these companies own and operate their own aircraft. For instance, Intel has two Canadair Regional Jets outfitted as corporate shuttles, reducing its need for additional charter.The increase in high-tech companies around Hillsboro has affected the fortunes of Hillsboro Aviation, which professes to have the second-largest helicopter training school in the U.S. and the largest in the Western states. According to Max Lyons, Hillsboro Aviation owner and president, the company had been building a charter operation using a variety of aircraft from light piston twins up through a King Air 200 until last summer, when his company decided to pull out of the fixed-wing charter business to concentrate on helicopter trade.“A year ago we looked around and saw that we were competing with some very good operators, including Aero Air, Flightcraft and Premier Jets [a small jet charter operation at HIO],” said Lyons. “We decided not to compete in fixed-wing aircraft. They don’t compete in helicopters.”Although helicopter charter, using Bell 205s, JetRangers and LongRangers, makes up approximately 40 percent of Hillsboro Aviation’s business, Lyons said the effect of the high-tech industry’s encampment around the Hillsboro Airport has not been on the charter business but on his flight-training operations.A Global PerspectivePerhaps part of these companies’ long-term survival secret was the fact that none depended on the business based in and around Portland; instead, they were determined to draw business from out of the state and even outside the U.S. “We provide worldwide transportation,” said Aero Air’s McCullough. “Pick a country and we’ve probably been there sometime in the last year.” McCullough touts Aero Air as the “largest large-airplane operator in the Northwest.” His fleet, including one Gulfstream IV, two GII-SPs, two Falcon 50s, two Learjet 35s, one Falcon 10, an Astra and three Rockwell Turbo Commanders, allows the utmost in flexibility to flying charters as short as 150 mi to operations across the globe. “We’ve picked up hostages in Nicaragua, and had a recent flight to Easter Island to assist in a medical emergency.”McCullough said the most recent growth in corporate aviation in the Northwest U.S. has been in large aircraft charter, and he plans to add two GIIIs to his fleet within the next month. His new aircraft, however, will not be based at HIO, but will operate out of Aero Air’s satellite locations in Seattle, San Jose, Calif., and Southern California. He plans to use the Hillsboro facilities to expand the company’s maintenance operations by building a 33,000-sq-ft addition to the company’s current 80,000 sq ft of hangar and office space.While Aero Air concentrates on the larger jets, its competitor to the north has remained focused on turboprops and the smaller jet market, a dichotomy that seems to work well for the competitors. Flightcraft’s small-aircraft focus, including its charter fleet of two King Airs and a Hawker, stems from a 44-year relationship with Beech and later Raytheon Aircraft as a distributorship and authorized service center for its light twin, King Air and Beechjet lines until Beech closed its dealerships in the mid-1990s. Up until that time, Flightcraft had enjoyed a position as the exclusive Beechcraft dealer in the area. “Flightcraft had found that it was profitable to be in aircraft sales in the 1990s,” said Phil Botana, who took over as Flightcraft president in mid-May but already displays a keen understanding of the FBO’s history. “So when Beechcraft pulled its distributorships, Flightcraft teamed with Cessna, which put us into the jet market.” Just after Flightcraft became one of only five independent factory-authorized Cessna Citation Service Centers in the U.S. in 1994, Raytheon Aircraft promptly pulled its factory service center designation from the FBO. But according to Mitchell Berk, director of operations in Portland, this has not hurt Flightcraft’s King Air repair business.“Out of our $1.4 million in parts inventory, we have in excess of $100,000 in Beechcraft parts and more than $400,000 in Cessna parts,” Berk told AIN. Pointing out a customer’s King Air sitting among the Cessnas, Hawkers and Pipers in Flightcraft’s new 70,000-sq-ft maintenance hangar, he said many King Air customers continue to bring their aircraft to Flightcraft despite the factory’s authorization revocation. The new maintenance hangar houses a 33,600-sq-ft maintenance hangar, avionics shop, parts and component storage, library and non-destructive testing lab. Completed this past January, the hangar incorporates 12 pedestal power outlets to supply electric, data and telephone ports to technicians, each of whom can access all Cessna maintenance and service manuals online through portable terminals. Botana said, “Our old maintenance facilities were in a 40-year- old wood building. We knew that if we were to attract customers from a distance, we had to show our commitment to excellence.”