On the Record with
JAKE CARTWRIGHT, PRESIDENT & CEO, TAG AVIATION USA

TAG Takes a Breather After Many a Buy

"The pace has been a little slower which has given us time to do things a little better," TAG Aviation USA president and CEO Jake Cartwright says of the year to date and the overall economic climate.

TAG, one might say, is taking a breather this year as it consolidates meteoric growth that's included establishment of the CitationShares fractional ownership joint venture with Cessna, expansion into the UK with the signing of a long-term lease on Farnborough Aerodrome, and the 1999 acquisition of Wayfarer.

"TAG Group in Geneva bought three companies in 1998, Wayfarer in '99, then had just tremendous growth last year due to the booming economy," says Cartwright. "This year things are slower and that's good. We're probably not going to do any acquisitions in the very near future; this gives us a little breathing space to make sure all the systems are in place to handle the larger company we are now."

It seems, however, that Cartwright's definition of "slower" has more to do with pace than with business. "Anybody in the business will say it is slower, but we're actually ahead of where we were last year in terms of revenue from management charter, and way ahead in used aircraft sales," Cartwright says. "Perhaps we're just more efficient in the systems we're getting in place: a new accounting system, and an updated central database system called TAGNet that shares data among salesmen throughout the group. All these things are making us more efficient and effective.

"We really did double in size in the last couple of years in terms of employees and airplanes, and like many companies we handled each piece of paper more than we needed to," he says.

"But when you are growing like that the office systems just can't keep up."

In assessing the state of TAG's businesses this year, Cartwright points to:

· Used aircraft sales: "Our business has more than doubled from where it was at this point last year. We've got a couple more people in that part of the business. There are really a lot of buyers-they're just a little more discriminatory than last year when they had to pay top dollar. This year they can shop a little more."

· Managed fleet: "Growth is slower than last year but with some quality airplanes, and with some more efficient systems we're able to really do better revenue-wise almost with the same number of airplanes," Cartwright says. "We've got a couple of very big proposals out there right now. Activity has been a little slower, we're not getting a call a week for a presentation, but we're not losing any airplanes." TAG added 39 aircraft last year and still has a global managed fleet of around 150 bizjets.

· CitationShares fractional ownership: the operator logged its 100th new customer in July and will have 20 Citations in service by the end of the year, including its first Excel. The fleet is expected to more than double to nearly 50 aircraft next year.

· Charter: slower than last year "but not slower than we expected; revenues are about the same if not a little better, it's just not as frantic."


That, however, changed with the terrorist attacks in New York and Washington, after which the "frantic" pace of charter aircraft use resumed, Cartwright told Show News Special Edition at presstime last week.

The attacks prevented what would have been TAG's first appearance at NBAA, with all three company units participating and the trumpeting of a new, interactive website (which went on line last week, several days late).

Whether last week's "spike" in charter operations continues remains to be seen.

"The economy is still not very good," Cartwright says, and "in the short term it's not getting any better."

"It's a little too soon to tell whether people will be buying airplanes just because they're afraid to use the airlines."

-John Morris

McLeran Named COO

TAG Aviation USA has named Charles S. (Chuck) McLeran as new EVP and COO.

McLeran, who has been with TAG Aviation since 1992, was most recently the company's VP of flight operations and standards.

Prior to Joining TAG Aviation, McLeran served as a captain and check airman with Eastern Airlines and spent a total of 32 years in the airline industry. He has logged over 20,000 flying hours in military and civil jet aircraft.