Having owned and operated a flight school now for almost 10 years, and an online business for about four, naturally I have experienced some extreme highs and lows during this time.
To build any successful business I feel it is best to have a positive or optimistic outlook on how you view the world. Owning a flight school (or any business for that matter) is both extremely rewarding and can also be really challenging. I have almost come close to the abyss a few times. Some of the reasons for this include, but are not limited to:
The good news is that for the last four years we have finally got our systems, people and culture to a point where we have started to become quite profitable. I’ve been able to set up a Company rather than being a Sole Trader, renovate the premises, buy more aircraft and finally, for me as the business owner, I have experienced some breathing room.
In fact, we were in a position to say yes, when the Gold Coast Sport Flying School approached us in February to provide instructors for their Heck Field school. We had also just employed a Head of Operations who could take the staff and asset management workload from me so I could concentrate on the online business. In addition, we had recently employed my 19 year old daughter to cover the reception desk a couple of days each week to allow my wife more time to concentrate on the marketing.
Then COVID hit us….
No one was prepared for COVID. A little while ago I read Black Swan, by Nassim Taleb, which explained that ‘Black Swan’ events are those unpredictable or unforeseen events which have adverse consequences. Only afterwards do we realise that while unforeseen, there are still early warning signs that we should have been better prepared for.
Some people did see this pandemic coming, including Bill Gates back in his famous 2015 TED X talk when he predicted a pandemic and warned all nations to get prepared. Unfortunately the majority did not take him or others seriously. GoFly had a risk analysis chart; we had some reserves to get us through the wet season; we could prepare for aircraft incidents – and even being sued again – but never in my wildest dreams could I have anticipated the effect that a virus could have on the business and the economy.
Two months of stress
When COVID-19 first hit Australia, our flight school was adversely affected. Our first challenge in late March was determining whether we could keep operating or not under the lockdown rules. And, even if we were allowed to remain open, was it the ethical thing to do when so many other businesses were being forced to close?
To make matters even worse, those in authority were unclear whether we could remain open. A flight school in NSW was ordered to close by the local police on one occasion even though there was no legislation stating they could not operate. As no one knew what was legal and safe, many of our customers just decided to self isolate and stop flying. Eventually we ascertained that we were considered essential and were allowed to keep training. Despite the virus infection rate being low, the public fear was high, and even though the supermarkets were doing a roaring trade, our bookings and business revenue dropped by around 50 percent.
We did everything we could to mitigate the risk of our customers and staff catching or transmitting this strange new virus. When we couldn’t readily buy surgical masks because the hospitals had bought up all supplies, we purchased all sorts of tradies’ breathing apparatus, much to the bemusement of our instructors who could hardly breath in them let alone make radio calls. We purchased disinfectants, hand sanitiser, disposable wipes for the planes and mic covers for the headsets. (We never hoarded toilet paper.) We even made two short videos to explain what procedures we had implemented in the office and in the planes. We were ahead of the pack and helped other flight schools to implement their own COVID response plans.
From thriving to surviving
We went from thriving mode to survival mode overnight, and our discussions changed from ‘how much of a deposit should we put on the new aircraft?’, to ‘how we will survive the next six months if our cash flow dries up?’
The business we had spent 10 years building up looked like it was going to fail due to a Black Swan event. Fortunately we were considered an essential service and were allowed to keep operating. However revenue was still affected.
All bad news
During this time the news was predicting an Armageddon-style economic collapse. Airlines were failing or trying to raise equity to survive. My nearest competitor closed the doors of its Caloundra school as it was reliant on overseas students for 90% of its revenue, and could not pivot quickly enough to keep operating. Many flight instructors lost jobs.
I was preparing for the worst, including letting go of some and possibly looking at reducing the size of our fleet and locations when something happened that had another huge impact on our business, but not how I imagined.
Visitors to QLD were stopped and JobKeeper was started
When the state government decided to close the QLD border in late March, it was (and still is) devastating for QLD tourism operators relying on NSW and Victorian tourists. However, it had a positive effect on the mindset of most Queenslanders and hence the local economy. My business revenue started to increase almost immediately once the border was shut and customers felt safe to return again.
Added to this was the introduction of the JobKeeper program and the ability of many struggling businesses and families to freeze their home and other loans, and this had the effect of changing the QLD state’s mood to a more positive outlook.
Our online business started growing
It was also an opportunity to grow our online flight training business, GoFly Online, as people in other states were stuck at home with only the TV and internet to occupy them and we could help them keep their dream of learning to fly, alive. At this time we were approached by our governing body, to see what we could offer their members during a time when many were unable to fly and wouldn’t see the benefits of renewing their membership. Within a week we had signed an agreement and created a designated RAA AUS landing page with some free lessons on it and RAA promoted this to their members and 10-20 began to sign up each day, which we knew would eventually lead to paid subscriptions.
