Signature’s new chief remains optimistic despite traffic drop
Who would come into the FBO business in January 2009, with business aviation in the throes of one of the deepest downturns in its history? Well, Michael Scheeringa for one. The former CEO of fractional ownership provider Flight Options took over as president of Signature Flight Support (Booth No. 7040) and after just over 100 days in office he has no regrets.
“In the spectrum of aviation, this is a great place for me to have landed,” he told EBACE Convention News. “Signature is the number-one brand in terms of size and stature and we are now at the bottom end of the down cycle so this has to pose opportunities.” In other words, the only way is up.
From the perspective of Scheeringa, who was also a former US Airways executive, the dip in business aviation traffic is entirely predictable given the steep decline in corporate earnings. “It is the marginal traveler who is not flying now,” he said, explaining recent reductions of between 20 and 40 percent in traffic passing through FBOs. However, he added that for fully owned, airliner-class aircraft the drop in flying activity has been markedly less at around 8 to 12 percent.
Scheeringa has already visited about a third of Signature’s 90 FBOs, 36 of which are outside the U.S. and 22 of them here in Europe. “Our single biggest asset is our footprint,” he said. “With almost 100 FBOs and 10 million square feet of space no one matches this global reach, and our employees have a tremendous amount of energy and local understanding of the customers’ needs and how to help them. We know how to leverage local knowledge on a global scale.”
Signature’s new boss has reorganized the group’s top level of management to rectify what he found to be a disjointed approach that took insufficient account of what was happening outside the U.S. “We are good on both sides of the Atlantic, but we want to be run in a coordinated way. We will take local knowledge and make this network knowledge, taking CRM [customer relationship management] practices to a higher level with a comprehensive database of all the things we need to know and execute against,” he said.
David Best, the group’s managing director for Europe and the Middle East, has been promoted to the new role of chief commercial operator, responsible for all aspects of marketing, pricing, sales and joint ventures. Former GKN Aerospace chief financial officer Mark Johnstone has been recruited to take the same role at Signature and he and Best will be relocating from the UK to corporate headquarters in Orlando, Florida. Signature veteran Steve Lee has taken the new role of chief operating officer.
Scheeringa acknowledged that the FBO business is currently experiencing a tough time, with costs that can’t easily be controlled and declining income from reduced flying activity. “We have not cut staff [in the same proportion] to match the decline in traffic, we pay above market rates and staff our bases heavily to ensure the best safety standards in the industry,” he maintained. “All aircraft are marshaled by three people and they are always coned off on the ramp. This has made Signature a more attractive option for customers and that is why we are performing better than the rest of the market in terms of visits and fuel sales.”
Until recently, Scheeringa was an FBO customer himself through his role at Flight Options, but he said that this gave him the perspective of only one part of Signature’s client base. What matters to him is that all customers enjoy a sustainable and consistent level of service wherever they may end up in the Signature network. This network is not likely to be extended further in
current market conditions, although Signature’s new leader would not rule out further acquisitions.