Home Builder’s Perspective Helps Lyon’s Firm Soar in Aviation Business : Airlines: His new company controls a network of service providers that do everything from cleaning aircraft toilets to modifying fuselages.
When he took over daily operations of ailing Air California in 1982, one of the first things developer William Lyon did was look around for ways to trim costs.
As a home builder, he was used to dealing with subcontractors to keep his own payroll lean. And he saw no reason why the same sort of system wouldn’t work in the airline business. It did. In an industry first, Lyon hired T.G. Shown Associates to handle AirCal’s air cargo marketing operation.
Lyon and then-partner George Argyros, another Orange County developer, have since sold AirCal for a tidy profit. Now Lyon, a retired Air Force major general, is back in the aviation business again and figures he can use his financial and management skills to build another successful operation.
His latest venture is Air/Lyon, a 9-month-old Newport Beach-based holding company that controls a network of service providers that do everything from cleaning aircraft toilets to modifying jetliner fuselages.
And that’s just the start. Lyon and partner David A. Banmiller, a former AirCal president, envision a national--perhaps international--company operating on the premise that the real money in commercial aviation is not in owning an airline but in providing all the services that keep the airlines in business.
Air/Lyon now has three operating companies--Elsinore Aerospace Services, International Aircraft Support and Martin Aviation--that together provide charter operations, pilot training, aircraft fueling, airframe and engine maintenance and repair, engine parts, aircraft engineering and design services, and contract baggage handling and passenger services, such as ticketing and customer relations.
“We have got to build strength,” said Lyon, who is chairman of the holding company. “All of the companies are well-grounded in the businesses they are in. But the experience of the people in those companies, plus the combination of Dave and I, bring together management and financial strengths that are really something. This thing can only prosper and improve.”
Banmiller, who is president of Air/Lyon, said the goal is “to use the combined strengths and interrelated services of all three companies to grow each as big as possible.”
The growth has already begun, and Banmiller said Air/Lyon should post as much as an 18% revenue gain--from $80 million to $95 million--in its first year.
Of its three units, Downey-based Elsinore Aerospace Services is the largest. When Air/Lyon bought it in April, Elsinore had four operating divisions, facilities in 11 states, 800 employees and projected fiscal 1990 revenue of $40 million. Banmiller said that should hit $45 million in fiscal 1991.
One division, Elsinore Aircraft Services, provides aircraft maintenance and janitorial services, aircraft ground handling, air freight and baggage handling and passenger services to airlines at 30 airports--including most of the major ones in California. Banmiller said Air/Lyon intends to boost the division’s presence to 50 airports and to increase the number of contracts it handles at the airports it now serves.
A second division, Elsinore Airframe Services, is located in Waco, Tex., where it maintains a 100,000-square-foot facility for maintenance, repair and modification of commercial, military and corporate aircraft. The company is about to launch an expansion either by increasing the size of its current facility or by leasing or building a second one elsewhere in the Southwest, Banmiller said.
Other Elsinore units provide aircraft engineering specialists to more than a dozen major aircraft manufacturers and provide contract mechanics to airlines around the world.
The smallest of the Air/Lyon companies, International Aircraft Support, leases and sells jet engines and sells overhauled engine parts and components to air carriers. The company is headquartered just south of San Francisco and maintains a sales office in London.
The third and most broad-based of Air/Lyon’s companies is Martin Aviation, which was acquired in February. Martin, headquartered at John Wayne Airport, runs a flight school and a private aircraft sales operation, provides maintenance and repair services and operates a major charter flight operation in Orange County and at a satellite facility in Virginia.
Martin handles all fueling services for the airlines at John Wayne and is bidding for the contracts to operate and maintain the new underground fuel system and the refueling service operation that will open up next year. The company, which recently acquired a smaller service operation at the airport, also provides parking for private and corporate aircraft.
Banmiller said Martin’s revenue could hit $35 million this year, up from $30 million in 1989.
Lyon said Martin is “the leg of the Air/Lyon triad that is into flying in a big way” through its charter operation, which the company plans to enlarge by acquiring more and larger aircraft to augment its fleet of 40 planes and jets.
“The strategy,” said Lyon, “is that with the new expansion of the airport and the further development of Orange County, a tremendous amount of business is going to be created for services at the airport. We want to be players in that growth.”
