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MARCH 2015

BUSINESS AVIATION

44 MARCH 2015 AIRCRAFT MAINTENANCE TECHNOLOGY

AT THE BEGINNING OF THE RECESSION, MANY BUSINESSES

were downsizing their operations, laying off employees and, in

some cases, closing their shops all together. Threshold Aviation

Group (TAG), based at the Chino Airport in Chino, CA, is an

example of an aviation business that not only kept their shop

open, but continued to grow, despite the recession.

TAG is one of the largest maintenance and management

facilities in Southern California, with more than 150,000 square

feet of hangar and office space and a 7,000-foot runway. It’s a

member of the National Business Aviation Association (NBAA)

and its charter company, Threshold Air Charter Inc. is Gold

Rated by ARGUS International, Inc. TAG also operates an

FAA-approved Part 145 repair station, and is authorized to

maintain and repair nearly any aircraft.

TAG’s full-service aviation business services includes execu-

tive terminal facilities, fuel services, hangar storage, aircraft

maintenance and interior shops, aircraft management and

operations, as well as aircraft charter services. The group con-

ducts business jet completions, modifications, interior repairs,

and avionics upgrades. TAG has an active aircraft acquisition

and sales department as well.

During the recession, TAG grew its operation due to its

low-cost structure. Compared with its competitors located in

the Los Angeles and Orange County areas, TAG’s always less

than other operators. TAG’s focus and emphasis on its cus-

tomers has made it the premiere aviation service provider in

Southern California.

HOW TO SURVIVE A RECESSIONThreshold Aviation Group not only kept its facility open but continues to grow

Though TAG pays the same for fuel that everyone else

does, the FBO keeps is fuel costs lower — as much as $2 a

gallon lower —than the competition. “It’s simple — we try to

support the flying public,” says Doug Crowther, director of

business development. “It’s tough these days for folks to fly

their airplanes because fuel is so expensive.”

In order to keep the cost of its aviation fuel as low as pos-

sible, TAG utilizes a narrow yield model to stimulate sales.

The company sells over 1 million gallons of avfuel each year,

demonstrating the validity of its business model.

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ALL IMAGES COURTESY OF THRESHOLD AVIATION GROUP

Crowther says this philosophy pays off in spades because

it brings more airplane owners to the facility, which in turn

brings more work to the maintenance facility. “It gives us

access to customers who already think positively of us, so that

we can sell them services in addition to fuel,” he says.

One of the unique aspects of TAG’s operation is its business

model that includes the flipping of aircraft. Over the last 15

years, it has purchased more than 50 aircraft from around the

world, brought them to its facility, completed any required

maintenance and repairs, refurbished the interior, and given

the aircraft a fresh coat of paint. And then sold the aircraft

at a significant profit.

“That’s been a real help to us during the recession,” he says.

“As airplane owners sold their planes, we purchased them,

performed whatever work they needed, and resold them.”

Crowther says it helps that the facility offers full-service

upholstery and wood shops in addition to the maintenance

side. “We can repair pretty much anything, even a replace a

small piece of scratched up wood,” he says. “And it’s cheaper

to do it with us than with other FBOs.”

EMPLOYEE FOCUS

TAG employs 65 people, including maintenance technicians,

upholstery, and wood artisans as well as customer and line

service personnel. Recently, the company has been consistently

hiring one to two new workers a month. The trend is expected

to continue as the workload continues to grow.

Little turnover takes place because working conditions

favor the employee. Employees are compensated well, as

pay is based on experience. All employees receive benefits,

such as full medical and dental. Overall, employees enjoy

the management who are constantly bringing in new aircraft

and projects that improve their current skill set and teach

them new skills.

“We treat our employees like family,” says Mark DiLullo,

founder and chief executive officer of TAG. “We strive to make

our operation a better place by listening to our employees,

our customers, and our neighbors.”

In order to find highly skilled, qualified mechanics, TAG

partners with two local colleges to train new technical people.

Once new mechanics are trained, the company provides them

employment while they gain hands-on experience.

TAG manages several aircraft. As part of the aircraft man-

agement, the aircraft fall under TAG’s fleet insurance policy.

TAG manages, maintains, stores, and operates the aircraft for

the aircraft’s owners. At the owner’s option, Threshold Aviation

Group can place the aircraft in its charter department, which

generates revenues for the owner when they are not using it..

