Blazing new trails
Twenty-two years isn’t a long time in the grand scheme of things, but in that period, Leach has grown his company from a bedroom brokerage to a multinational corporation that boasts 16 outposts around the world. While the current economy has slowed down this quest for globalization a bit, Leach still sees a demand for up to 50 Air Charter Service offices around the world — it just might take him a bit longer to get there than originally planned.
“We’ve been opening three offices a year for two or three years,” he says. “Off this relatively tough year where we’re standing still, I think our emphasis over the next couple of years will be on consolidation, building up the offices we have. The number of new offices we’ll be opening will slow down to one or two each year.”
Yes, the economy has been tough recently, but Air Charter Service is doing well enough amid these trying times. Leach recently compared the health of his organization during the period from July 2011-July 2012 and found that while a competitor was down 38 percent in gross revenue, Air Charter Service had only experienced a downtick of 7 percent. Leach says he was quite pleased with that, but he still envisions bumpy skies ahead.
The main challenge next year starts with uncertainty, a state that has plagued the industry for a number of years. This lack of predictability is driven by the volatile economy, of course, but a few signs of life are cropping up. The U.S. economy is getting healthier, he says, and China has shown prospects for growth.
Even with these promising developments, Leach still sees trouble ahead for Europe. “It’s very hard to predict the future,” he says. “All the major economists disagree.”
Being in the general charter business, Leach is somewhat used to a bit of unpredictability. The general cargo business — a world in which he’s lived for his entire career — is susceptible to huge swings in activity. In 1985, for example, Leach was working as an employee with Transamerica Airlines. That year, he saw a significant increase in general cargo flights from London and Europe to
North America — hundreds of flights — and when the rates changed the next year, there were literally no charter flights.
The market went from a demand for hundreds of flights in 1985 to zero in 1986. That seems to be quite a stressful prospect for some, but Leach takes these kinds of things in stride.
“There can be quite extreme swings in cargo charter demand,” he says. “I guess it could be [stressful]. I’ve always done it; I don’t know.” Leach buffeted his company from these extremes by branching out beyond general charters. The company does quite a bit of work for globe- spanning musical tours and other entertainment endeavors like movies.
Leach also has worked hard to establish the oil and gas side of the business. He calls these two arenas nearly recession-proof — “specialized stuff becomes your bread and butter,” he says — which provides a somewhat stable existence for the company. In the middle, resting between the volatility of charters and the stability of oil and gas is automotive work, another key driver for the company.
Air Charter Service is now a monolith in an industry where, he says, the top three global players in Europe combined soak up $1 billion to $2 billion worth of charters per year. He thinks this leaves little room for a new, scrappy entrant in the business — certainly not for someone taking the general approach he pursued all those years ago.
Leach says that if room exists, it’s for someone who can take a specific corner of the market and do that very specific job really, really well. If that person came to the market and filled a niche — anything from animals to humanitarian — then they might be able to take a little chunk of the pie.
“You’ve got to get a niche these days,” he says. “It would be very hard for them to join this race to globalize that ourselves, Chapman [Freeborn] and Air Partner are involved in. But there’s always room for a hard-working, entrepreneurial guy in any line of business.”