Chapter 19

Atlanta – Friday - DAY TWELVE –

When the luxuriously equipped CS&S Lear 60XR carrying the four nurses landed at the Atlanta airfield, it taxied across and stopped between the Air Ambulance and Belair hangars, then swung around as if for a quick exit. The girls wanted to show the aircraft off to their friends however, and the pilots had been briefed by Betty to do this, so he made no objection.

They were quickly joined by everyone from the two hangars, who were soon oohing and aahing over the expensive interior and unique artwork outside. John Williams was staggered when the pilot explained, and that this aircraft, three others like it, and nine 737-700s had been recently purchased by CS&S from a member of the Saudi Royal family.

After the aircraft left, while Archie and John stood on the apron discussing what they had seen, all the Air Ambulance staff gathered in their crew room. They quickly decided that they would all like to transfer to Lutz and work for CS&S; now they just have to persuade Archie to sell.

However, it wasn't necessary, because Archie saw it as a no-brainer and had been working to persuade an already convinced John to come with him to talk to Chuck, provided he would see them. Archie called the number that Chuck had given him, and arranged for the three of them to meet at Lutz at 1130.

CHUCK - Lutz

I had been thinking about the opportunities that owning an air ambulance company would give me, as well as all the ill and injured people that I could help. I had been very impressed with the way Archie had redesigned much of the equipment I'd been shown on the impressively laid out Bravo. It was, I thought, better equipped for its size than any others I had seen. If I could get Archie to move down to Lutz, he would fit in very well with Wes and Dennis, and we might have a brand new business there, as well as being able to build enough conversions to position our own air ambulance aircraft at all our bases. We should not only be able to offer better equipped aircraft, but also undercut our competitors' prices, which reminded me that I need to ask Ben if he has managed to talk to the oil companies yet, so I called Ben's cell.

"I have indeed been making really good progress here," he reported, "One of the larger Texas oil companies and an international giant are really interested. I think they are calculating that if and when we want to sell off our next block of proven Mexican oil wells, they could have leverage over their competition. I've been able to play one off against the other, and significant discounts are already being offered. They have conceded that CS&S can sell cheaper fuel to customers from our existing bases, as well as from any new ones. However, if associated companies are to be included in the deal, CS&S, or you personally, must own at least 40% of the equity for them to qualify. I think this last point is non-negotiable."

That gave me a lot to think about; Steve would be fascinated to hear all this. I called him and was told that they were on their way to Lutz for the big meeting this afternoon. That would now take place later than we'd planned, as Dewey was coming, and stopping at both Spring Field and The Junction for a quick look on the way in.

Wanda then called to ask if I was coming into the station, as there were a few things she could not decide on her own, and I was halfway there when Archie called and asked if he and John Williams could fly down to talk to me. As the big meeting had been pushed back until later, I invited them to come down when they were ready.

When John Williams' old Learjet 28 landed, Steve and his party from The Junction had just got in. He was talking to Wes and Jimmy, and they had to stop as the noise the aircraft's reversers made drowned everything out.

After the Lear's engines had been shut down, Wes remarked to Steve that he could certainly design mufflers for the engines, but he wasn't sure if the resulting loss of performance could be offset by adding winglets. Maybe the girls in the engine shop could rebuild the turbines to make up the difference. Steve was fascinated at the idea, and said that it was worth trying. Anyway, we could easily find an old Lear to experiment with.

I welcomed my two guests and introduced them to Steve.

Once we all had cups of coffee, I invited Archie to begin.

"The four nurses have convinced everyone of the benefits of working at Lutz," he explained. "They were even very excited about life in the trailer park, so I'm prepared to accept your offer to buy the business."

I quickly filled Steve in on my conversations with Archie yesterday, then started explaining the ideas I've had about outfitting a series of the larger Citations as air ambulances and stationing them with crews at each of the CS&S bases provided, of course, that Archie thought he could sell the concept to his insurance company contacts. Lutz should also be a good base for Caribbean operations; I remembered that quite a few American's on vacation became ill or were injured down there and had to be brought home.