TAG has completed high-profile work for government

agencies, including NASA’s Glenn Research Center, located in

Cleveland, OH. TAG and its contract partner were contracted

to heavily modify one of TAG’s Gulfstream aircraft, with

the installation of wing-mounted pylons carrying scientific

instrumentation, as well as radar units on top and bottom of

the aircraft. TAG was to operate it for NASA for a three-year

period. After 18 months modifying the aircraft, sequestration

cancelled the program.

COMMUNITY MINDED

Because of their successful operation, TAG has been courted

by cities in other states that desire Threshold to relocate its

operations.

“Even though we could have relocated to another state, like

Nevada, we chose to stay in Chino. All of us at Threshold are

Continued on page 47

TAG’S FULL-SERVICE aviation business services include

executive terminal facilities, fuel services, hangar storage,

aircraft maintenance and interior shops.

BUSINESS AVIATION

46 MARCH 2015 AIRCRAFT MAINTENANCE TECHNOLOGY

WITH A SLOW RECOVERY FROM THE

Great Recession, aviation firms were

forced to seek new and more creative

ways to complement their business.

Threshold Aviation Group (TAG) was no

exception. In order to survive in a tough

business environment, TAG began

purchasing jets and other aircraft that

needed repair, with the idea of flipping

them for a profit.

We found aircraft in Europe, pur-

chased them and brought them back

to our fixed based operation (FBO)

and repair station located in Southern

California at the Chino Airport (KCNO).

Our maintenance team has success-

fully worked on repairing these aircraft

and returning them to a near original

condition. Once the 0002074-aircraft are

repaired and refurbished, they are sold

to interested buyers at very attractive

prices.

One jet our team flipped was a

CJ-3 from Germany, which had a blue

juice leak that was suspected to have

migrated through the fuselage to the

wing. When the original owner took the

CJ-3 to be repaired in Europe, the repair

station estimate included removing the

wing, in order to gain access to the belly

of the aircraft. The estimate included a

substantial amount of repair and reme-

diation work, including the possibility

of replacing the wing. The estimated

cost of the work order was quoted at $3

million, mainly due to corrosion. After

debating whether or not to repair the

aircraft, the owner finally decided to sell

the CJ-3 and collect the insurance for

the damage.

Threshold Aviation Group pur-

chased the jet and ferried it to its

100,000-square-foot maintenance facil-

ity at the Chino Airport. Eight full-time

mechanics worked to repair the wings

and belly of the plane for four months.

Because no repair facility other than

Cessna had previously completed this

type of repair, we had to create the tech-

nology and tooling to support the wings

and the fuselage. Our shop created

jigs that allowed the fuselage to rest,

while another set of jigs held the wings

intact. Care and precision were needed

to ensure the fuselage remained intact.

Any small slip up could lead to damage

to the wings and the fuselage, leading to

an expanded repair time and additional

costs. It would also make reassembly

almost near impossible.

During the wing removal, we found

unexpected damage that was unrelated

to the blue juice staining: The doubler

near the back of the wing had a 13-inch

crack in it. Our maintenance technicians

believe this transpired because the

doubler was installed incorrectly at the

factory. When the manufacturer initially

installed it, the doubler was overtight-

ened, placing a heavy load on the dou-

bler, resulting in the crack. Our mechan-

ics replaced the doubler and engineers

at Cessna were notified of the finding.

Verifying whether or not corrosion

existed was a top priority of our team.

Once the wings were removed, the

mechanics used Q-tips to get into every

tiny nook and cranny in order to ensure

the blue juice stains were removed. It

took eight full-time mechanics 2,000

hours to ensure every square inch of the

fuselage was carefully inspected. To our

surprise, very little corrosion was found.

On the areas where corrosion was

found, our team utilized a number of

techniques to remove the corrosion. We

started with the largest pockets of cor-

rosion and carefully removed the corro-

sion with a power sander and by hand.

The Threshold Aviation team reas-

sembled the aircraft and installed a new

set of landing gear. It took six mechanics

to slide the wing back under the belly of

the jet. Once the CJ-3 was reassembled,

our in-house FAA inspector inspected

the jet. Thanks to the skill and expertise

of our team, the CJ-3 passed the inspec-

tion with flying colors. With the aircraft

in pristine condition, Threshold Aviation

Group was able to quickly sell the CJ-3

and earn a profit.

