Air Service Basel CEO Claudio Lasagni on the philosophy that drives all aspects of his business
Q: It is now two years since you last spoke with EVA. How have things been and what do you think the prospects are for 2016?
A: Well, to be honest, we are never totally satisfied and there are good reasons for always wanting to be better and do better in this industry. But we are very happy with the progress that Air Service Basel has made in the last few years. We have established ourselves at a good level and we have done it not by trying to be a low cost solution, but by constantly striving to deliver the best price performance ratio.
This is a tough thing to do, especially when there are competitors out there with the intent on cutting prices to unsustainable levels. We take a measured view on our pricing as we are offering a tailor made solution. We are not able to participate in pricing competitions with organisations that offer and require the bargain solution. We are trying to sell a very good service at a very good price and clients see what they get for their cash. We develop partnerships which engage in joint business objectives ensuring a high level of mutual benefits and services. This brings long term commitment and understanding from both sides. What happens with suppliers in this sector that come in with rock bottom prices is that they end up not being able to provide the level of service that the client expects and that leads directly to unhappy clients – which of course, creates opportunities for us to grow our business.
Q: How much price pressure is there in your various areas of business?
A: We cover a number of sectors. In addition to our FBO here at Basel, we do some aircraft management and charter, and we provide an MRO service for our own fleet and for some clients. There is no doubt that there is over-capacity in the market and it is all about being clear about how you are going to compete. On aircraft management, for example, we are not going to get into heavy competition with major players who manage dozens or even hundreds of aircraft. We have some Falcons and Challengers that we manage for our owners but we do it for a good fee and we provide a high level of service. We are not charging the clients thousands of pounds for nothing. We see to it constantly that they get the best results for their money.
We are definitely not interested in being the biggest on the market. There are big FBO chains. That is not our interest. We are proud of being an independent operation, which is also a big selling point that is very much appreciated by our customer base. I see more and more clients that are very disgruntled at being caught up inside a big organisation that is just focused on being the biggest, and where the client really does not feel that they are getting the personal attention that you would expect when you ask someone to look after a multi-million dollar asset for you.
Q: The general consensus seems to be that business aviation generally had rather a disappointing start to 2016. What is your take on the current state of the market?
A: Whenever conditions get tough, you see over-capacity generating price wars, and there is now significant over-capacity in both the MRO sector and in aircraft completions and refurbishment. Particularly in the latter field if you do not have a strong pipeline of work already in place, the probability is that you are going to have huge problems. You do not want to be competing against new players in the sector setting up in Eastern Europe with a very low cost base. You cannot beat them at that game and it is not our intention to try. I say: if you want to be a bargain player, then go for it, but that is not us. We are focused on a niche business that provides services to clients that want the highest quality of service and are prepared to pay for it, and this includes both high net worth individuals and corporate clients.
Q: What do you see as growth opportunities for you?
A: A year ago we started a ground handling business in a joint venture with CAT Aviation in Zurich. We have a 50% stake in that business and that was very much a new development for us. It has gone very well and has taken us into a new area. We will do this kind of venture again at some future point, in other locations if we see an opportunity to partner with an organisation of the quality of CAT Aviation, and if there is a clear strategic objective to the venture.
Q: What are clients saying and feeling about the current difficult market conditions?
A: There is a lot of concern out there. Our clients span a wide range. Those with a high net worth are not that concerned and indeed, some see opportunities in the current conditions. However, business clients that have just one or two aircraft, and where the last digit on the invoice really matters to them, have considerable anxiety about the future. Between these two extremes you have the middle range of clients for whom things still look fairly healthy. When conditions get harder, some corporations feel that it is not quite politically correct for them to be using the corporate jet, so they charter a lot more – and that is also good for us!