At that point, Archie started getting really excited.

"I'm sure the consortium I've been working with will go for the idea, provided the costs are right," he told us, "They've already given me a full contract for the new Bravo."

"Given our charter experience," Steve remarked, "This should not pose a problem.

Anyway, if the rebuilds were done by our people here at Lutz, the capital costs will be far lower." Archie was grinning broadly when I turned to John.

"What can I do for you, my friend?"

John quickly described his present operation for Steve's benefit.

"My most pressing problem at the moment concerns my largest customer," he told us. "They are a medium-sized package freight operation who subcontract all their feeder work. I've successfully worked with them for 6 years, but they are now getting quite a few complaints about the noise the Lear makes from people living close to the airfields I use. This has forced my customer to issue an ultimatum; replace the Lear or lose my contract. So the Lear will have to go, and since I'm only just getting by at the moment, financing a replacement is a real problem.

"I'd like to move my base out to a small country field on the road to Marietta. From there, I'm confident that there's room to continue operating profitably, and perhaps even for some expansion. This is especially so if I can acquire a couple of small freight aircraft. My two Pipers aren't really good for this sort of operation, and they're earning their keep in the passenger charter role anyway."

I smiled at Steve, knowing that he wanted the Lear.

"Why don't we buy the Lear, "I suggested, "Or maybe do a swap? The problem with the Lears is that they require two pilots to operate legally. We have an Embraer Phenom 100 that might be just the thing; you have to take a look at it. It's a bit smaller, slower, and has a shorter range than your Lear, but it's a nice aircraft to fly, and would be a lot more economic for you to operate. I think that's probably the aircraft for you.

"The move out toward Marietta is certainly of interest to us, as Atlanta is an obvious future move for CS&S; would you like to investigate that further, John?" I asked. "There's one aspect that I should mention, and this will be news to Steve, as well. Steve's father-in-law is in the process of negotiating a cheaper priced fuel deal with some oil companies, and he tells me that he's getting some very positive interest. Quite significant discounts are already being put on the table, but one thing is definite; for other companies to participate, CS&S will have to take a minimum of 40% equity interest.

"Does what I'm outlining appeal to you, John?"

John agreed that it did, but that he'd need to talk to his brother who had a small number of shares in his company.

Archie and I needed to discuss the nuts and bolts of our new deal, and we left John a happy man to make his phone call.

I took Archie the long way around to the hangar where Wes was currently performing his magic. I wanted to find Jimmy first, and on the way, I took our guest for a quick guided tour through the various hangars and other buildings. Archie remarked that he was impressed with all the clean bright buildings, and was now absolutely certain that he had made the correct decision.

Both Wes and Jimmy were very interested in what Archie had to say, even more so when I told them that they were to set up a shop to convert Citations into air ambulances. The three of them were soon deeply involved in working out what would be required. When Archie went on to talk about some problems that he had yet to solve, like getting some equipment small enough to fit into the small fuselage of a Citation, Wes phoned Dennis and suggested that he come out to Lutz, as he, Jimmy, and a new man needed the help of S&S R&D.

I left the three men deep in their deliberations.

The big meeting was now scheduled to start at 1700, as Dewey's flight was delayed. It was being attended by all the senior CS&S executives from across the country.

Following a request from Steve, Crystal and Bear, with Jimmy's dad, had just arrived on a scheduled flight from Hawaii into Tampa. Dewey had picked up all the senior staff from Spring Field and The Junction, plus DeDe who had caught Pete's shuttle out from LA early that morning. As soon as Pete Williams heard about DeDe's contacts with the local FAA officials, I was told that the two of them had their heads together for most of the two and a half hour flight.

Dewey had paid a flying visit to each location and had been given a quick tour. They had all spent the trip discussing what had been happening, and the different problems they faced. Dewey was fascinated and confessed that maybe he should get more involved with charters. At the moment, although he owned 10 aircraft, he subcontracted the management out. When Georgie told him that her friend, Jennie, had left the Seattle agency he currently used, and now worked with Star at Spring Field, he realized that an immediate decision was probably needed since Jennie was the person he always preferred to work with.

