Patrick Margetson-Rushmore recalls the parts a half-forgotten business card, flying lessons, a Nissen hut and two growing families played in creating Luxaviation UK
In 1996, Patrick Margetson-Rushmore, George Galanopoulos and George’s future wife Amanda, founded London Executive Aviation (LEA). In May 2014 the company became part of the Luxaviation Group and began trading as Luxaviation UK in 2016. Now an important component in one of the world’s largest charter providers, the company had an unlikely origin, as Margetson-Rushmore explains.
“I was working in London in corporate finance and it was pure luck that George and I met. My girlfriend – now my wife – knew I’d enjoyed flying gliders and Chipmunks with the Air Cadets and Combined Cadet Force at school, but I’d thought nothing more of it until years later when she bought me a flying lesson. I was working silly hours and I needed an instructor who’d be happy to receive early phone calls and deliver early morning lessons.
“We were living in Chiswick and I’d call my instructor, Kim Wiley, at six, or even five thirty in the morning and say: ‘Weather looks fine, I’ll see you there’. Then I’d jump in the car and drive around to Stapleford, have the lesson, then go into the City; I qualified for my PPL two years later. Subsequently, Kim’s friend George Galanopoulos, and his girlfriend Amanda, wanted to meet with someone who could put together a business plan and help them look at funding possibilities. Kim remembered me, searched his pockets, found my business card and called me to explain.”
Galanopoulos was a commercial pilot operating out of Stapleford. The two men met, then, along with Amanda, invested money in the business that became LEA, before launching on 1 April 1996, after a year’s preparatory work. Diving into an aviation venture from an apparently secure career in the City ought to have made little sense, but Margetson-Rushmore says: “I was also a partner in the corporate finance department of an accountancy practice, but I suffered a back accident and had to give up some of my work. I switched to advising small firms and corporate finance in the City, essentially working on my own.
“I’d loved flying since I was a child and on qualifying as a PPL I also became involved in aerobatics. I flew competitions from the late 1980s into the mid-1990s and still have a Pitts Special biplane. So the move into aviation seemed natural and we began working from Stapleford, with George and Amanda full time, while I did one day a week. I became full time around 2000 as the business grew, and moved from Chiswick in 2002.”
Since then LEA, now Luxaviation UK, has been interwoven with family life. “Today, George and I each have just a ten-minute journey to work. George married Amanda and they have twins – she gave up work a few years ago. I married my girlfriend and now I have a wife and three beautiful children!”
Margetson-Rushmore remains an active helicopter pilot and still flies aerobatics in the Pitts. He says he likes “…tootling up for a few loops and rolls, taking people up for the experience,” and flies helicopters simply because he enjoys them. He reckons most people involved in aviation have a love for it, and his and Galanopoulos’ combined passion for the industry has seen their business grow, apparently in sync with their families. “I remember flying out to Jersey for a meeting early on with my daughter, then just three months old. She was the first baby George had ever held…”
Luxaviation UK is still based at Stapleford, but it’s a small airfield and the managed fleet no longer resides there. The early days of LEA were quite different, however. “We rented an old Nissen hut from the airfield owner, with space for no more than five people. Now we have a total UK complement of around 115, of which about 45 are ground staff and the rest pilots and attendants. We started with small piston-engined PA-34s, then larger PA-31s – as many as ten at one time. We got our first King Air in 1999, followed by a second, then a first Citation II, then an Excel, as we gradually expanded. The owner of the first King Air sold it and upgraded, so we bought the aircraft from him. It was the same with the Citation II and Excel.
“We always intended to operate jets, but we were different to many operators in that George, Amanda and I owned 100% of the business. People starting off are typically pilots who find an aircraft owner and set up an AOC to operate it. The owner takes the majority of the income, leaving the operator with a very small percentage. So if you go straight into jets, the chances are you won’t own the company straight away, the operator will have an interest. But we kept ownership ourselves, growing slowly but surely through internal development and self-funding.
“The reality now is that we don’t own our jets – even if a bank offered me a loan to buy and operate a jet I wouldn’t do it, because I wouldn’t make any money out of it. It’s easy to lose focus on that – you can love aviation and love aircraft, and we’re in that sector, which is great, but we’re in business and the aim is to make some money.”
Two decades in the aviation business, spanning some of the industry’s toughest times, is surely enough to taint even the most ardent passion. Has Margetson-Rushmore’s ardour dampened at all? “I suspect my love of aviation is like a marriage! When you first get married you have that beautiful bliss of perfection. You’re a little younger, everything’s perfect and you’re growing up and dealing with all the challenges surrounding it. But as the marriage matures you realise the nuances and intricacies of both parties, and though I still love aviation, as we’ve got bigger I’ve spent more time at my desk dealing with the issues that naturally occur as you’re growing a business and with aviation, especially if you’re managing aircraft.
