Jet Support Services (JSSI) claims to be the world's largest independent provider of hourly cost maintenance programmes for the business aviation industry. The US company has just opened its new European headquarters in Farnborough, UK, at TAG Aviation's facility. Louis Seno, JSSI president and chief executive, and executive vice-president and general counsel Susan Marr, tell Flight Daily News about their plans for European expansion

Why have you set up your new European HQ in Farnborough?

(LS): We've been doing business in Europe for over a dozen years. When we started building a clientele here it was obvious that we needed a European location. At the time - from a legal and tax standpoint - Luxembourg seemed to make sense. I'll be kind, and say it was a very "non-strategic" location. Our office was in a residential neighbourhood, literally above a carpet store. We realised at the beginning of 2009 that our goal was by the end of the first quarter of 2010 to be in what I call a strategic business aviation location in Europe. We looked around and thought Geneva could be a possibility with EBACE being there, and then came to Farnborough to this facility, which was totally booked, but a space opened up. This seemed to be the epitome of a corporate and business aviation mecca. We've signed a three-year lease with TAG.

This is just really a [European] HQ. Our customers are all over Europe and they're not necessarily flying in here. We just wanted an airport with some visibility.

Louis Seno & Susan Marr JSSI
Louis Seno, JSSI president and chief executive, and executive vice-president and general counsel Susan Marr

(SM): We've always provided client service to our European customers, but we've tried to do it from our Chicago office and so [our employees] wouldn't be as available as we want them to be. Now we're really making the commitment of having an account manager here [in Europe]. He'll still have that back-up team in Chicago supporting him. Over time we'll add to those client services people in this office, we'll have a couple of administrative people and one tech rep who will serve the UK region and will be based out of this office.

How much have you invested in your Farnborough HQ?

(SM): If we had to try to put a dollar figure it's $500,000, but it's the people that are the real investment. We see Europe as a very important market for us.

Does the current downturn represent the best time to be expanding in Europe?

(LS): The noteworthy thing is that we see some of our competitors cutting back, not replacing people, while we are really investing in people. We are a service organisation and it's all about the people. We're looking at putting a technical adviser in Dubai because we're growing in that part of the world. We've got 400 contracts here [in Europe]. The recovery here I think is going to outpace the recovery in the USA.

(SM): We're seeing significantly more new aircraft deliveries, which is a very good measurement of what's happening, and an expansion of wealth into areas of Europe that you didn't normally think about, so all of that is very intriguing to us. As long as people can buy the airplane and take delivery of it here, that's a really good opportunity for us."

Which products are you seeing most demand for?

(LS): Probably our most popular product is our core engine product which we introduced into the market in 1989. It's an hourly cost product that covers everything, and we've got a couple of different versions of it. We have a programme where literally you have no additional charges. For instance we cover the freight to ship the engine in, we can cover removals and replacements. We're probably not that sexy a business, but we've just kind of really refined our core product.

The difference between us and the OEM is on a basic engine our guys will pull a rate-sheet out and [say for a] 150h minimum on a 731-5BR, 'here's our rate'. On the airframe side it's very different. We build the rate for you based on your flight profile that you provide us. It's a really customised programme written around your structure.

How tough is it trying to compete head-to-head with the OEMs?

(LS): We started this company 20-plus years ago. The sell was really that you would go to somebody and say we think you ought to be on a programme. He would typically think: do I go on a programme or just self-reserve? Now, in 20 years, that has transitioned (especially in the USA, where aircraft are coming under high scrutiny) to people saying: "It's not really fiscally responsible to run these engines, as we like to say, 'naked'." Now the decision is: "Do I look at the OEM programme or do I look at JSSI as an independent?" We believe that we offer a number of distinguishing characteristics. We think the OEM programmes are fairly standard. We don't think there's all the customising that we do. Let's take Hawker Beechcraft. You're buying your first airplane - let's call it a King Air - and you enrol it on our programme. The salesman comes in and says you need a 400XP and you trade your airplane in. We take your programme and we move it. You don't have to sell it with the airplane. If you are on the manufacturer's programme you really can't do anything, but we say "fine: you can take that balance and you can hold it until your next airplane". If you've come out of a King Air and now you buy a Citation XLS, we just move it across.

(SM): There's something else that we do, that the manufacturers can't do. When you come on our programme you get an independent technical adviser watching over each major maintenance event. He's not connected with the service provider or the manufacturer, so he's going to be really looking after that client's interests.

Have the OEMs become more aggressive as a result of the recession?

(LS): What we found is that when the manufacturers were selling a lot of airframes and they had a big backlog, we were literally a blip on the radar screen. Now that airplanes are not selling as well, they all now are aggressively coming after us as an independent. Now, selling hourly cost programmes has all of a sudden become something that "oh, wow, that's a niche we ought to be going after".

With many of the OEMs it's a love-hate relationship. I compete every day with Rolls-Royce, but I send a lot of engines through R-R Canada. We compete with General Electric on the CF34. It's a strange relationship. We have MoUs set up with OEM shops and OEM-authorised shops and we have these shops come to us and they want to negotiate MOUs with us, especially today.

(SM): They like our business. They want to give us good terms because we have such a large fleet of aircraft that we need to keep maintained.

How badly has JSSI's overall business been hit by the recession?

(SM): Our revenues come from flight hours. If I showed you a chart that graphed our flight hours over the last few years, in the fall of 2008 when the three chief executives of the car companies flew to Washington DC it was like people parked the airplanes. Now flying has come back somewhat. We saw a little bit of an upturn at the end of last year. January and February were lacklustre.

(SM): Revenues are down because of flight hours, but so are our maintenance expenses, so it helps JSSI to remain strong even in hard times.

How important is the EBACE show to your business?

(LS): EBACE has always been a good show for us, and our success at EBACE has grown as our portfolio has grown. We get many of the service providers come to visit us at EBACE. It's a great customer-contact venue like NBAA in the USA. This is our second biggest market after North America and the message is that we are committed here. Our entire tech team is here and we've brought the Farnborough staff over. We're very supportive of a targeted show like EBACE.

Source: Flight Daily News