As soon as Dewey's G-5 landed, I took Bill to one side to discuss the market for aircraft, and Dewey was soon deep in a discussion with Ben about fuel prices. I was much more confident where this evening's meeting would go after this, and I invited John and Archie to join the CS&S executives.

I quickly counted up the numbers, and realized that the crew room we normally used for meetings was going to be too small for the 38 people attending, so I arranged with Betty to take over one of the passenger lounges. She promised to get this quickly organized.

As the time for the meeting approached, people began congregating in the larger of the Lutz passenger lounges, getting cups of coffee or iced tea, and chatting in groups.

I entered with Steve, and asked everyone to pull their seats around into a large circle.

Then I began.

"Thank you for coming everyone; some of you on short notice. The reason for this meeting will shortly become apparent, but so much has been happening in the last two weeks, that I want to keep everyone up to date, and give you all the opportunity to comment and make suggestions.

"First, there are a lot of new faces, so I am going to go around naming each person. Please stand up when I call your name. First, on my left, Steve Sharp, owner of S&S, and one of the owners of CS&S, together with me and your 401K plan. On his left are the financial wizards who make sure we don't make stupid decisions. They are Tiny, Henry, Bart, and Marty; the latter two are responsible for my own personal operations. Next to Marty is Steve's father-in-law, Ben, our principal attorney, who tells me that he has some great news on the price of our fuel.

"Then we have the Lutz contingent; John, who is now the General Manager of CS&S, and Jimmy, our Maintenance Manager, with his No 2, Jake Brewster. We mustn't forget Tank, who runs our rotary operations here. Then there are Betty, Charlotte, and Sookie who make sure the charter aircraft and crews leave on time, and Wes who runs our aircraft manufacturing operation. On his left is Terrell, the head of S&S Construction, who is really busy extending your runways, building more hangars and the necessary infrastructure to allow us to properly operate. By the way, Terrell, I think we need another four hangars here at Lutz.

"Continuing, we have the Spring Field contingent, led by Star. Sitting alongside her are Bill and his daughter, Georgie, who I haven't even met yet. Welcome, Georgie. Then there is Bob Packer, her new Chief Pilot. Next to him is DeDe, currently running our new airline, Halcyon, in LA, and who is handing it over to Carlos Rodriguez today. He's the man on her left.

"I'm pleased to announce that when DeDe is satisfied that she has Carlos firmly in the saddle, she is coming back here to Lutz and will become John's Assistant General Manager and trouble-shooter.

"Next, we have Kurt, who is running our base at The Junction and Doug Schaeffer; these two are going to supervise all our 737 operations. Also from The Junction, I'm delighted to have Cindy, the new Airfield Manager, Pete Williams, and Jack Smith, another new face and a man who I haven't met. I'll come to their role shortly.

"From Hawaii we have Crystal and Bear who not only run CS&S over there, but also supervise all the S&S operations on the Islands, together with their Maintenance Manager, who also happens to be Jimmy's dad.

"We are almost there. Sitting by the Hawaiian contingent is Dewey from Seattle. He is Steve's and my partner in a number of tourist resorts around the world, and also owns a few aircraft. Then there are six more new faces. Archie, who is a medical doctor, as well as a pilot; I have just agreed to buy his air ambulance operation in Atlanta, which we will be expanding and moving here to Lutz. His companion, John Williams, is also from Atlanta where he has a small air charter outfit."

There was a buzz of interest, and after taking a drink of water, I continued.

"You all know Lisa. At the moment, she has been looking after our HR affairs, and next to her is Bruce Rogerson, who joins us as head of HR starting today, so if you need more staff, he's the one to see. That's only been one of Lisa's duties, and in future, she will also be deeply involved in a new area for us, namely security. These other four gentlemen have joined us to directly oversee this vital aspect of our businesses. I'm afraid that from now on, it will be increasingly important. First, we have Buster Isaacson; his sidekick, Mac Melville can't be with us as he is already at The Junction investigating a problem there. Both these two are highly qualified pilots, and also security specialists. Buster reports directly to me on all security aspects, and has direct command, assisted by Mac, of all the specialized personnel we are currently hiring. On his left is Colin Mackenzie, a recently retired Marine Top Sergeant. He commands the new Marine Guard Force, together with Siggy Haraldsen, who until this week was a USAF Air Police Master Sergeant. Airfield security is a specialized business.

