Martin Aviation to Buy Yet Another Services Company
In a deal that increases its holdings at John Wayne Airport by about 50%, Martin Aviation said Tuesday that it has agreed to buy the assets of a competing ground services firm, Million Air.
The acquisition is the fourth in a string of purchases by Newport Beach developer William Lyon and former AirCal president David A. Banmiller since the two teamed up late last year to build a national aircraft, aviation services and charter network.
Martin, founded by the late aviation pioneer Eddie Martin in 1923, is the first company to be purchased by Air/Lyon Inc., the holding company Lyon and Banmiller formed.
Terms of the proposed Million Air acquisition were not divulged. Both companies are private.
Million Air, founded in 1983 as Tower Aviation, is owned by Pel-Aire Inc., a company of local investors headed by Newport Beach lawyer Paul Hegness. It became part of the national Million Air franchise in 1985.
Hegness said his group decided to sell “because in today’s economy in the aviation world, the economies of scale make it difficult for a smaller business to compete.”
Million Air grossed about $4 million last year, according to Martin officials. Both companies provide hangars for private aircraft at the airport, and both provide parts, maintenance and aircraft fueling for corporate, commercial and private aircraft. In addition, Martin Aviation sells private airplanes and runs a flight school and a charter operation.
Million Air, which has 46 employees, leases 7 1/2 acres at the county-owned airport. Its assets include 30,000 square feet of hangar space, 12,000 square feet of offices, several fuel trucks and a wide range of tools, parts and equipment. The company’s revenue for 1989 was not disclosed.
Martin has 140 employees and leases 10 acres at the airport. Its 1989 revenue is $23 million.
Martin maintains a 100,000-square-foot hangar on five acres on the west side of the airport, and it has a 40,000-square-foot maintenance facility and a 10,000-square-foot complex housing its headquarters, sales operation and flight school on three acres on the east side.
The company also operates a satellite fueling and maintenance facility at Long Beach Airport and a charter business in Virginia.
In all, it maintains a fleet of 40 aircraft, ranging from small private planes to the largest corporate jets, in Orange County and Virginia.
Martin Aviation President Marvin Tuomala said the Million Air acquisition will reinforce his company’s position as the largest provider of services at the airport. He also said there still will be more than a dozen small firms providing maintenance, fueling, charter flights and other services.
In a prepared statement Tuesday, Banmiller said acquiring Million Air’s facilities and equipment “is consistent with our expansion plans for Martin Aviation” and will increase the company’s ability to “more effectively compete in the Southern California market.”
Banmiller has said before that he and Lyon intend to acquire a variety of aviation service firms because the real profit in aviation is on the ground rather than in the air.
Most major airlines operate at a small profit or at no profit. But service companies can be quite profitable. These companies clean, repair and fuel airliners; load and unload them; handle passenger boarding and tickets at some facilities, and even lease the engines that propel airlines’ jets.
On March 5, within two weeks of announcing its acquisition of Martin in late February, Air/Lyon said it had purchased International Aircraft Support Inc., an engine maintenance and leasing firm whose headquarters are in Belmont, near San Francisco International Airport. That company also has an office in London. It has 20 employees, and its revenue for 1989 was about $10 million in 1989 revenue, according to Banmiller.
Less than a month after that, on April 5, Air/Lyon acquired Elsinore Aerospace Services, a Downey firm with three divisions, 800 employees and a projected 1990 gross income of $40 million .
