Jets satisfy schedules, bring returns
That’s why his Beloit-based ABC Supply has two corporate jets stationed at the Southern Wisconsin Regional Airport between Janesville and Beloit.
The Janesville-based Prent Corp. and the Beloit-based Regal-Beloit Corp. also hangar corporate planes at the airport.
ABC started with a Learjet 31, an eight-passenger jet with a cruising speed of 530 mph over 1,400 nautical miles.
Earlier this year, it bought a Bombardier Challenger 300, a 10-passenger super mid-size jet that can cover 3,500 nautical miles at a cruising speed of 541 mph. Depending on its specs, a new Challenger can cost between $15 million and $20 million.
When Hendricks’ companies aren’t using the jets, the Chicago-based Priester Aviation, one of the oldest and largest jet charter companies in the United States, leases them.
According to Priester’s Web site, the Challenger is available at an hourly rate of $4,500, while the Learjet can be chartered for $2,350.
Brent Fox, ABC’s vice president of merchandising and purchasing, said the company’s plane’s are chartered a couple of times a week on average.
Fox, who also is one of ABC’s pilots, said the charter flights offset ABC’s costs to a certain extent.But ABC—a wholesale distributor of roofing and siding materials, tools and supplies— isn’t getting rich on its charter flights, particularly on the Challenger.
“The asset is so expensive that you can’t charge enough or fly it enough to make the principle and interest payments,” he said.
Regal-Beloit, a manufacturer of electrical and mechanical motion control products, is in a similar position.
The company has owned and operated aircraft for more than 25 years and last year bought an eight-seat Raytheon Hawker 850XP that offers coast-to-coast performance with speeds in excess of 500 mph.
The plane is in the air between 400 and 450 hours a year, about 65 percent of which is for Regal-Beloit’s use. Companies in the Milwaukee and Chicago areas charter the remainder of the hours. Their employees travel a lot but not enough to justify the cost of a corporate plane.
“We use our charter center to balance out the peaks of our business,” said Mike Strader, who runs Regal-Beloit Flight Service. “We can’t look at the charter business as a profit center. For us, it’s a way to defray costs and be able to keep our numbers pretty low.”
Regal-Beloit serves a niche market that’s different from that targeted by airport neighbor SC Aviation, Strader said.
“SC says they have this big fleet, and if one airplane is unavailable, they can bring in another,” Strader said. “We have a select group of customers, and what we say to customers is that they’ll always have the same airplane, the same flight department of a Fortune 1000—hopefully soon to be a Fortune 500—company and they’ll always see the same two pilots.”
Strader said 9/11 was a catalyst for the charter industry. Companies, he said, started to take a closer look at security and convenience and began to attach specific monetary values to their employees.
Last week, Strader and his co-pilot flew three people to the Northwest in the Hawker 850XP, which was specifically designed for business use and features tools to make passengers’ time aboard as productive as possible.
“Flying commercially, that would have been a three-day trip, with two of those days being travel days,” Strader said.
“We fly out in the morning and come back at the end of the day.”
Each year, Strader must travel for training, and he does so commercially.
“In the last three years, I can’t say that those flights have gone particularly smoothly,” he said.
“Cancellations and delays are typical, and it’s not usually because of weather or air traffic control. It’s because of gate capacity issues at the airports.”
And that just adds to the growing consternation of business travelers who need to get places and do deals in a timely fashion.
While Regal-Beloit averages four passengers per flight, ABC Supply tries to fill up its Challenger with six to eight staffers, Hendricks said.
“Very seldom is it one or two people,” he said.
Corporate air travel, both in terms of time and money, is far more cost efficient than commercial travel, Hendricks said.
As an example, he offered this observation:
“You got 90 minutes to O’Hare, without traffic or accidents to hold you up. Then you’ve gotta park the car, which has a maximum of four people in it.
“You’re there an hour and one-half early because you’ve got to go through security, which could decide to keep some of the things you need for your meeting off the plane. Then the flight’s either canceled or delayed.
“Guess what, by this time you’ve missed the meeting; the people you were going to meet with have already made a decision, and you’re not part of it.
“It’s gotten to the point where I don’t know how any responsible business person can go commercial anymore unless he’s got all the time in the world.
“We don’t,” Hendricks said. “We’re a growing business, and we need to get things done.