For Denver-based AeroColorado, business flying led to a successful hangar business.
Oct. 1, 2017
Barely five minutes after a call to the FBO across the field, a tug turns onto the AeroColorado ramp, and three line technicians hop off. The hangar doors open, and the technicians tow out AeroColorado’s Hawker 800, so two Pilatus PC-12s operated by Colorado’s Department of Public Safety can be dispatched for spotting wildfires.
The Hawker gets pushed back into the hangar and hooked up to a ground power unit to download avionics updates. Meanwhile, AeroColorado’s maintenance director preps the company’s own PC-12 for a flight to Dallas.
Aircraft are in constant motion at AeroColorado, a hangar and aviation office facility on Denver’s Centennial Airport. The hangar houses nine airplanes, including the company’s Hawker and PC-12, the two fire-spotting PC-12s, and other tenant aircraft, from a Mooney up to a Dassault Falcon 7X.
The facility was built by Jack McClurg and Lou Hutchison, business partners who sold the company they co-founded, HealthTrans, and as pilots, saw the value of developing airport real estate.
“My involvement in flying led me to buy hangars here at Centennial,” said McClurg. “I started out thinking of just building a hangar and office for our own use, but saw a need for places to store larger aircraft. It became obvious there was more synergy in building a facility of this size, one that would have economies of scale.”
Attached to the large hangar are offices for flight department staff, conference rooms, an exercise room, showers and a kitchen for inflight catering.
“If we had it to do over again, we would have built even more office space,” said Iver Retrum, AeroColorado’s vice president of business development. “The inspiration came from the years Jack and Lou had in aviation. Their company offices are upstairs, and our tenant offices downstairs are full.”
Starting from Scratch
In the 1990s, McClurg started flying a Cessna 182, and later a Diamond Twin Star, from Colorado to Chicago, Dallas, Las Vegas and other cities for HealthTrans, their pharmaceutical benefits management company. In 2007, McClurg and Hutchison bought their first turboprop, a PC-12, and employed a contract pilot, Loren Hofer, from an air freight operation in Albuquerque.
“I was flying for them at least 10 days a month, so I told them, ‘Guys, you need to hire me [full time],’” said Hofer. “When they first bought the PC-12, they didn’t know everything they were getting into.”
Instead of turning to a management company, the partners tasked Hofer with standing up a flight department. “Not only did I need a pilot to fly with us,” said McClurg, “I also needed help managing the aircraft.”
Hofer flew 400 hours in the PC-12 in the first year, so one of his first tasks was pulling together a stable of contract pilots, five local airmen with experience on the PC-12, to fly with him.
With his Part 135 background, Hofer adopted policies and procedures from commercial regulations. He also wrote the new flight department’s manual and set operational minimums based on his air freight experience. A Part 91 company plane needed more flexibility, so for guidance and best practices, Hofer turned to other PC-12 operators he knew.
My involvement in flying led me to buy hangars here at Centennial. I started out thinking of just building a hangar and office for our own use, but saw a need for places to store larger aircraft.
“It’s a little challenging when you don’t have the resources of a full flight department and it’s just you,” said Hofer. “Everything is harder, from pulling the plane out of the hangar by yourself to coming up with SOPs.”
McClurg and Hofer didn’t know any aviation attorneys or accountants, so they turned to NBAA for help with their aircraft ownership structure. “I sought out whatever resources I could,” said McClurg. “NBAA-BACE [NBAA’s annual Business Aviation Convention & Exhibition] was an event I went to over the years, and that’s where I learned about aviation tax planning.”
Adding Their First Jet
In 2011, McClurg and Hutchison sold HealthTrans and each set up new businesses. Hofer continued to fly the PC-12 for both, primarily for the newly formed McClurg Century Investments.
One of McClurg’s first investments was AeroColorado, which brought the company and the airplane under one roof. “I thought that same concept would be shared by other businesspeople who fly out of Centennial,” said McClurg.
By 2016, McClurg’s investing was taking him beyond the range of the PC-12, and he bought his first jet, adding the Hawker 800 to AeroColorado’s operations.
“They don’t overlap a whole lot,” said Hofer. “The Pilatus has incredible operating economics on shorter flights. Up to 700 miles, the speed of the Hawker isn’t enough to really encroach on that mission. But farther than that, the Hawker really starts to shine, with the range and time savings, getting us places we couldn’t go before.”
McClurg started flying to the East Coast more often, and to Puerto Rico, where he decided to invest in a marina and shipyard.
“The ability to go farther led to new business opportunities,” said Retrum. “Jack always has his eyes open, and the Hawker has helped us move into the real estate business.”
Stepping up to a jet didn’t come without complications. Hofer’s initial training on the PC-12 took six days; on the Hawker it was 21. It was his first type rating. “The Hawker’s got a lot more complicated systems,” said Hofer. “But I was ready to learn something new.”
Once again, Hofer turned to other operators for advice. Their first tip: hire a maintenance technician.
“Whether you need maintenance in-house is always a big question,” said Hofer. “We didn’t with just the Pilatus. But when we brought on the Hawker, we absolutely decided we did. The Pilatus is a newer design; the maintenance schedules are grouped together in a simpler way. For the Hawker, the original airframe was designed in the 1960s, so every system is on a different schedule, and it’s almost impossible to keep track of the various schedules without help.”
Hofer hired Tom Mestas from the Pilatus service center across the field. Before working there, Mestas had spent 15 years at a Bombardier service center. “He’s got a good history with jets, and he’s spent a lot of time on the PC-12,” said Hofer. “That was important because we wanted someone who could work on the Hawker and do all our Pilatus maintenance in-house, if possible.”
As AeroColorado’s director of maintenance, Mestas does light work and minor inspections on the Hawker. He also does pre- and post-flight checks on the airplane. For heavy maintenance and major inspections, the Hawker goes into a maintenance shop.
On the PC-12, Mestas does the annual inspection in the AeroColorado hangar, but he brings in help.
“There’s a real good-neighbor policy in this hangar among the tenants. We do what we can to help other technicians,” said Mestas. “There’s so much work to do, so we go to technicians we know, and they’ve helped us tremendously.”
Learn more about NBAA member AeroColorado.
A New Development
AeroColorado was such a successful investment for Jack McClurg that he decided his next project would be a similar facility at Addison Airport in Texas. “The city of Addison heard of us through our development here at Centennial,” said McClurg. “This was the kind of facility they wanted to have on their field.”
Like Centennial, Addison sees a lot of traffic from larger-cabin business aircraft, and is home to a growing number of Part 91 flight departments. Existing hangars at Addison are practically full, so McClurg Century Investments and the AeroColorado team are developing a 16-acre plot on the airport into an FBO, hangar and office facility.
“We’re taking a lot of what we learned in building AeroColorado and putting that into Addison,” said Retrum, AeroColorado’s vice president of business development. “We’ve certainly gotten to understand aviation real estate.”
“If we hadn’t owned and operated airplanes, we wouldn’t have built this building,” McClurg said of AeroColorado’s Centennial facility. “And if we hadn’t built this building, we wouldn’t have seen the opportunity at Addison.”
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Two aircraft are based at Centennial Airport in a company-owned hangar that also houses tenant aircraft.
One Pilatus PC-12 and one Hawker 800.
A chief pilot, maintenance director, hangar business development VP, and a CEO who flies.