Greater Fort Lauderdale Authority

Dec 12, 2019

As a hub for aircraft support in the United States, Florida hosts a dizzying array of specialist maintenance, repair and overhaul (MRO) companies. Some tear down engines, some fix landing gear and some work on the little-used but vital components that most passengers never see.

Pumped up in Fort Lauderdale

Fort Lauderdale-based Aviation Inflatables has been repairing and inspecting emergency slides since 2007, although its business really took off with contracts from JetBlue and Delta Air Lines in 2010 and 2011.

Quick growth thereafter pushed the company into a scattering of facilities, but in late 2016 it consolidated at its present location in Sunrise – a 134,000-sq-ft-building that roughly doubled its previous capacity.

Such a big move obviously presented challenges, so Aviation Inflatables called on the local economic development body to help speed things up.  

“The Greater Fort Lauderdale Alliance [GFLA] really has helped us,” says German Alvarez, CEO of Aviation Inflatables and founder of the company with his wife, Angie Alvarez.

“We had some issues moving into this building, which delayed us by three to four months, but the GFLA helped us to talk to the city and we got it resolved,” he says.

Alvarez is also grateful for efforts to build an aerospace cluster in the Fort Lauderdale area, where a critical mass of aviation companies, infrastructure and training is now evident.

“There are some major customers within 10-15 miles of us now,“ he says, adding: “The closer our customers are, the bigger chance we have to win those accounts, plus it lowers shipping and transportation costs.”

Another advantage is the company’s proximity to three big international airports: Miami International, Orlando International and Fort Lauderdale-Hollywood International.

Together these make South Florida “the gateway to South America, Central America and Europe”, according to Alvarez, who hopes to announce a new South American customer soon.

Aviation Inflatables’ location also benefits from a deep talent pool: Fort Lauderdale has about 35 colleges and universities, several of which offer aviation-focused training.

This should prove useful in the coming 18 months, when the company plans to add up to 30 staff – about a third of its current workforce – most of whom will be skilled labor.

Until now Alvarez has recruited almost entirely from the local area, and he doesn’t expect that to change.

“We’ve had discussions with the GFLA about what we’re looking for and they’ve helped by being the middle-person with the colleges and technical schools,” he says.

Engineering skills are in particular demand as Aviation Inflatables moves into the production of PMA parts, which are, essentially, cheaper equivalents of branded components.

Alongside specialist repairs know as DER, PMA allows the company to offer customers a range of solutions for the repair and replacement of emergency equipment.

To assist with this the company has invested in a 3D printer to accelerate prototyping of new parts.

“The aviation industry usually lags behind on new technologies so we are trying to correct that and use the tools we have on R&D,” says Alvarez.

Such initiatives by Aviation Inflatables and other Fort Lauderdale companies should ensure that the city remains at the leading edge of aircraft support in the United States.

Sun, sea, sand and labor pools

How GA Telesis developed an integrated aviation support business in Fort Lauderdale.

Like many Florida aerospace companies, GA Telesis (GAT) was born in Miami but later moved to Fort Lauderdale, a common reason being the latter city’s central position between the labor pools of Miami and Palm Beach.

“Much of the decision was based around people and what we could get in Fort Lauderdale versus just being in Miami or Palm Beach,” says Abdol Moabery, president and CEO of GAT.

Since it shifted headquarters to Fort Lauderdale in 2004, GAT’s headcount in Florida has risen from 50 to 350, encompassing a disparate variety of skills, from mechanics to logistics experts, to asset managers.

This reflects a growing trend of vertical integration in aviation, as companies seek to add capabilities that offer customers a full spectrum of services.

Thus a maintenance provider might branch into leasing to provide spare engines during equipment overhauls, or a parts supplier might add asset management to help manage the replacement cycle and lower clients’ lifecycle costs.

GAT’s own business can be broken into three main parts: asset management and leasing; parts and logistics; and maintenance.

“We have customers where we lease them their airplanes, do their engine and component maintenance and supply parts,” explains Moabery.

As GAT’s president suggests, growth in one part of the business tends to feed into another, but this structure also requires a wide range of talent, which, handily, the local area can supply.