Our revenue finally started to increase again
By the end of May our revenue started to slowly increase again. At this time we were also approached by a colleague who had helped us film some training videos for GoFly Online. He was a very qualified, and well connected airline pilot who now found himself out of work, and he asked whether we wanted to partner with him to start another flight school. He already had a classroom space in mind at Redcliffe airport where his wife worked and she could also assist with reception. My initial thoughts were ‘Can we really start another flying school during an economic downturn?’ My own wife and my new Head of Operations thought it was viable and knew that over 50% of our existing students already came from Brisbane, so a school there would be a good move. I said yes because I wanted to help this friend and believed his passion would see it eventually succeed.
Once we made the commitment, the school was almost profitable within three weeks, an amazing result during what should be tough trading conditions for everyone. I have a lot of admirational for this particular individual who used what resources he had, to take control of what seemed like a hopeless situation. He is now busy running a new flight school and doing work he loves.
The flight school on the Gold Coast has also grown rapidly over the last two months, requiring a 2nd full time Instructor.
Why is our business growing?
I have been trying to work out why our business is growing, while other businesses – including flight schools – are suffering.
I have outlined a list of why I think this is occurring. Most of this is intuition and not from hard data as there is no historical data to help me understand how viruses affect businesses. Below I have listed some of the possible reasons for our growth.
Why I feel guilty
I feel guilty because I have friends who have lost their jobs. We have two to three enquiries per week from out of work airline pilots looking for instructing jobs. These are pilots who were at the top of their game six months ago (and being paid over $200,000 per year) who are now willing to take a $50,000/year instructor job.
I have friends who are close to losing their businesses; businesses that were highly profitable six months ago, but due to the type of industry they are in, have been decimated by COVID. For so many individuals and businesses they worked hard and did everything they could to mitigate risk however due to the industry they are in COVID has destroyed there dreams of succeeding and thriving (for the short term anyway.)
I have other friends whose businesses (such as medical suppliers) are thriving due to COVID and I have to keep reminding myself that life is not always fair. I feel guilty because so many are doing it tough, not knowing how they are going to pay their mortgage or rent, or the next bill that arrives. In QLD we have so far escaped the worst of it. So many have died in Victoria and in NSW, and many have lost loved ones well before their time.
If our business was situated in Melbourne, this blog would be vastly different.
Personal responsibility and opportunity
I have to remind myself that having my business fail will not help anyone. Currently the business supports over 12 staff, my large family, an ex-wife, plus the income flows on to our six other business partners. I just managed to pay a very large Company tax bill that was due this week and also paid another amount to my accountant (which will go some way to cheering him up while in lock-down in Victoria).
I guess this all helps my guilt about having a growing business during a health pandemic and economic downturn. While teaching people to fly might not be changing the world, as a flight school, we are having a positive impact on our partners, our staff and their families, even if it’s on a small scale, and we pay taxes which will assist other individuals in need.
We are taught that hard work, the right team and making the right choices can make the difference between a successful and unsuccessful business, however, I cannot help thinking that luck has played such a huge part in the lives of individuals and businesses this time around. It would be nice and comforting to think that I was in control and that all my previous choices have led to this point but that would be narcissistic and even delusional. While we do have some control over our lives, there is no doubt that fate, chance or whatever you like to call it, does play a role in our day-to-day reality.
I am still concerned and cautious about what November will bring, when JobKeeper is halved and most frozen loans come off the ice. This will be the real test for the economy and for small to medium businesses.
I really do not know if our business growth is sustainable or if revenue is going to fall off a cliff. While I cannot control what will happen at this time I can start preparing for it so it does not become another Black Swan event. I am hopeful that eventually a vaccine or treatment will be found and the world and the economy can return to whatever type of normal the weary citizens would like. I want to believe that when a vaccine is found there will be a time of catch up growth and prosperity for the entire globe and the months of feeling of being oppressed by the virus will be replaced with a feeling of hope, certainty and opportunity.
Sometimes struggles help us define what really matters, and help bring meaning to our life. Time will tell whether this COVID event will change our collective mindset and create a better future for everyone. I choose to believe it will.
Feel free to contact me if you are struggling
If you own a struggling business due to COVID – particularly an aviation business – please feel free to contact me for a chat. I may not be able to offer much advice but sometimes speaking to someone who is in a similar industry, and who has survived tough times, can help improve your mindset. Feel free to email at email@example.com and I will arrange to have a private chat with you when I can.
Published August 2020.
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