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«Summer 2009

Todd Duncan’s Dispatch



Although I officially became Duncan Aviation’s Chairman on September 25, 2007, to a large extent this transition began more than 20 years ago and isn’t yet completed. Over 12 years ago, Dad (Robert Duncan, Chairman Emeritus) stepped away from the tactical duties of leading Duncan Aviation and left its daily operation to President Aaron Hilkemann and the rest of the Senior Management Team. Dad had the vision and the driving philosophy for the company, and worked hard at maintaining our presence and relationships within the industry. His role in that capacity has helped me with my transition. It is now my turn to be an active member of our industry, taking part in many of its powerful and important associations and staying involved with key customers and business partners. It is through these relationships that I am able to see growth opportunities and create a vision for the future of Duncan Aviation.


I truly love what I am called to do because I enjoy the people of business aviation. Their support and encouragement lets us know we’re doing something right. I enjoy talking with customers during industry events and meetings like our regular Wednesday night customer dinners or our Customer Advisory Board meetings. Our customers love to talk about Duncan Aviation’s team members. They mention specific experiences and individuals by name and go out of their way to tell others about us. It’s gratifying when, in tough times, others stand up and say you’re making a difference--that your people and teams are something really special. It’s experiences like this that reinforce my opinion that Duncan Aviation’s greatest asset is our people. They are extremely experienced and fiercely loyal. It is because of them and our internal culture that our reputation and long-term customer relationships continue to strengthen and grow.


Even with more than 20 years of experience in business aviation, my transition to Chairman has been significantly tested over the last six months with a freefalling economy and public scrutiny of business aviation. In a very short window of time, Duncan Aviation went from full schedules to a time of tremendous uncertainty. It seems that every 10 to 15 years, the aviation industry is faced with negative economic conditions out of our control; that includes high inflation in the early ‘70s, high interest rates and recession in the early ‘80s and, of course, the tragedy of 9/11 in 2001. Because Duncan Aviation embraces fiscally conservative, long-term strategies, it’s during the times of great profitability that we plan for these down cycles; we take care to continually hone our business and position ourselves in ways to ensure we navigate rough waters in a manner that allows us to come out stronger on the other side. It’s in the midst of one of those horrible times that we currently find ourselves. Aviation fuel sales are down 25-30%, flying is down 30% and aircraft values have plummeted 20-50%. These drastic numbers affect every part of business aviation, and Duncan Aviation is no exception.

In March of this year, for the first time in Duncan Aviation history, we were faced with having to reduce our workforce in order to stay viable. This is definitely not something we wanted to do, but we approached it and worked through it in the same manner we would almost anything else. Key Duncan Aviation managers worked closely with the Senior Management Team in open, honest communication. I truly believe our dedicated workforce has been and will continue to be the backbone of our organization. Having to make the decision to reduce their number is my greatest disappointment. The anticipation was horrible; the unknowns and ambiguity of the situation along with deciding how deep to cut was tumultuous. It was by far one of the darkest days our organization has ever seen and I am certain that it always will be. As we recover and move forward, our schedules and backlogs are much stronger. However, there is still a lot of uncertainty in the industry, and there probably will be through the end of 2009. In these lean times, we’re able to get more done with much less. The long and the short of it is that the shock has enhanced our productivity. We’ve figured out better and different ways of doing things. By necessity, the national economy has done that too. As a privately held company, we are flexible and have reacted quickly to our situation with some positive results. Our shops are busier and we see good operators of business aviation running their aircraft and using them for the right reasons.


We are moving forward with establishing a presence in Provo, Utah; rather than building a large full-service facility right away, we will lease hangar space from and partner with Million Air–Provo to enhance their FBO services. Although it isn’t exactly what or how we wanted to begin, it gets us into a great facility that is big enough to get started with small maintenance support teams by mid-2010. This move is tremendously valuable and will reduce the risk and cost to us and to our customers. From the very beginning, we will be authorized on Bombardier and Embraer products, but will have teams available to work on all of our core aircraft. After a year or two, when we get our footings in place, we’ll add to the facility. It is still our goal to have a few hundred people on-site in three to five years.


The landscape of business aviation continues to consolidate and change. Many of our closest competitors have been absorbed by larger organizations or OEMs and the merging of businesses in other sectors using business aircraft has had a significant impact on aircraft management and charter. Although business aviation is in turmoil, there is one thing that hasn’t changed; Duncan Aviation continues to hold strong to the long-term vision of who we want to be in the next three, five and 10 years. That direction and vision is and always has been to remain family owned and independent. Although our message has never wavered, I’m consistently being asked if I ever plan to sell. Let me be perfectly clear in my answer to that question: I love business aviation and thoroughly enjoy all the people and associations in the industry. I’ve been a part of Duncan Aviation for 20 years, working my way up. I fully intend to remain at Duncan Aviation and in business aviation for at least another 20 years.

As Duncan Aviation’s Chairman, I’m deeply concerned about the economic impact the current administration and economic conditions have had on the industry. Recent negative publicity about companies flying corporate jets for purposes other than legitimate business has had a profound effect. There are now proposals in Congress that will change the relationship between the FAA and EASA (the European Aviation Safety Agency), and how U.S. maintenance facilities become authorized to work on European aircraft. The current language of these proposals puts in jeopardy this solid and trusted relationship and will ultimately end up costing all aircraft owners and operators as well as U.S. and European maintenance facilities that do business internationally. We take our part in lobbying government officials for better legislation very seriously. I and several hundred Duncan Aviation team members have written to our national and local representatives raising issues and expressing concerns. We participate in and stand up with our very powerful aviation associations, such as NBAA, NATA and AOPA. These groups stand together in support of the industry and its future growth both here in the United States and around the world.

The last 18 months as Duncan Aviation’s Chairman has been filled with some of the most rewarding and disappointing experiences of my professional career. Even though unknowns remain industrywide, there are many things I am extremely excited about. Our relationships with our business partners are solid and the future for Duncan Aviation is strong. We will make it through these tough economic times better prepared for what lies ahead because of Duncan Aviation’s committed leadership and all the dedicated and loyal Duncan Aviation team members.