Air Show, Short on Cash, Still Expected to Get Off the Ground
Air/Space America organizers, forced to scale back their proposed air show for lack of money, insist they will get the 10-day exposition at Brown Field on Otay Mesa off the ground this May.
Bill Walsh, a retired rear admiral who is president of the group, said the $800,000 collected so far--though far short of the $9 million first budgeted for the first show--is enough to make the initial payments to put on the trade show in 1988.
“We certainly need more money,” Walsh said, “but we can pull off the show right now.”
Despite the assurances, some observers remain skeptical that air show promoters Walsh and former U.S. Rep. Bob Wilson, the event’s founder and chairman, can launch the event without significantly more cash in hand to finance the huge initial costs of the inaugural event. After three years, the pair is still far short of fund-raising goals.
Patterned After Paris Show
Walsh and Wilson say they are patterning the San Diego show after the Paris Air Show, the premier international aerospace exhibition, held in odd-numbered years.
The heart of the San Diego show will be a business-only trade exhibit for aviation and aerospace products during the week of May 16. During the weekends at the beginning and end of the trade show week, the public will be offered a chance to tour the hardware and watch aviation-related events.
Show organizers estimate that it will cost between $4 million and $5 million to stage the show--down from $9 million projected in earlier plans--and that they have estimated $6 million in income.
They hope to attract up to 500 exhibitors, paying a total of $2.7 million in rental fees for exhibit space, and at least 160,000 spectators on the weekends, who would contribute another $1.4 million in admissions. The balance of the $6 million is to come from food and beverage sales, corporate sponsorships and contributions from the aerospace industry.
Air/Space America promoters have tried to capitalize on San Diego’s Pacific Rim location by making a special effort to attract exhibitors and buyers from the Far East. A marketing team already has toured Japan and Korea, and a team to be headed by former astronaut Wally Schirra, a member of Air/Space America’s advisory council, will meet with exhibitors at the Singapore air show later this month to try to build interest in the San Diego show.
Perhaps the strongest support for the show so far has come from the Santa Clara-based American Electronics Assn., which has among its membership many smaller firms that cannot justify the cost of taking their wares to Europe.
“With Air/Space America right here in our own back yard, we have the advantage of language, availability of technical staff and facilities for tours at probably one-half the cost,’ explained Chuck Jungi, the AEA’s coordinator for the air show.
About 75 AEA members have agreed to exhibit at the air show, comprising one-third of the exhibitors that have signed up so far. Jungi said the AEA has marketed the show among its members for Air/Space America on a commission basis.
“We spent money up front to make the marketing plan work, but by the end of the show, we should get reimbursed,” Jungi explained.
The organizers had hoped to raise $3.5 million in industry contributions, to provide the financial base to launch the first show. But contributions so far have totaled only $800,000, including five contributions of $100,000 each from major firms and 12 contributions of $25,000 each from smaller firms and individuals.
Scaled Back
With the finances of the show balanced so precariously, Air/Space America organizers have scaled back, forgoing such planned improvements as permanent exhibit halls and landscaping at the barren, 130-acre site at Brown Field that is being rented from San Diego.
After organizers asked for help, the city agreed to reduce the property rent--to $100,000, from an original estimate of $400,000--and waive $17,000 in initial fees and bonds.
However, the City Council declined to put up $300,000 to subsidize the event, and a plan fell through to help finance the show with city-issued, tax-free industrial development bonds because Air/Space America was unable to get the necessary credit, said Walsh, which would guarantee the city that the bonds would be paid.
Inevitably, the San Diego show will be compared to the Paris Air Show, which attracted more than 1,000 exhibitors and about 800,000 viewers in 1987.
So far, Air/Space America has not been overwhelmed with enthusiasm from the U.S. aerospace industry. About 150 firms have paid deposits for exhibits, creating a revenue of $1.2 million, and another 75 have reserved space. Booth rentals start at $2,200 and range up to $22,000 for a “chalet.”
Organizers say that if the San Diego show attracts 500 exhibitors the first year, the event will be able to match the Paris show in size, if not in prestige, within several years.
