FAvS Appoints Directors, Plans 500 Percent Growth by 2003

First Aviation Services is setting an aggressive agenda including acquisitions and internal growth as it gears up to achieve a goal of at least $700 million or more in annual sales over the next five years.

FAvS owns and operates National Airmotive Corp (NAC) and Aircraft Parts International (API). At its first board meeting earlier this month it appointed Michael C. Culver and Robert L. Kirk as directors. Culver also is FAvS president and CEO. Net sales were $153.6 million in 1998.

Much of the company's growth will be driven by trends towards outsourcing, globalization and the use of cross-enterprise software programs to increase productivity and reduce costs, according to Culver. In particular, the industry is moving towards power-by-the-hour or cycle-based programs for entire aircraft, brakes, landing gear and other systems.

Four initiatives are helping to improve performance at NAC. These include: a 20% reduction in employees, which occurred in March; a re-engineering of management practices; the shift to a product-line organization; and aggressively pursuing U.S. government business, Culver said.

As a result, gross margins at NAC are running at approximately 15 percent this year versus 13.2 percent last year, he said. Sales per employee are up eight percent over 1997. NAC recently won $200 million in T-56 engine-related work from the U.S. government.

NAC is moving into the industrial gas turbine market with a "fired hour" program that is similar to power-by-the-hour plans. Most industrial turbine operators do not want to develop or maintain internal engine overhaul and repair capability, Culver said.

API has seen recent success in providing logistics support services. For instance, it manages certain consumables requirements for one airline system-wide. The customer receives one invoice a month plus a series of management reports.

By Paul Proctor