Marc Lyon likes to say that he's seen the world two or three times--'and other people have paid for it.'
Indeed, as a pilot and co-owner of Pittsfield-based Lyon Aviation, he has spent countless nights in Paris, London, Rome, and myriad other cities on both sides of the Atlantic. And he's done it on the dime of his clients, who range from hedge fund managers to rock stars; Hollywood icons to pro athletes.
He even scored a ticket to the final round of a Master's tournament that he flew some clients to.
This is the glamorous side of the charter aviation business, he said, or at least a part of it. Another part is getting to meet and often converse at length with some of the most recognizable people in the world. (Strict confidentiality policies kept him from dropping any names during his interview with BusinessWest, although there were some strong hints.)
But overall, this business isn't nearly as fun and glamorous as people might think, he continued, adding that the hours are long, the time away from home is taxing, the competition is intense, the capital requirements are considerable, and the profits don't come easy. But Lyon Aviation--a second-generation family business started in 1980 and now led by Marc; his mother, Shirley; his brother, Michael; his sister, Christine; and other family members--has certainly carved out a niche for itself in this sector, a piece of the pie it is intent on growing.
Launched with one single-engine Cessna, the charter operation was a part-time pursuit by Marc's father, Lynn, and later a large part of what's known as an EBO (fixed-based operator) business Lynn Lyon ran at Pittsfield Municipal Airport. Lyon grew on the strength of a relationship with the city's most famous corporate citizen, General Electric, which contracted the company to take executives, including long-time CEO Jack Welch, who started with the company in Pittsfield and worked there for many years, to the corporation's locations around the country.
But with GE's dramatic downsizing and near-exodus from Pittsfield--employment has gone from 15,000 at its height to a few hundred at present--Lyon Aviation had to essentially reinvent itself and cast a much wider net for clients.
To say that it has succeeded in this assignment would be an understatement Using the Internet to introduce itself to potential clients across the nation and around the globe, and building off solid word-of-mouth referrals, the company has enjoyed steady growth after navigating its way through the turbulence of the Great Recession, when corporations and individuals alike are looking to trim expenses.
Lyon now boasts 25 employees and annual sales around $20 million.
Along the way, it has steadily added to its fleet of planes. The hangars at the Pittsfield airport now house that original Cessna and a twin-engine model (used for training), a Piper Navajo, a six-seat Lear let, two eight-passenger Hawker 800s (the 'workhorses' of the stable), and the showhorse (although it logs considerable time in the air itself), a Gulfstream IV, or G4, as it's often called, which can seat 12, although it rarely does.
The G4 spends much of its time parked at airports across Europe and in the Caribbean, while ferrying business owners, entertainers, authors, hedge-fund managers, and sports stars, among other constituencies, to exotic locations, said Marc Lyons, who handles a good share of these assignments himself.
On this side of the Atlantic, the other planes in the fleet, and especially the Hawkers, are busy as well, he said, adding that the ongoing strategy is to keep them in the air and thus off the tarmac as much as possible. Indeed, the company has been working diligently on a strategy to incorporate what amounts to one-way trips into its log book.
Elaborating, Lyon said that, instead of flying a group to Aspen for a week and parking the plane at the nearby airport for that stretch, the company is trying to book some other business--perhaps hops to Las Vegas or the West Coast--before picking up the Aspen party for its trip back home.
The company's ongoing success, coupled with what Lyon described as a strong buyer's market for used jets, has the company looking to expand the fleet again, although such additions are expensive (the used G4 cost $15 million in 2002), and they must be carefully undertaken.
For this issue, BusinessWest takes a long look from the 30,000-foot level at a company that, when it comes to the business plan, certainly isn't winging it.
Time Flies
Lyon said he's been to most all of the recent Super Bowls. Well, sort of.
He's flown high-net-worth individuals to those contests--usually in the G4--and has spent a night or two on average in the host city or a nearby suburb, often watching the game on television in an airport terminal.
Having the New England Patriots make five trips to the big game in the past 15 years has certainly been good for business (although Lyon books flights regardless of the combatants), he said, adding that the most recent contest involving the Pats--2008, in Glendale, Ariz.--amounted to what he called a 'day trip,' and not necessarily by design.
'We flew down the morning of the game,' he explained. 'We had contingency plans to stay the night if they won [which they didn't], but no one was in a mood to do that, so we came back that night.'
Such flexibility is a big reason why charter aviation, despite its high cost (a round trip to Aspen might cost $35,000; Florida, $22,000), is extremely popular among those who can afford it, even in tough economic times. In short, he explained, charter aviation gets people to places they normally can't get to easily, like Aspen--either because of their remoteness or the fact that commercial airlines have limited schedules to such destinations--and adds several layers of convenience and privacy.
All this makes it ideal for business people, who often have several stops to make in a day or week and can't afford to lose invaluable time standing in lines at airport terminals.
'We can land anywhere there's a 4,000-foot runway,' he explained. 'And that means more than 5,000 places in the U.S. that we can operate in and out of. This makes it very convenient for the business person or the venture capitalist who has to visit five or six destinations in one day.'
Assignments such as these represent light years of growth and evolution from where this company started, said Lyon, adding that his father, a master electrician by trade and serial entrepreneur of sorts, had quite humble beginnings.
Indeed, in the early days, many assignments involved taking auto parts to customers in Eastern New York--and some bodies to funeral homes across the
Northeast.
