Aviation sector can learn from mistakes of the music industryPosted: March 1, 2014
Cardiff Aviation’s CEO Mario Fulgoni upbeat on prospects for the St Athan-based business
Cardiff Aviation is an example of a company that has learned from the wider mistakes of the sector just as music businesses were forced to do with the advent of the internet, its joint chief executive told a business audience today.
Speaking at the ACCA’s St David’s Day breakfast at Cardiff’s Hilton Hotel, Mario Fulgoni said that St Athan-based Cardiff Aviation was conceived as something far more than an aircraft maintenance business.
The company was set up by Mr Fulgoni and Bruce Dickinson (joint CEO), the vocalist with rock band Iron Maiden, in 2012.
Mr Fulgoni said: “It’s designed to be an all encompassing aviation company that centres itself on maintenance. Apart from this it offers training to pilots, engineers and support for airlines.”
Having posed the question why the industry must change, Mr Fulgoni said: “My partner Bruce Dickinson draws a comparison with what happened to the music industry of which he was a part, following the growth of the internet.
“Record companies were selling albums to their customers while the internet was selling music to the masses, leaving music companies wondering what had happened.
“What they didn’t do was watch for the change in the industry. A business must focus on its productivity, but it must also look around and see the wind of change.”
Another example of change Mr Fulgoni pointed to was the impact of low cost airline carriers and the difference that deregulation of airspace around Europe had made.
This, he explained, had allowed new airlines into the market and in the process changed the basis of how seats were sold. In turn this led to the public being able to buy a cheap air ticket six months in advance for £10.
He said: “All this happened while the major carriers were focusing on their core business, keeping the cost down and giving the same service which they had done for years. Again the industry changed and they weren’t watching for it.”
Turning to his own role as a CEO of Astraeus Airlines Mr Fulgoni said this had been mainly concerned with selling charters to the holiday industry.
“In summer doing this was no problem but the business was really about the winters and what you did with the aircraft in the winter,” he explained.
“The answer was not enough, so what we tried to do was find routes and markets for our aircraft. I went out to Asia and found winter routes in Asia where their peak season is also winter. We spent a lot of time solving the various logistical issues that arose.”
In 2008, he said, aircraft values had fallen through the floor as a result of the economic crisis and this meant that leasing companies ended up with their assets parked in the Arizona desert.
“Many of you here may not know that most of the aircraft flying today are not owned by the airlines. They are owned by the big leasing companies who own more than 5,000 aircraft and more parked in the desert.
“So what we saw in 2009-10 was a market in Asia and also in East Africa which required the capacity of those aircraft in the desert. Maybe the answer was to put these things together and to solve the problems you have in connecting those two ends and put the planes into service where they are needed.”
He added: “What we decided to do was control the whole process and persuade these big institutions to give us their assets so we could get back into the air.”
This, Mr Fulgoni said, was what Cardiff Aviation was about and with the support of the Welsh Government why it was established in Wales.
He added: “Nobody puts the entire aviation package together except us.”
Last summer Cardiff Aviation announced that it had secured investment of £5m, including £1.5m from Finance Wales.
It said it planned to target commercial airlines looking to outsource fleet maintenance in a European market worth £1.2bn and growing at around 3% a year.
The company also last year acquired a flight training centre in Bournemouth from the European Aviation Group with plans to relocate it to St Athan.
The centre is a Civil Aviation Authority (CAA) approved training organisation and can perform for Boeing 747 aircraft types, approved by the CAA and international authorities.
The annual ACCA St David’s Day breakfast was sponsored by investment management and financial planning firm Brewin Dolphin.
Sourced from Walesonline