ExportWise is counting down our 10 best performing stories from 2016. This story, first published on April 13, is #7 on our list.
It can cost up to $300,000 a day for a commercial aircraft to be grounded. From the direct costs of rerouting passengers, to the indirect costs of a de-synchronized network, to the impacts on an airline’s brand when flights are delayed, this is a situation that airlines seek to avoid.
AirStart , an aviation company that leases and exchanges high value aircraft components, has developed an innovative formula to minimize this cost as much as possible.
In fact, this thriving company has been recognized for seizing a niche market and reducing flight delays, receiving one of Deloitte’s Best Managed Companies awards on March 9th, 2016. Canada’s Best Managed Companies is the country’s leading business awards program, recognizing excellence in Canadian owned and managed companies with revenues over $10 million.
Having a passion for what you do goes a long way
Robert Wills, President and Founder of AirStart, is an engineer by trade but a pilot at heart.
While his dream of becoming a pilot didn’t pan out, he didn’t give up on his love for aviation. Instead, he combined his passion and expertise to found AirStart in 2000. And it was successful from day one.
First year sales were at $16,000, and have doubled every year. Fifteen years later, AirStart now supports 75 airlines around the world and experienced a 63% growth in sales this year.
Wills’ management style has a lot to do with this success.
“I like to empower the team to run with the ball. I’ve always said that we should keep some eggs in the nest, and risk the rest of it,” says Wills. “I am not afraid of picking up the phone and calling 30 people in one day. Maybe five will be interested, and perhaps only two will pan out. Either way, I believe success comes by putting your neck out and trying.”
While taking risks is important, it also helps to have a promising product. Take AirStart’s Rapid Exchange (RX) program for example. It allows airlines to exchange damaged parts for replacement components within minutes, saving airlines the consequences of a grounded plane. After the component exchange, AirStart repairs the removed part and adds it back into their inventory. Airlines only pay for the repair, and AirStart’s inventory levels are maintained.
The company has warehouses in Toronto and New York, as well as forward stocking locations in different parts of the world where local airlines can draw from.
“It can happen that we get a request in an airport where we don’t have stock,” says Wills. “If we don’t have the parts, we can quickly procure them from one of our 300 plus trading partners. It happened in Guatemala and Russia for instance, where a component failed with passengers on board and we were able to provide a timely and cost efficient solution when no one else could.”
According to Wills, relationship building is the key aspect to the company’s business model.
“We work really hard on attending as many trade shows as possible to meet trading partners and competitors. It is crucial to have these international partners to increase our ability to respond quickly to orders, no matter where the request is coming from in the world.”
Export Development Canada (EDC) has been able to support the company’s growth by providing Accounts Receivable Insurance (ARI) since 2013. It was initially meant to insure a single business request for South African Airlines, but it quickly turned into insurance for all of AirStart’s international sales. But they are now ready to take it to the next step.
“So far, any success for our business has been organic. Investments were made through our own resources and we have no debt. But in order to grow significantly in this capital intensive industry, we need to get financing and investors. This will get us on the radar and help us to keep growing and be known internationally.”
But financing is not the only thing that will make a difference. Wills’ pride stemming from AirStart winning the Best Managed Company award can only help the company’s momentum.
“As someone who spent his childhood at the local airport filming planes and building airplane models, it’s amazing to get to Paris or London and be greeted by CEOs of top airlines and be regarded with that type of respect for the services we provide,” says Wills. “We are becoming a critical resource to the world’s best airlines, and I could not be prouder.”
Five questions with AirStart founder Robert Wills
1) What was your first export sale?
It was a business jet wheel that we sold to a company in Spain.
2) How did that first export opportunity arise?
This opportunity finally arose after cold calling airlines around the world.
3) When it comes to exports, what do you know now that you wish you knew then?
It’s one thing to receive a purchase order from an international customer; another to actually get paid!
4) How has the trading world changed since you started in business?
The trading world is nothing short of revolutionized. Access to information is instant compared to what it was in 2005 when a smartphone was an anomaly in this business. Deals are conducted in seconds, not in hours or days.
5) What is the #1 thing new SMEs need to know about export and trade?
International markets are fraught with trade risk. Many hesitate or resist expanding into emerging markets; but with North American opportunities tapped out and mature, international is the place to be. You just need to protect yourself from risk.