"Now, some of you are aware that we were warned earlier this week about direct threats to CS&S from both terrorists and International crime syndicates. I have since been informed that this is a reality, and with the active assistance of Federal Security sources, I am putting measures in place that I hope will successfully protect you, our other employees, and our now very widespread operations.

"Buster will be based here at Lutz, as will Colin and Siggy. Feel free to speak to them any time you have ANY concerns. I've already had to send Mac to The Junction, which we currently believe is the next most threatened location. He is a rotary aircraft specialist and will supervise those operations there.

"This is a three tiered setup. Again reporting to Buster, we have five four-man teams who will each be responsible for security at one of our five locations. Heed what they say, and again, feel free to talk to them at any time. These teams are currently undergoing further training here in Tampa, and I hope will be in place within the next 7 to 10 days. By the way, Washington has approved them all being sworn in as Deputy Marshals.

"The last tier is the Guard Force that I mentioned earlier. They will all be Marine veterans, and their job will be to guard your installations 24/7. We are currently hiring these men. Teams will be located here at Lutz, Spring Field, The Junction, and in Hawaii. All will be led by retired senior Marine NCOs, assisted by Air Police Sergeants. At the moment, we do not anticipate having any with Halcyon in LA".

"Yes, DeDe?" She had raised her hand.

"We already have a definite problem with the outside security firm who are supposed to guard and patrol our hangars. They say it isn't necessary, although they are contractually bound to do so, and the airport authorities won't do anything about it," she explained.

I turned to Buster.

"Buster, I want Mac to go as soon as possible to LA. He is to arrange an early meeting with the President of the Airport Operating Company, and he must take Carlos, Jesse Nicholls, the LA Marshall Station Chief, and the Bureau SAC with him as well. If the airport people won't get the present security outfit in line, or failing that, change them for someone who will, you are authorized to inform them that unless this immediately gets taken care of, the FAA will temporarily suspend the airport's operating license."

There was a hush as everyone looked at each other. They were all wondering if I really have the power to do that, ... Then they realized that I obviously did.

I then moved on to the next item on my agenda.

"Before I ask all the General Managers to report; it will save time if I run through the list of new aircraft you've all heard about. Bill has been doing a fantastic job.

"The G550s and Lears he got for Spring Field, I hear have been earning their keep every day since they arrived. There are another four G550s and some Lears that will soon be ready for delivery, and I propose to assign all these to The Junction. You have all heard about the deal I made with the National Guard in Denver. Star, I know that you have been keeping all these helicopters busy, but I'm afraid that I am going to take away two of each. I want to station one Chinook and a Hawk at Lutz, and the others at The Junction. I want the Lutz Chinook converted to the full civilian spec for a 234MLR, please Jimmy, but before you do that, I want Wes to design and make two sets of pallets for the other two aircraft, one for luxury seating and the other for the tourist type. Please can you get started on that, Wes?"

Bill handed me a paper.

"Thanks, Bill. As many of you know, a couple of weeks ago, Bill and Steve placed bids on 13 aircraft listed on the Federal Disposals Auction Website. They later added bids on 9 more. The economy is so poor that we won them all, and there apparently was only one other bidder, who soon dropped out.

"All of these went to Spring Field, and I'm told Jennie wants even more? Star, are there any that you don't need and can share with the rest of us?"

Star glanced at Bill before replying.

"There's one that you bought in that deal with the Pastor, the Lake LA-270 Amphibian that I can't see us using. There are also Gunter's two Pipers..."

She looked around,

"They are a Seneca V and a Malibu Meridian, which any of you can have if you want, and I recently took a Fairchild Merlin 300 as part of a deal, which is not being used at the moment."