Of course, we didn’t stop there. This

past year, Threshold Aviation Group

purchased seven “maintenance chal-

lenged” business jets in Europe, brought

them to our facilities and completed the

required repairs. Over the past 15 years,

we have bought, repaired, refurbished,

and sold a total of 50 aircraft. On top

of completing the required repairs, we

also refurbished the interiors, touched

up the jets’ paint and sold them, again,

at a substantial profit. Whenever our

team flips an aircraft, we go above and

beyond the repairs that are needed. We

also make sure the aircraft is cosmeti-

cally and aesthetically pleasing; after all,

owners want more than a jet that flies.

Threshold Aviation Group began

acquiring aircraft for repair and resale

as a means of keeping the business

afloat. Flipping aircraft was a means to

keep our valued employees busy and

employed. It even allowed us to increase

our maintenance staff. Although we

began flipping aircraft with a short-term

business mindset, it has become a per-

manent part of our business model.

After the success of the CJ-3 project,

finding new flipping opportunities has

now become one of my favorite aspects

of the business. Finding new aircraft to

OVER THE past 15 years, TAG has bought, repaired, refurbished, and sold a total of 50 aircraft.

FLIPPING ISN’T JUST FOR HOUSES; IT’S FOR AIRCRAFT TOOHow one aviation group is revitalizing the aviation business

MARK

DILULLO,

chief executive officer of Threshold Aviation Group.

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www.AviationPros.com | www.AMTSociety.org 47

repair has given the members of

our maintenance department a

welcomed variety and flexibility

in their schedules, provided them

the opportunity to expand their

respective skill sets, and allowed

them to work on challenging proj-

ects. Furthermore, it has allowed

me to find projects and repairs

outside of our normal scope of

work. Having to be creative and

innovative is what sets TAG apart

from other FBOs and repair sta-

tions in the area. Our clients know

that no task is too big or too small

for our team.

Our FBO and repair station is a

leading provider of maintenance

and maintenance related services

in Southern California. Because

of our outstanding reputation in

the region, aircraft owners from

around the country have sought

out our maintenance and repair

expertise. Our services encompass

private jet management, charter

aircraft, aircraft maintenance,

inspections and overhaul, aircraft

on ground (AOG) services, busi-

ness jet completions, modifica-

tions, avionics, fueling services,

and aircraft acquisitions and sales.

Each year, TAG sells over 1 million

gallons of aviation fuel, supplied

by Avfuel, and contributes an

estimated $15 million to the local

economy. Because of this incred-

ible range of services, we are more

than equipped to flip aircraft – but

smaller FBO facilities can flip air-

craft, too. If you are an FBO that

has a smaller range of services,

your facility can flip aircraft on a

smaller scale.

Like many other aspects of the

aviation industry, flipping jets can

be a goal that is achieved after

starting out with a smaller ven-

ture: flipping small, single engine

planes, for example. Every FBO has

to do what makes sense for the

scale of its services.

— By Mark DiLullo

highly invested in our commu-

nity,” says Tom Bressan, chief

operating officer. “Our staff

works and lives in the Inland

Empire. We pay taxes here.

Some have lived here their

whole lives. We are extreme-

ly happy to contribute to our

community.”

In December, TAG signed

new leases with the County

of San Bernardino to con-

tinue renting the facility at

the Chino Airport. The lease

agreement is for 10 years, but

can be extended for an addi-

tional 10 years.

As a general rule of busi-

ness, the company keeps all

vendors and employees local,

which helps stimulate the

local economy via tax dollars.

TAG contributes an estimated

$15 million annually to the

local economy.

The company has been

recognized for its Christmas

Hope, Love & Charity event,

where it provides an annual

Christmas dinner for families

in need. TAG partners with

the Chino Police Department,

Chino Valley Fire Department,

and Mooney International to

make this event possible.

Along with the Christmas

dinner, organizers make sure

every child leaves with a toy,

books to read, and crafts to

complete.

“This is an event Mark and

I look forward to every year,”

says Lisa DiLullo, president

of Threshold Aviation Group.

“The Hope, Love & Charity

event allows my family, friends,

and staff to give back to the

community we serve. We are

blessed and grateful to be able

to help out our neighbors in

their time of need.”

This past year, more than

3,000 meals were served, 2,000

of which were to children.

Each family left with boxes of

canned food for future meals.

Over 2,000 books and toys

were given away to children

and 75 bikes were raffled off.

Kids were also able to take

pictures with Santa and Mrs.

Claus.

TAG CREATED jigs that allowed the fuselage to rest, while another set of jigs held the wings intact.