Not many Springfield businesses manage inventories approaching $20 million. But not many Springfield businesses manage a warehouse full of private jets, either.
Burgess Aircraft Management LLC’s inventory comprises eight aircraft, and its warehouse is a 15,000-square-foot squeaky clean hangar at the general aviation facilities adjacent to Springfield-Branson National Airport. The company charters more than 50 flights a month through OzAir Charter Services, which Mark Burgess founded in August 2007 with Springfield advertising executive Bob Noble and manufacturing executive Pat McKee.
“Probably 75 percent of our business is corporate clientele traveling to seminars, business meetings and functions. The other 25 percent is recreational, vacation type,” Burgess says.
Early last year, Burgess bought out co-founders Noble and McKee, who died earlier this month after a short illness and had co-owned stainless steel manufacturer Holloway America. By July, author and public relations consultant Ryan O’Reilly stepped on board as a 25 percent owner in the company.
“He bought an airplane and wanted to start his own charter company but figured out how difficult that was to do,” Burgess says of connecting with O’Reilly, a member of the entrepreneurial family that founded O’Reilly Automotive Inc. “We sold his airplane. He owns part of my planes, now, because he’s part of my company.”
The partners, along with a group of investors, last month purchased a 2006 Cessna jet for $3.8 million under the five-member ownership group Flying Five LLC.
“It’s a nice bird,” Burgess says. “It’s going to work out well for us.”
O’Reilly, who handles aircraft acquisition and management, says the purchase was a “zero cash in” deal.
“Our owners haven’t put a single dime into the aircraft,” he says, noting the financing was guaranteed based on customer use and charter revenues covering the note payments and fixed operational costs. “It’s a situation we’re planning on replicating.
“We’re talking about small groups of four, five or six people owning a 3, 4 or 5 million-dollar jet.”
OzAir started with two planes, but tough economic times have produced opportunities in the aircraft industry. Burgess says airplane values have reduced by half compared to five years ago.
“When the economy tanked a little bit, we picked up some airplanes because there were companies in town that really couldn’t justify the airplanes anymore,” he says, noting companies with a history of corporate jets such as Prime, BKD, Jack Henry & Associates and John Q. Hammons Hotels still have their own flight departments and crews.
Under Burgess Aircraft Management, three planes are managed and maintained for separate owners. The company employs six full-time pilots, an administrative assistant, and a mechanic and shop assistant. One airplane, owned by Kanakuk Kamps, is stationed at Branson Airport’s general aviation terminal.
Vaughn Zimmerman, the managing member of Zimmerman Properties and president of Wilhoit Properties, is among the aircraft owners contracted with Burgess. Last year, Zimmerman bought a 2001 Cessna jet to send key personnel to the more remote areas in the 11 states where the company is developing.
“It’s hard to get to where we go,” Zimmerman says, pointing to Williston, N.D., about 30 miles from the Canadian border, and Odessa, Texas, where the oil boom is spawning residential developments.
The Springfield real estate company has added an East Coast division, he says, and is producing housing developments for oil workers.
Zimmerman’s five-passenger plane, registered with the Federal Aviation Administration as Business Aviation LLC, is in Burgess Aircraft Management’s charter program.
“When we’re not using it, other companies are using it in town,” he says, adding another perk is upsizing for larger group trips. “If your plane is gone, or you need a bigger plane, you have access.”
Earlier this month, Zimmerman was among a party of nine who traveled to Houston for a day trip on another chartered plane.
Burgess says hourly rates range between $1,100 per hour for the Beechcraft King Air, the only turboprop in the fleet, and $3,400 per hour for the newest jet.
The company finished 2012 with more than 500 flights on the books.
“On a given month, we’ll launch 50 to 70 flight operations,” says Burgess, a pilot for three decades who now only flies as a last resort.
Contracting with fractional companies and charter brokers, he says up to 30 percent of flights originate outside of southwest Missouri. OzAir is on a call list for other charter services, as well as for organ transplant companies in Kansas City and St. Louis.
“We do transplant work, organ runs,” Burgess says. “Usually a couple of times a month, we’ll be on a midnight transplant run.”
Compared to the days in the late 1970s when Burgess broke into the Springfield aviation business, he says the current fuel market is the biggest change. He says jet fuel runs $4.25 per gallon to $8.50 per gallon depending on the fueling station – a huge spread compared to a $1 gap on the high end years ago.
With 13,000 flight hours under his belt, Burgess is used to navigating through changes.
“This is all I’ve done all my life,” he says. “My hangar is sitting right on the spot where I started in 1976. This has been a fun ride.”[[In-content Ad]]