"Thanks. Kurt, you can have the Pipers and the Merlin," I continued. "I think we could probably sell the Lake down here in Florida, so please get a ferry pilot to bring it over.

"Now, there are a lot more aircraft that have been listed for auction in the last two days. According to Bill's list here, there is a large number of small airliners and seventeen helicopters that are available. Most of these have to be seizures, but the type of aircraft and the numbers are surely unusual, so I suspect we can thank the Internal Revenue Service.

"No ATRs, please, Bill; I don't like the concept of stopping the right prop and using that engine to power the electrics.

"There are seven of the big Bombardiers here. Three Dash 8s (2 are Q300As, and one Q400), and some CRJ 900s, two LRs and two Xs. Could you use these in Halcyon, DeDe?"

Both DeDe and Pete Williams said yes at the same time. I let this pass, but they were obviously up to something, and were going to have to explain what later. Carlos looked interested.

"There are also eight Embraer airliners, ranging from a couple of Brasilias, all the way up to a 195, and also a pair of Fairchild 328 jets. I don't think we can use these in our present setup, Bill, but I think we had better bid on these anyway. There are three Gulfstream C-20s, those are military G-IVs. three Citation XLSs, all these will go to Archie's team for outfitting. Also there's a Bombardier Global Express, an XRS no less."

Betty sat up straight, so I invited her to speak. "We've had a lot of requests from two very big companies to quote for direct charters to Sydney, Australia and Tokyo, Japan, as well as other Far East destinations. We've done the arithmetic, and Tiny has looked the figures over. I was going to ask for two 737-700ERs, but one of those and a Global Express would be even better."

There was a quiet "I agree" from Tiny.

"OK", I continued, but I was interrupted by Star raising her hand.

"Can we have the two Brasilias to add to our small fleet which Jenny is keeping really busy flying groups of gamblers up to Reno? She can easily fill these and more."

"Right, the two Brasilias to Spring Field. Now, where was I?

"There are also nine Bells listed here, ranging from some 206Ls, through 412s and 427s, to a 430. I think we'll have all of those. These others look good; three Sikorsky S-76s, those are just what you want to extend your shuttle, Pete, AND four of the S-70 Hawks.

"Crystal, can you use these last three to extend your Island Shuttle?"

"Oh, yes," she immediately replied.

"Betty, what are the stats on our rotary charters? How many people request a club-type aircraft rather than one with 'tourist' seating? Didn't you tell me that it was roughly three to one? OK, let's try for that balance throughout the fleet.

"I think that's all on the aircraft front, so would you like to tell us next about the new fuel offer, Ben?"

Ben looked around, broadly smiling.

"I have received a formal document today that contains a greatly improved offer," he told us. "There is also an expiration date by which we have to accept or reject it.

"They are not only offering a very good basic discount, but it now also has step increases as the volume of use becomes greater. It increases quite sharply, I might add. If CS&S is the base or airfield owner, we are permitted to sell to any visiting aircraft, however any other company must be at least 40% owned either by CS&S, or CHUCK, PERSONALLY, to get all the benefits. I take this to mean that they have discovered that Chuck was the one who hired all the drilling rigs operating off the east coast of Costa Rica, which found the wells that are now producing commercial quantities of oil.

"I have done some research, and this deal is as good as many of those they have with a number of the bigger airlines."

"How long is the contract for?" Steve asked.

"Three years, with no limit on the permitted number of gallons," replied Ben.

"You would advise us to sign, then?" I asked.

"Oh, yes," Ben enthusiastically replied. "It is significantly better than your existing contract, and that already gives you an important operating advantage over your competitors."

"What you're saying is that I've now got to sell 40% of my aircraft company to Chuck," Dewey quipped.

I shook my head, then invited Lisa to speak about personnel.

