DISMANTLING AIRPLANES

By 1990, the US economy had hit a recession patch that had its cycle and tended to surface almost every 6 years. Pan Am Airlines filed bankruptcy in 1991 along with a few major legacy airlines.
This negatively impacted our business to some extent.
Ironically, the same recession also opened up a window of opportunity for us. Many aircraft were parked due to multiple airlines facing bankruptcy and liquidation cases. And there we were, constantly looking for new revenue streams.
I started working on a novel idea. I knew the chances of these grounded aircraft ever taking to the skies again were remote, in fact, close to impossible, given the financial constraints. I thought there was an opportunity to buy these aircraft which were parked in the desert and start dismantling them for components that could be re-used.
I was pretty much convinced that our shops could service or over-haul many valuable components so that they went in as refurbished parts for many airlines seeking to replace their worn-out parts.

So we set out to acquire Boeing 727 and 737 aircraft which were parked in the deserts awaiting the outcome of bankruptcy cases. United Airlines had 14 such aircraft but the price they demanded was steep.

As we were debating the pros and cons of a costly purchase, we found out that FedEx, our newly acquired client, had 5 aircraft for sale. So we negotiated the price and agreed to buy all 5, minus the engines which FedEx wanted to keep. The deal was done, Aero Controls was now the owner of five engine-less aircraft.
Now we needed to figure out where to dismantle or break down the aircraft. Ideally, we wanted the disassembly unit close to our shop. Thus, we began talking to a handful of airports within a 50-mile radius having runways big enough to land these aircraft.

Soon we hit the first hurdle. Many airports did not want to see aircraft disassembling done on their premises for obvious reasons.
Among the airports we contacted was Sanderson Airport in Shelton, which was slightly outside the 50-mile radius. To our surprise, they showed interest and decided to send their director of economic development to visit our facility and negotiate terms and conditions.
Finally, we leased 10 acres of land in Sanderson for our new operation - disassembling of aircraft. Aero Controls was probably the first aircraft company in the US to buy aircraft and break them down to mine for critical parts.

The crux of the matter was such parts would prove to be viable replacements for faulty aircraft parts that were still in the air.
Shelton was a small town about 60 miles away from the Aero Controls facility. It was a town with a population of about 8000 people, many of whom had been settled there for a few generations. Shelton had high unemployment and was considered an econom-ically disadvantaged area by the government.
Our entry into the town of Shelton was a piece of welcome news for everyone. They knew this could bring some employment. The arrival of the first aircraft was received by locals with great excite-ment and much cheering. Most residents of the town had never been inside an aircraft. So we decided to have an open house for all those who wanted to see and experience what it was like to be inside an aircraft. We also got the support of a local radio station which decided to broadcast the event.
It was an all-day event where many showed up. We provided some snacks and drinks. This was also an opportunity for us to make a statement. We were looking for people with skills that went into the dismantling operations.

That was just the beginning. As soon as United Airlines found out that we bought 5 aircraft, they contacted us. They claimed that they had misunderstood our requirement and thought we were looking for one aircraft, hence the high price that was initially quoted.
Now that they realized our new business entailed the purchase of used aircraft as raw material, United made a great sales pitch. They wanted us to buy their entire inventory - all 14 aircraft. The price they offered was 20 per cent cheaper than what we paid to FedEx.

I too thought this made good business sense. Anyway, we had decided to take this route, so why not get a long-term position by buying in bulk? I signed a deal to buy 14 United Airlines aircraft, some of them still in service and flying commercial routes. So we agreed to a staggered one-year delivery period.
But it so happened that United was unable to deliver some of the aircraft as per the schedule since they were flying overseas. In a bid to make sure that they did not violate the contract, United started lining up other aircraft.
They identified eight aircraft that were part of their domestic fleet, but not in the original list of 14 they had set aside for sale, to be fit for being grounded. By the time, our contract with United Airlines expired, Aero Controls ended up buying 22 aircraft.

The industry was taken by storm. Aero Controls was making waves. A recently started air repair company was setting the ground rules, setting the benchmark for how air repair was to be done. There was no looking back, once the United Airlines deal got underway.
By then, our Shelton facility had multiple aircraft waiting their turn to be dismantled, their reusable parts salvaged for refurbishing. That is when it hit us we did not have a warehouse to store these parts.

As there was no big warehouse available in Shelton, we found a 13-acre land adjacent to the airport, which we soon purchased. Faced with a constant squeeze on space at our rented facility where Aero Controls had its main operations going, it did not take me much time to make up my mind. This is where we would construct our first 30,000 sq ft building.
Now that the dismantling business too was on at full blast, we decided to add a hydraulics shop and structural shop by opting for another 40,000 sq ft building. Result: we were able to offer employment to 30 people.

Our aircraft acquisition for dismantling was progressing at a fast clip. We were alerted by the industry whenever aircraft with or without engines were put on the block. But aircraft without engines could not be flown in. That left us with only one option.
We created a team of skilled technicians who were assigned to travel to wherever these planes were parked. They were tasked with onsite disassembling. We had an entire trailer filled with all sorts of  In 1995, Aero Controls purchased two 737-200 aircraft with engines from a bankrupt leasing company in Arizona. After review-ing the records, we realized that one aircraft had a good airframe with bad engines and the other with good engines with bad airframe.
So we removed the two good engines and installed them on the good airframe which gave us a good aircraft for possible lease. We were contacted by charter operator Ryan International Airlines with its headquarters in Kansas City.

They were looking to support their Atlantic City casino oper-ations with an additional aircraft. The aircraft was to be flown to various US East Coast cities to pick up rich gamblers and bring them to casinos in Atlantic City.

The ownership of the refurbished 737-200 aircraft bought in Arizona was transferred to a corporation I created called Triple J Leasing Inc., named after the first letter J for my three children - Joby, Jeena, and Julie. Thereafter the aircraft was registered with FAA with the registration number N730JT.
We negotiated a two-year lease with Ryan International Airlines after the aircraft had gone through some major maintenance and modifications. We met with Mr. Ron Ryan, the owner of Ryan International Airlines and negotiated rates.

As it often happens, over many rounds of negotiations, Ron and I became good friends. This friendship would yield way more than mere dry leasing arrangement of the aircraft. Ron would open the doors for me to get into a green-field area, though inadvertently. Sure, it would take a couple of years before that situation would come to pass. Then, Ron would be the reason I would get into the hospitality industry.
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