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Economic Challenges: Coping with aviation industry cycles

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I asked [Steve Moyer] how everyone from Skyway was doing after the layoff. Most of the 25 Skyway mechanics have positions that are as good, if not in some ways better than, their old positions. [Steve Llewellyn] relocated to Minneapolis and is now the technical operations trainer with Compass Airlines. Moyer is still in Milwaukee and is the director of maintenance for Air Cargo Carriers. His new office is two hangars down the ramp from his old Skyway address.

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									     Lessons Learned




                           Economic Challenges:
                           Coping with aviation industry cycles


                           U
                                     nless you have been hiding under                that the forecasts range from significant rev-
                                     a rock, it is obvious that the avia-            enue loss to contraction and restructuring.
                                     tion industry, like so many others,
                           is experiencing a “perfect storm” brought                 Lions, tigers, and bears
                           on by the combination of rollercoaster fuel                   It is safe to note that “change and churn”
                           prices, the sub-prime market meltdown,                    is the nature of our industry. This is not to
                           and subsequent credit crunch. It appears                  make light of the current economic situation,
     By Charles Chandler
                           that the weather is always threatening to be              as these times are scary and challenging for
                           stormy for the aviation industry.                         both the new hire and the ready-to-retire
                              The dramatic economic meltdown in                      grey beards. However, these types of indus-
                           the financial and housing markets in the                  try cycles always bring many opportunities
                           United States and other global economies                  as well as challenges.
                           has made a major impact in the market for                     In the August 2008 edition of AMT, Bill
                           aerospace products and services, affecting                O’Brien wrote a poignant letter to high
                           all segments of our industry. It appears that             school seniors about choosing a career in
                           throughout 2009, and possibly beyond, the                 aviation maintenance. In that article Bill
                           major airlines and the associated regional                stated that one thing that he had learned
                           airlines will continue reducing capacity due              in his 45-year career was that “for better or
                           to the global economic recession and the                  worse aviation is joined at the hip to the
                           continued weakening demand for air travel.                world’s economies” and that we need to
                           As a result, the airlines are closely inspect-            prepare for and weather these cycles, which
                           ing all the links in their value chains for               is part of being a contributing member of
                           ways to reduce cost of operations. As tends               the free market economy.
                           to happen, these cost-cutting measures will
                           start to travel upstream to large and small               The Skyway Airlines story
                           service providers.                                           Skyway Airlines provides an example
                              Across almost every segment, there is                  of how the industry can prevail in the face
                           agreement that it appears the shakeout in                 of adversity. Skyway began flight opera-
                           the aviation industry is accelerating and                 tions in the spring of 1989 as a division of

56   March 2009    Aircraft Maintenance Technology • www.AMTonline.com • www.AMTSociety.org
                                                                                              Lessons Learned

Phoenix, AZ-based Mesa Air Group. Mesa’s Skyway                  Both Steve Moyer (director of maintenance opera-
Airlines division operated Beechcraft 1900 Cs and            tions) and Steve Llewellyn (maintenance training
provided service to customers at Midwest Express             manager) felt all the pieces were now in place for sta-
Airlines in Milwaukee as well as in Rockford, IL.            bility and then growth when the economy improved.
    In 1994 Midwest Express purchased the Skyway             TPG Capital and Northwest Airlines were seen as
division from Mesa. It reincorporated the airline            the White Knights that had ridden in to save the day.
as Astral Aviation Inc., doing business as Skyway            TPG Capital had the reputation of buying companies,
Airlines. (Astral) Skyway was a wholly owned sub-            making changes, and then returning them 
								
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