“Aircraft owners are understandably quite demanding and you have to become chameleon-like, relating to their style and approach. They’re invariably successful people and frequently surrounded in their own business by people who constantly say yes – sometimes in aviation, ‘yes’ is not an answer you can give, because you have safety, maintenance and other issues. It’s important to build a good rapport with owners, adapting to suit their character. Ultimately, I’m providing a service that makes their lives easier by managing something that’s fraught with administration, red tape and issues.”
Of course, there are owners who love the concept of aircraft ownership, but Margetson-Rushmore believes that for most it’s simply a means of transport. “It’s not something you can show off, other than to the few people on board. If you have a yacht, everyone can see you have it, but an aeroplane is either on an airfield or flying; I think there’s a public misconception that people own aircraft to impress.”
Luxaviation UK is by no means alone in the aircraft management business and while it operates alongside respected competitors, other companies have come and gone in the 21 years since it was established as LEA. Margetson-Rushmore is surprised to hear that it’s been 21 years, then considers the key to his and Galanopoulos’ continued success. “We’ve always been extremely hands-on and front line. I think there’s an understandable tendency as companies grow that people back away from the owners. But we’re still hands-on, because we’re entrepreneurial and have the level of experience.
“Our competitors don’t appear to have the same relationship with their owners. Every weekend I handle emails and phone calls dealing with issues in relation to an owner’s flight because something changed, or maintenance was delayed. Earlier today, I was on the phone to an OEM over an issue with a product and I don’t think middle management usually gets involved with that sort of thing.”
Does Luxaviation UK provide a better service? “All operators have to comply with strict requirements and regular CAA audits, but our uniqueness is that an owner truly can speak to the boss anytime of day or night, everyday of the year, and it happens on a regular basis.”
Maintaining such a demanding level of availability must place a strain on family life, but Margetson-Rushmore candidly remarks: “My life revolves around my children.” They just turned 22, 20 and 18, and their upbringings have been entwined with the company history. “I’ve never separated my working life from my social life, I’ve allowed them to mix and never allowed one to get in the way of the other to the best of my ability. My wife was pregnant with Hanna when we signed the shareholders’ agreement, so she’s pretty much the same age as the company!”
With an aviation enthusiast father, all three children are presumably set on flying careers? “Hanna began flying when she was 15 and might have gone solo, but wanted to concentrate on school instead. George had four lessons then decided he preferred sport, and Benjamin, after two lessons, said: ‘Thanks Dad, it was great fun, but I have no passion for it’!”
Speak to operators across the industry and it’s notable how frequently the issue of transparency arises – too often it’s found lacking. For Luxaviation UK, transparency is key, but there is a careful precedent for telling owners everything they need to know, rather than informing them of every detail. “Thinking about operational issues for example, a flight down to the south of France in the summer will always have issues with parking and slots because the airports fill up. As an industry we sell ourselves on the basis of ‘go when you want, change your time whenever you want’ and that’s pretty much true, but there are still peak periods when it’s difficult to achieve.
“We had a customer in midsummer who flew into Toulon and the aircraft was going to reposition into Nice to pick him up three days later. But the plan changed and there were no slots or parking available. In this situation you have to decide whether to tell the owner or not. We knew we could solve it based on past experience and although it’d be great if owners did know how much we have to do to make it work, in this case he simply didn’t need to know.
“But then there are times when you have to say that a change might be difficult to achieve for a particular set of reasons. You have to do your best and keep them updated, but they must understand that it may not be possible. That’s the important thing. Most people in a service industry don’t like saying ‘no’. Sometimes you have to say you’re doing your very best, but there’s still no guarantee. It’s important to manage the expectation and offer alternatives.
“In terms of maintenance, you know checks take a certain amount of time, but if a problem’s discovered, parts might be needed and have to be sourced. Sometimes they get lost, or don’t clear customs in time and if a flight’s coming up you have to explain to the owner that you hope to have the aircraft out in time but there’s a possibility that it won’t be and you offer an alternative. Most owners are accommodating, they accept what they’re being told so long as it’s reasonable and makes sense.”
From the outset, LEA was keen to embrace the latest products and technologies, an ideology clearly expressed in its early acquisition of the Citation Mustang. “We took delivery of our first Mustang in January 2008. We’d ordered Sapphire Jets’ four-seat aircraft, but it never got past the drawing board, so we got our money back and put some down on the Eclipse. But we were really waiting for the first of the major manufacturers to come out with a very light jet and Cessna was first.