The organization got an important boost in December when Los Angeles-based Teledyne Corp., which owns Teledyne Ryan Electronics in San Diego, agreed to put up $100,000 to become the show’s fifth “corporate founder.” The other founders are Atlas Hotels, Martin-Marietta, Hughes Aircraft and General Dynamics.
“We thought it was a worthwhile marketing investment,” said Berkley Baker, Teledyne’s spokesman. “If the show is successful, then being in the United States will be an attraction. When you go to Paris, there are a lot of American companies selling to American companies.”
But several other major U.S. aerospace firms, including Boeing Aerospace, Lockheed Corp., McDonnell Douglas Corp. and Rockwell International have decided to skip the San Diego show. Most will, instead, attend another established air show in Farnborough, England, in August.
Too Many Shows?
The industry has complained that air shows are too numerous and too expensive. But Walsh counters that the industry is resistant to a U.S. show because many firms don’t want foreign exhibitors showcasing their wares to U.S. buyers.
So far, that’s not a problem--relatively few foreign exhibitors have signed on. But the show has attracted many smaller firms that could not afford to go to a major air show in Europe. Air/Space America organizers say that a booth at the San Diego show will cost less than one-half that of a similar size booth in Paris and that travel and entertainment costs will be correspondingly lower.
“I looked at Air/Space America as an opportunity to expose my firm to that environment at minimum cost,” said Gabriel Sanchez, president of Advanced Electromagnetics, a San Diego firm that makes a specialized product used in sound-proof chambers. Though the firm’s product is used in the aerospace industry, Sanchez said that attending a major European air show is “completely out of the realm” for his firm.
Air/Space America also has attracted at least some support from the biggest player of all in the aerospace industry, the Pentagon.
Air/Space America was set up as a nonprofit organization to allow the military services to participate in exchange for recruiting booths.
To shore up the exhibit list, Wilson has asked the military services for an example of everything they fly. So far, he has received supportive letters but few firm commitments. The Air Force, for example, has told Wilson that the decision about which aircraft will be sent can’t be made for months.
“We get hundreds and hundreds of requests like this each year,” said Maj. Temple Black, deputy chief of aviation events for the Air Force. “We try to support as many of those requests as we can, but it depends on availability from the units in the area. In some cases, we won’t be able to tell until the week prior.”
Thunderbirds on Tap
But the Air Force has promised the popular precision flying team, the Thunderbirds, for the second weekend.
Attracting public attendance is critical to show’s financial success. An initial study estimated that 100,000 people per day would pay ($12 for adults, $6 for children) to attend the public, weekend portions of the show. But, to be more conservative, the current budget has reduced that figure to 40,000 people per day.
The U.S. Commerce Department also is playing a critical role--finding buyers to attend. The department has been plugging the show through 65 foreign and commercial service offices in U.S. embassies around the world, utilizing a 1985 agreement to help attract foreign buyers for trade shows aimed at promoting foreign trade.
“All we have to do is ensure the buyers are here, and the sellers will come,” Walsh said. He doesn’t know yet how successful the sales efforts will be, but he is anticipating 20,000 buyers a day for the five-day run of the trade show.
To save money, the show’s organizers have cut out most of the planned investments in Brown Field, the former Navy airfield on Otay Mesa that the City of San Diego now operates as a general aviation airport.
Originally, organizers planned to spend about $3.5 million on permanent buildings and other improvements, such as landscaping. Brown Field’s 8,000-foot long main airstrip is long enough to accommodate all of the jets expected.
Instead of permanent buildings, the show will be housed in temporary structures, and most of the landscaping plans have been scrapped. The cost of permanent improvements has been reduced to $20,000.
“I would just like to have enough money to grow grass on the dead, bare spots,” Walsh said wistfully.
Air/Space America only has a lease on the field for two shows, this year and in 1990. The city has agreed “in concept” to a lease through 1996, but expected development on Otay Mesa would require a more comprehensive traffic and noise impact study after the 1990 show.
“After 1990 we felt there would be enough development down there to require another environmental impact review,” said Ellen Mosely, the city planning department analyst who handled the proposal. “We don’t believe there would be a traffic or noise problem now, but in the future it certainly would be a potential problem, and they certainly would have to address all those issues.”