“Broward College [in Fort Lauderdale] has a large aviation program that puts out folks getting education on the business side, on the maintenance side and on the flying side, so we have significant pool of labor to draw upon,” says Moabery.

Another draw for employees and employer alike is the absence of state income taxes, though Florida’s traditional attractions are well appreciated, too.

“We have sunshine 300 days of year, plenty of things to do, every sport imaginable – it’s a bit like working in paradise,” chuckles Moabery.

Away from the beach, Fort Lauderdale International is also helping to bring in new customers, having recently introduced new international airlines such as Emirates, British Airways and Aer Lingus.

“There are more long-haul international flights coming into Fort Lauderdale than ever before and that’s a pretty significant thing for us as those airlines know there is a support function here for AOG [aircraft on ground] or some kind of maintenance action,” he says.

Moabery believes that GAT’s bread-and-butter products like maintenance and financial services will experience the strongest growth in the near future, but the company is also investing in new technology and should add a new strand to its business, IT services, soon.

This reflects the growing importance of big data analysis to aviation parts and other aftermarket companies, which must keep track of vast quantities of expensive components attached to complex maintenance histories.

Recognizing this need, GAT is preparing to release a software platform “that will be an enhancement to how supply chains are managed worldwide for our competitors and customers”.

If that proves correct, GAT should need little help marketing the new product, but – like other businesses in the city – it can also look to the Greater Fort Lauderdale Alliance, an economic development agency.

“When we do need something that’s who we reach out to,” says Moabery.

Light-touch growth

How parts specialist HEICO grew into a multibillion-dollar corporation from its Fort Lauderdale base.

Aerospace manufacturers derive a good chunk of their profits from selling spare parts, the price of which – much to airlines’ annoyance – tends to rise each year.

This has led to more demand for unbranded parts, known as PMA, which offer equivalent reliability and performance to original equipment, but at a lower cost.

Hollywood, Fort Lauderdale-based HEICO is the leading manufacturer of PMA parts, having grown from $25 million in sales in 1990 to roughly $1.5 billion this year.

That growth has seen it quadruple its staff in South Florida since 1990, adding engineering, project management and administrative talent to what was once a manufacturing-focused workforce.

“We used to recruit more nationally but as the tri-county area [Palm Beach, Broward and Dade] has grown in population and business maturity we are able to recruit here as well,” says Eric Mendleson, president and CEO of HEICO.

Mendleson attributes HEICO’s success to the acquisition and development of more than 60 companies around the world. These have added electronics, repair, support and delivery capabilities to its core PMA offering.

“Over 28 years we’ve developed a successful decentralized business model where we are able to acquire highly successful niche entrepreneurial businesses and maintain the character and the enthusiasm within those businesses,” he says.

Fostering creativity and independent thought becomes tougher if a corporation grows and increasingly relies on a rigid playbook to govern its sprawling businesses.

It would have been easy for HEICO, now a $6 billion listed company, to do the same, but Mendleson believes that its aversion to excessive bureaucratic oversight is partly down to the location of its headquarters.

“I do think that, psychologically, seeing the sun on a disproportionate number of days is very beneficial to corporate thinking and mentality,” he says.

“In a crappy climate people sit indoors thinking up things to do, but by being in an environment where people tend to be happy we interfere less with our businesses.”

Another benefit to the business is HEICO’s proximity to Fort Lauderdale and Miami international airports, which offer a wealth of international connections unavailable from airports in western Florida.

Big airports and business advocates such as the Greater Fort Lauderdale Alliance have helped draw more aerospace companies to Fort Lauderdale, and these have reached a critical mass in the last decade, Mendleson says.

“That helps young people wanting to move here, whereas 28 years ago it was a stretch to persuade young people to move here – it was perceived more as a retirement place.”

He adds that Florida’s “high quality of living and relatively moderate costs” are also a key draw.

Alongside fresh talent, HEICO has continued to invest in new technologies. These include a battery of 3D printers, versions of which the company has used for 20 years for prototyping and manufacturing purposes.

“Ours is a technology-driven aerospace and electronics company with a high emphasis on new product development,” notes Mendleson.

Those new products should help airlines in the battle against parts price inflation, thereby transferring another of Fort Lauderdale’s advantages – low cost of operations – from HEICO onto its customers.