Pam & Edmund McIlhenny
McIlhennys Trust Airshare
Pam and Edmund McIlhenny will tell you the numbers don’t lie. For example, the 5,000 Scoville heat units (SHUs) of their family’s TABASCO brand pepper sauce is a truth the average person’s tongue will affirm after just a few drops.
The numbers that really told the story for the McIlhennys came from the proxy statement for the parent company of a national fractional aircraft ownership company that had left them stranded one too many times.
“We looked at their public filings, saw they were cash-flow negative from operations and realized that the company only made money on selling airplanes,” said Pam. “That really made us question the sustainability of their business model,” added Edmund.
“We purchased a share in a jet back in 2000 and for the first few years were very happy with the experience,” said Edmund. “But then they started issuing [charter] cards, which meant that you now had many more people accessing the fleet and even more competition for use of the aircraft. Service went straight to heck.”
Three- and four-hour delays were common and even had their business partner stranded overnight without a change of clothes when his return flight was canceled.
“When you’re flying commercial and your flight gets canceled, you at least have other airlines to choose from or hotels nearby if you have to stay over,” said Pam. “But when you’re flying privately and your aircraft doesn’t show up, you’re really stuck. For what an owner is paying, that just doesn’t make sense.”
Frustrated, the McIlhennys stopped using the jet and vowed never to get into the fractional market ever again.
A Business Model That Makes Sense
The McIlhennys were understandably skeptical when Airshare approached them about re-entering the fractional aircraft ownership market in 2010.
“We vetted them pretty hard,” admits Edmund, noting that the courtship lasted more than eight months before he and Pam “dipped their toes in the water” by purchasing a 1/16th share of an aircraft.
“The Airshare business model just makes sense for us,” said Edmund. “From the fact that they offer turboprop as well as jet aircraft, to their regional operating model, to the fact that the airplane stays with you on the days you have it, they’re really a good fit.”
Airshare’s regionally-based operation greatly reduced the need to reposition aircraft during times of heavy owner demand. It allows the company to make aircraft available on a per-day basis.
“It’s great to have the aircraft for the entire day,” said Edmund, “because if you need to leave a little bit earlier, the aircraft is right there ready to go.”
“We like the one-way pricing option a lot, too,” said Pam, noting that the McIlhennys will often fly one-way from Acadiana Regional Airport (ARA) to Austin, Texas (AUS).
Creative Solutions to Business Problems
Better still, Airshare’s numbers made sense, too.
“They aren’t ashamed to say that they make money on operations and not just on aircraft sales,” said Edmund, “and they make sure that all owners receive the same treatment.”
The McIlhennys take comfort in knowing that the owner experience is key to Airshare’s success, and not a loss leader for aircraft sales.
“The service is excellent,” said Pam. “Their pilots just seem happier with their jobs and we’ve also enjoyed having the same pilot on two of our last three trips.”
“Airshare is a real interesting case study as far as developing a creative solution to a business problem,” adds Edmund. “I really believe this company is going to prosper.”
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