"Two weeks ago, our Government announced that it was discharging 'several dozen' pilots from the Armed Forces, together with an equivalent number of trained aircraft mechanics," she began. "A couple of days later, we advertised for applicants in both categories. We have already hired some, but as of this evening, we still have 74 fixed wing, multi-engine pilot applicants, and an additional 75 from pilots who are qualified on both fixed and rotary wing aircraft.These figures include 24 qualified instructors. Applications from rotary only pilots are just as good; 72, including 15 instructors. The figures for applications from pilot mechanics are as follows. Fixed and rotary: 23, fixed wing only: 26, with 21 rotary only. We've also had applications from another 80 qualified mechanics."

"I think that is extraordinary," I commented. "There are far more applications here than we are likely to need for a long time. I know that we have recently been able to find flight crews for all the 737s, but we need permanent crews for every one. Also, do not forget that the Civil Reserve Air Fleet regulations require participants to maintain 4 full crews for each aircraft dedicated to the fleet. Now I know that we have so far only received an initial verbal approach on this subject, but we are receiving so much Federal help at the moment, and this is likely to increase, not decrease, that we will find it difficult not to put some of our aircraft in the fleet when asked.

"In view of all this, Lisa and I have been having discussions with the Federal Employment Agency, exploring the possibility of starting a dedicated employment organization to help these people find work. We hope to get Federal financial support to run this. Bruce Rogerson, who is a friend of Carlos incidentally, has agreed to set this up for us on top of his new duties. Anyway, let him, or Jane his assistant HR lady, know your numbers."

John Truant summed up this part of the discussion by saying, "That's really good, especially that we now have our own full-time HR persons here at Lutz to take this part of the load off Ruth's shoulders. I think you have an HR girl in Hawaii, and we should hire some for both The Junction and in the Valley. We also need to hire additional ground personnel at each location; I'm talking about nurses (we've now got an ER specialist at Spring Field, and she is already earning her keep), crash/fire crews, aircraft cleaners, and many more."

I just said, "Do it, get it done."

I then glanced at the clock.

"I think we should now take a break before hearing from Kurt and Doug about their Golf Tours proposals."

Ten minutes later, I called everyone together again and asked them to be seated. I then nodded for Kurt and Doug to continue.

"Golf Tours as we are still calling it, was founded to give golfers from the West Coast an opportunity to play on the wonderful courses in Hawaii, and of course, to fill beds in our resorts," he began. "But, after the purchase of what is now a total of eleven Boeing 737-700Cs, Chuck became concerned that these were not being used cost-effectively, and hired me to run this part of the CS&S business. When he assigned Doug here as my Chief Pilot, we really got down to studying the problem. Our challenge is to keep all the aircraft flying and profitable, as well as to operate a tour service to Hawaii.

"Our first job was to examine the market. I don't think it was realized just how many golf clubs there are in California alone; there are, in fact, several thousand, and if we could get a group together from each of these to spend a week enjoying the Hawaiian golf courses only once a year, you would have to build many more resorts. We have not been marketing the concept hard enough, and Phil, your chief salesman here in Tampa, is taking this in hand and hiring sales teams to support us.

"But we already have a problem; not enough beds in Hawaii. Phil is confident that he can build numbers up quickly enough to keep four or five aircraft busy from both San Francisco and Los Angeles. He considers that there is so much potential that we are likely to be able to bring even more aircraft into the tour operation quite soon. I will come on to this part of our proposals in a minute, but first I want to talk about the Northwest.

"Mr. Dewey already has a 737 in place, and although we think that we can provide a lot of golf tour work for this aircraft, in the longer term it is likely that this one aircraft will be sufficient on its own

"We have spent a lot of time examining all the options to allow us to operate very efficiently in California. In the north, Spring Field is a nearly perfect location to service the area around San Francisco and the northern part of the state, but it is not a cost effective base to cover southern California too.

"The high price of doing anything that's cost efficient and realistic in the area around LAX is getting worse by the minute. I even include landing fees for quick pickups. The Junction will provide an excellent operating base, but our real problem has been how to get our customers there cheaply enough. We have considered feeder services using both fixed wing and helicopters, and various other alternatives, but until we came up with a new idea, none of these were all that attractive.