'These are people who died here, and we'd be hired to bring the body back home; it was a little creepy,' said Lyon, who would often accompany his father on some of those latter missions when he was in grade school, helping to get the corpses, enclosed in body bags, in and out of the tiny plane. 'There was no room for a coffin in that plane.'
The fortunes of the company changed when GE became its biggest client, Lyon continued, adding that the work was steady and came in large volumes.
GE's dramatic downsizing and eventual departure from Pittsfield--one of its former divisions is now owned and operated by another corporation--took a huge toll on the company at the beginning. 'Those were nerve-wracking times,' said Lyon--but in the final analysis, it could be categorized as a blessing in deep disguise, because it forced those leading the venture to explore different markets and create the client-base diversity that fuels its success today.
Today, the company handles everything from taking wealthy individuals to vacation spots to handling what's known as corporate-overflow work, created when a company-owned jet is already committed, in the hangar for repairs, or both. Much of its core business comes from people who work, live, or own businesses in Boston or New York.
With this broader client base, the company has grown steadily, sales-wise and in the size of its fleet, adding the Hawkers in the late '90s and later the G4. The recession took the company down from the heights it enjoyed in 2007 and early 2008, said Lyon, adding that several sectors within the industry were impacted by cost-cutting.
'When the economy fell apart, the mid-sized airplanes (like the Hawkers) took a real hit, and not just
for us, but industry-wide,' he explained. 'The larger airplanes, the Gulfstream business to Europe, for example, didn't miss a beat, though. The ultra-high-net-worth individuals like the status of that airplane.'
Some business travel was curtailed or eliminated in favor of videoconferencing, he continued, and some high-end leisure travel was impacted as well, but Lyon bounced back nicely, recording its best year ever in 2010.
Soar Subject
Lyon told BusinessWest that the controversy that erupted when the CEOs of the Big 3 automakers took private jets to Washington to plead for government help back in the fall of 2008--they drove themselves in hybrids for the next round of meetings--certainly left a mark on the charter-aviation business, at least from a public-relations standpoint.
Indeed, many individuals, including public officials and image-conscious CEOs, don't like lots of publicity when it comes to this subject, he explained, adding this is just one of the reasons why his clients' identities remain confidential. But the speed and efficiency of charter service makes it a must for most all those who use it, albeit quietly in many cases, he said.
This popularity, coupled with misconceptions about how easy this industry is to operate within, have brought many new players to the field in recent years, said Lyon. Many are not around anymore, and are at least partially responsible for that strong buyer's market for used jets, he continued, adding that, from a Darwinian business perspective, in this industry, it's survival of the fittest, and those best able to not only attract clients but turn them into repeat customers.
'I've been around a long time, and I've seen a lot of newcomers,' he said. 'All they see are the big numbers. That's why so many come and go.'
Being innovative and thinking outside the box, or cockpit, as the case may be, also helps, he continued, adding that the company is making great strides with its efforts to keep planes in the air more and on the ground less through some price restructuring that has led to more of those one-way trips he mentioned.
'For example, if someone wanted to go to Aspen, previously, we would take them there and sit there and wait for them, and all the fees and expenses that were associated with us sitting and waiting, including minimum time on the airplane, would be factored into the cost,' he explained. 'Now, we've started a network of one-way flying, where we'll charge a group a little extra for the price to go out, but then we'll leave and go fly other trips and come back and pick that party up.
'We've networked a group of clients together so we can make that happen,' he continued, 'so clients don't have to pay the exorbitant fees, such as crew expenses, that come with having a plane sit at the airport, and it's made it very attractive.'
Diversity is another key to success, he told Business West, adding that, in addition to its charter work, Lyon is trying to expand into other areas, such as what's known as aircraft management--providing crews, maintenance, and logistical support for planes owned by other companies.
As for expansion of Lyon's own fleet, there are several factors that would influence that decision, he said, from the availability and price of capital--'a lot of banks shy away from airplanes; it's a very tough business'--to the price of aviation fuel and its prospects for the future.
'I'd love to add another Hawker, and you can get a nice one now for about $4 million,' he said. 'It's something we're looking at, and something we can take on, the way we're adding business.'
At the Tail End
N317MJ.
That's the tail number on the company's Gulfstream. If one plugs that sequence of letters and numbers in the search box on Google Images, 199 pictures of the jet appear.
Taken by what Marc Lyon described as 'birdwatchers, only these are airplanes,' they show the G4 in the air and on the tarmac at locations ranging from Zurich to Corfu; Paris to Palm Beach; Ostrava-Mosnov in the Czech Republic to Tennerife in the Canary Islands. The diversity of these destinations speaks to how well the company is doing when it comes to billable hours--and how much of the world Lyon and the other pilots are getting to see.
Again, that's the glamour part, and it's not all that glamorous. 'It's cool, but after a while, it's a job,' he said of the opportunity to spend a few days in Paris or London. 'The first day you're adjusting to the time change, especially for us, because we were up flying all night. And the second day, you're up at 2 a.m. ... I look forward to coming home.'
And when it comes to the MJ portion of the name, Lyon likes to think it stands for 'Mark's jet.' His brother, conversely, thinks it stands for 'Michael's jet.'
Either way--or both, as the case may be--it's the mark of a company where the expectations, and prospects for continued growth, are soaring. And in more ways than one.
