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Charles Molineaux

July 23, 2008

The expression is actually a nautical one, but Tom Marano finds it appropriate, and worth repeating, when appraising an aviation industry heading into ever more turbulent conditions: Batten down the hatches.

"We're going to have to scramble hard," he says, "to stay one step ahead of all the turmoil."

CEO of airline services contractor Air Serv, Marano sees his company's fortunes depending on the health of the two dozen airlines with which it works, but also envisions the health – perhaps even survival – of those airlines depending on Air Serv. 

In-flight Turbulence

Communications with his company's clients have left little doubt about the industry's painful state. "Today," Marano says, "what they're saying is, 'There's going to be capacity reduction, so batten down the hatches. There's going to be pressure on pricing, so batten down the hatches.' But at the same time, it may be the single biggest opportunity we've ever had."

Since its founding in 2002, Air Serv has enjoyed dramatic growth by providing airlines with baggage and cargo handling, ticket verification, shuttle transportation for passengers and crew, cleaning and wheelchair pushing. Working with such customers as United, Delta, American, Continental, US Airways, FedEx and UPS, the company has flourished as strapped airlines have sought greater efficiency by outsourcing the services Air Serv has stood ready to provide.

But in a field notoriously sensitive to economic hiccups and whose lifeblood - jet fuel -keeps getting more expensive, Marano observes rising levels of urgency in the quest for efficiency, as well as daunting phenomena threatening to wreak havoc.

"The economy is suffering more than anybody really wants to admit," he says. "The issues of [rising] unemployment, the credit crisis, the housing crisis and energy costs... it all leaves great pressure on the consumer for disposable income. People have no clear understanding of what they're going to have to spend. All of those issues, plus the costs going up for the airline business in fuel, make it a dramatically tough year for us."

But he believes Air Serv is poised to engage its strong suits: efficiency, streamlining and a focus on quality. As air travelers become increasingly numb to shoddy treatment once they set foot in the airport, Marano looks for chances to shine, perhaps surprise them, and save money, using techniques proven throughout the corporate world.

All About the Consumer

"The consumer now doesn't expect a lot when flying domestic," he says. "The consumer expects delays. We have to find a way, in what we can control in that experience, to make it more friendly. Take out time, make it consistent, and ensure the aircraft are cleaned to high standards so that the flight is more enjoyable. The airlines have to concentrate on the value and reliability they can deliver. We are trying to take waste out through process management, Six Sigma, eliminating waste and creating efficiencies."

Not that "efficiency" is a magic bullet of limitless effectiveness. Marano admits there's only so far that initiatives of tweaking and streamlining can go. "You can't stretch and diminish the product," he cautions.  Still, there are avenues which he says Air Serv excels that can make a world of difference, especially in profoundly lean times.

He points to the company's automated scheduling system that links airlines' load factors to staffing models to better allocate personnel. Air Serv also employs day-of-operations technology that uses a dispatch and locator to pinpoint where employees are in the airport.  That way, he says, workers can be routed most effectively and spend more time actually in the planes cleaning them, and more time actually assisting passengers, instead of hustling between point A and point B or, heaven forbid, idle.

It's a strategy Marano says his corporate clients have embraced, but as they continue losing altitude, most are nonetheless preparing for further cutbacks, including some that will affect Air Serv. "It's generally public knowledge," he says with a sigh. "They will be reducing the number of aircraft in the air. Twelve to 15 percent of their flight capacity is being changed and they have forecast back to us what that impact means. For us, it's clearly not in the range of 12 to 15 percent.  We'll probably see reductions for us in the one to three percent range of total revenues."

It's a forecast Marano is determined not to let sap Air Serv's growing strength. The company's 2008 fiscal year, which ended at the start of July, was its best ever. It's the 2009 fiscal year and beyond that worries him. 

"We will work our way through these challenges," he says. "We will create greater value for our clients. We will save them money. At the same time we'll protect our economic base, although it will be a much more challenging year. Because of the partners whom I work with, we expect success."

Charles Molineaux has written about local and national news for more than two decades. He has worked as a correspondent and anchor for CNN, CNN Headline News and CNN's financial network. Charles currently reports for WAGA-TV Fox 5 News in Atlanta, and is a regular contributor for Catalyst Magazine , Atlanta Woman and Business to Business magazine.

Image courtesy of © Alexey Buhantsoff | Dreamstime.com

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