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Expanding capabilities, expanding markets

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Expanding capabilities, expanding markets

Allen Weh, CEO of CSI Aviation, talks about adaptation and constant change. From the May 2013 Issue of PRESIDENT&CEO Magazine

Listen to the entire interview click here

PCEO:  So, tell me a little bit about CSI. 

Allen:  We’ve been around 30 plus years now.  I was engaged in some business activities in the late ‘70s, bouncing around, trying to find out what I wanted to do when I grew up,  and stumbled onto an opportunity where I was asked to help locate some airplanes.   Circumstantially, airline deregulation had just occurred, that was 1979.  As a consequence of that, I realized that there had been a major shift, at least in the United States air market.  At the time, and it still is, it’s a huge market, but airline deregulation had compelled air carriers who were now free without barrier of entry to enter any market, any city in the United States without having to go to the, what had been, the Civil Aeronautics Board, and ask, “Mother, may I?”  And then have to file a tariff and get the tariff approved for the market.  Now, they could charge whatever they wanted and they could fly wherever they wanted, as it should be.  But, in order to do that, they stripped the cupboards bare with all their spare airplanes.  What had been prior to deregulation a more structured airline industry that included charter departments and small charter fleets in every airline, they went into the cupboard and took those airplanes and threw them into scheduled service so that they could get a one-upmanship on their competitors getting into these various markets.      

So, for a period of two, three, four years after that, there was an absolute paucity of available aircraft for charter in the United States.  What I realized was that if we’re able to turn over enough rocks, so to speak, and find airplanes cleverly and then use those airplanes cleverly so that you could have multiple missions once you had an airplane, you could satisfy multiple customers with that resource.  So we started our company based on that requirement and that model.  We found airplanes where people didn’t think they existed.  We found them from little airplane companies, from little airlines, if you will, from chartered airlines.  We found them from air travel clubs.  They were more popular in those days than they are now but the fact of the matter is we found them. 

And when we found them, we found people who desperately needed airlift had been used to just simply picking up the phone and calling an airline, and it was a given that they had an airplane.  Well, we took advantage of an opportunity in the marketplace and we built our company.  But like any marketplace, things change, and sooner or later, the supply fleshed out to meet the demand.  Therefore, our uniqueness of finding airplanes under theoretical rocks ceased to be as advantageous as it was in those first few years.

But what we did is we acquired skills and knowledge, and understanding of other markets.  So, we grew our company by providing other services to other people for other things.  And we now do a multiple series of various service functions.  They cover the gamut from not only providing on-demand air charter for somebody to fly in as simple as an executive jet to, perhaps, as large as a wide body moving 300 people.  We’ve done that too. We’ve moved a band to a ballgame.  We’ve moved panda bears for zoos.  We’ve moved Indians out of South America to a location in Hawaii for a movie studio. 

“We’ve moved a band to a ballgame.  We’ve moved panda bears for zoos.  We’ve moved Indians out of South America to a location in Hawaii for a movie studio.”And we have moved equipment that had to be moved in cargo freighters to a place where it was absolutely needed to continue an assembly line.  And we’ve moved people in more sensitive situations.  We have emergency response contracts with several companies. 

We’ve pulled people out of dangerous situations in Africa.  We currently have several federal contracts in which we fly for the Department of Homeland Security and we move people out of the country.  And, often, we will move people in the country and, frequently, they will be in handcuffs.

So, we do a variety of things and we manage fuel.  We actually have a couple of fuel contracts now.  Based on our acquired knowledge and skills in managing our own fleet of leased aircraft, we have learned how to manage fuel effectively.  We hedge our fuel.  We handle airfield operations.  We handle contract maintenance.  We oversee regular, routine maintenance of our aircraft.  So, these are acquired skills.  So what we’ve turned around is, we’ve offered those services to smaller companies and smaller operators that don’t have either that knowledge or just want to outsource. 

PCEO:  It’s a very unique, very different kind of approach in that the mantra is always focus, focus, focus, focus, right?  Whereas, it appears to me that, and correct me if I’m wrong here, but I think you said, it’s sort of, “We have now developed a certain amount of competencies and we continue to do that.”  And each competency may apply to different verticals but, your key is to make sure that your competencies are, number one, competencies, and, number two, continue to grow.  And then you find markets for them as opposed to the other way around.  Is that reasonable, or am I getting that wrong?

Allen:  Well, I think you’ve said it in a way that is correct.  I would simply say that we’ve broadened our markets by expanding our services and those services have evolved out of our operational experience.

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