“When it announced the Mustang, we cancelled our Eclipse order and instead ordered ten aircraft from Cessna. We took six in the end and they did a grand job for us. Since we joined the Luxaviation group a key criteria has been to manage aircraft, not own them, so we’ve sold them off, but it was a lovely entry-level jet.
“Apart from crewing costs, they have lower running costs, but they are quite small. There was much talk about how the Mustang would introduce people to business flying, but many assumed they’d have a stand-up cabin and flight attendant, and found it surprisingly small. So it perhaps didn’t attract the hoped for level of interest and for charter, customers generally wanted something a little larger.
“Now we look after a Phenom 300, which feels as big inside as a Citation Excel or Learjet 45. It’s very comfortable, it easily takes six passengers and it’s extremely charterable. We also have the Phenom 100, which is ideal for four passengers and has better ramp presence than the Mustang. It also has a proper lavatory and although it’s seldom used on the types of journey these aircraft are chartered for, it’s psychologically comforting.”
Luxaviation UK and LEA before it have been at the cutting edge of aircraft technology, yet although it has an owners’ app, it doesn’t have a ‘charter-facing’ platform, in an era where such apps are proliferating. “I think the concept is good, but I wonder how many apps we’ll end up with long term? Very few of the online brokerage companies that started up over the last few years remain and although people are looking for technology to be the disruptor, all that many of these platforms seem to be achieving is pushing prices down.
“Customers see a company on the app and assume that means it’s good, so they just go for the cheapest price, which is not always the correct way forwards, especially in an industry where operators work on very low margins in the first place. I like the idea of getting a rough idea of price and availability, but it’s not like buying fast food, where if the food’s not great all you’ve done is waste £20. When you’re paying anywhere between £5,000 and £100,000 for a flight you want to talk to someone, you’ll have issues that need dealing with. What happens if I change my time? What’s the food? Where do I turn up? These can all be fixed without talking, but people still prefer that contact.”
Back in 1996 there were no apps and in the two decades since, much has changed. “In the 90s, when someone phoned for a quote, we’d say: ‘We’ll get back to you’. Depending on how busy the agent was, they might call back in an hour, or a day, or even two. Now we’re renowned for giving a price at that initial enquiry, unless it’s a very complicated trip, but even then we can do it very quickly. It’s something customers wanted and I think other operators have changed the same way.
“Avinode has also brought a great advance. It acts as a bridge between brokers and operators. When we receive an Avinode request the system produces a quote and we have someone cast an eye over it to make sure it’s good. It’s not just about the price, it’s also about what if they’d chosen a different jet and other factors.”
Customer expectations have also changed. “The King Air used to be the staple for business, but now people aren’t so keen on propellers; they also want stand-up cabins. There’s been a big move in the demographics of wealth too, especially in Europe, and that’s also changing requirements and expectations.
“Our customer base has become global and local differences in regulations and red tape have complicated the business for small companies. When we started out there was a very large number of operators in Europe, most with small fleets, but we’ve seen considerable consolidation so that now a relatively small number of operators fly larger fleets and it’s the same elsewhere. Within the Luxaviation Group we can draw on a fleet of around 250 aircraft, making us part of the largest operator outside the US.
“Looking ahead, I think we’ll see a lot more consolidation in the future. Would I start out in the business now? Knowing what I know and seeing what’s going on around me, I might, but I don’t think I’d want to start off small.
“I’m also waiting to see if someone’s going to produce a supersonic business jet, because that could bring a big leap forwards. Another major change might come in the more distant future with unpiloted ‘Google’ or ‘Uber’ type aircraft.
“We might see the broking community evolve as well. I reckon we’ll see more platforms out there, but I think people will still want to talk to someone. In an industry where service is so important , an app or website just doesn’t deliver.”
Since LEA became Luxaviation UK, its aircraft owners have seen benefits in insurance, fuel and crew costs through economies of scale. Around 18 months into the venture, all flight planning and despatch was transferred to Cambridge, establishing a synergy that continues to yield savings. Furthermore, the whole group now has visibility of incoming requests, leaving it better capable of efficiently satisfying customer needs.
“George and I have been used to doing what we wanted, so we’ve had to adapt to being part of a large group. Although it means we have to deal with the administrative requirements of a major organisation, the efficiencies and synergies are proving really beneficial. And we’re still working hard, with common manuals and other developments still to come. The first 21 years have been a roller coaster and now I’m looking forward to the twists and turns of the 20 still to come.”