Airplane parts business takes flight

When Scott Tinker hears that someone's got an airplane to sell him, the Tempe business owner takes it seriously.

And when the managing partner of ITS Infinity Trading looks out at his 20,000-square-foot facility that houses large commercial airplanes and thousands of aircraft parts worth millions of dollars, he still chuckles remembering when he and college buddy Ryan Kohnke started the company nine years ago, in a 10-foot by 10-foot spare bedroom in Tinker's home.

At the time, the friends and business partners were selling airplane parts to carriers needing anything from seats to key engine components. Stepping around and reaching over one another became part of the everyday routine.

"We shared one big desk that took up the whole bedroom. A dresser was our shipping table, and it was in the closet, so that was our shipping department," Tinker said.

Tinker had previously run the sales division of a company that sold and purchased airplane parts. When the company's owner decided to focus on the purchasing side, Tinker reached an agreement with him to strike out on his own and sell what was left in the inventory.

Tinker called Kohnke, who was working for a computer and technology company and who shared his aspiration of being a business owner.

"If we started the business, it had to be no-holds-barred. We took a big risk, a gamble, with failure not being an option," Tinker said.

When Tinker and Kohnke launched ITS in May 2002, the airline industry was reeling from the impact of the Sept. 11, 2001, terrorist attacks.

They sold their entire inventory, starting with an initial customer base of about 20. Today, ITS has 6,400 worldwide customers in its database.

"If we can start a company in one of the worst times in this industry, we can make it through anything," Tinker said.

For the first five years, ITS purchased surplus and obsolete parts from manufacturers, airlines and other brokers. Parts were overhauled after being removed from planes that were near the end of their lifecycle.

In 2007, a decision to purchase a complete airplane expanded their business model and allowed them to better understand the mechanics of an airplane's components. It also proved fortuitous, given the economic downturn that was right around the corner.

Tinker called that first purchase, a MD80 from Spirit Airlines, the launching point of ITS. Recently, the company purchased its 17th aircraft, a Boeing 737.

Having access to overhauled parts is valued by airline companies in a time when they do not have the financial resources to purchase new planes or parts directly from manufacturers. Being able to dismantle large commercial planes and sell everything from an upright tray table to entire engines to airlines is a service ITS has embraced and thrives in. The company has since secured consignment agreements with some carriers, Tinker said.

Airlines are less willing to pay the sticker cost for a brand-new brake from the manufacturer when they can get //one used that works just as well from ITS for half that.

"Guys like us are in business because the cost of operating an airline is really expensive," he said. "It's always been a way for airlines to lower their costs."

Tinker credited the company's success to a hard-working and ambitious staff. Over the years, Tinker and Kohnke have had opportunities to rapidly expand their business and explore more facets of the industry.

Being selective about how they choose to grow and implementing strategies that balance logic and risk has been a conscious effort, one that has contributed to the company's success, marketing manager Mark Colletti said.

"Not going too fast or going to slow. It's been critical to balance our future with where you are now, what you want to do and taking the road that gets you there," he said.

Tinker added, "It's being good at what we know and not trying to take on everything. Some of our competitors sell military planes or helicopters and it's too much. We stay close to our mission."

Competitive pricing and great customer service are among the reasons Ann Justiz, vice president for Safe Fuel Systems, a Florida company that overhauls aircraft fuel components, has worked with ITS for eight years.

"They are innovative and always trying to do something different. They adapt and are very proactive," she said. "Some people in this industry are not sincere. They are sincere and ethical."

Air Transport Components President/CEO Roy Hyde has bought from, sold to and overhauled parts for ITS since 2002. Hyde, whose business is also in Tempe, said that if Tinker and Kohnke continue to make the good business decisions that got them here, they will maintain success.

"In the airplane-parts industry, you always think about your family being on those planes," Hyde said. "Those guys always make the right decisions. It's not all about the dollar with them, and if they keep doing that, they'll be around for a long time."

ITS Infinity Trading

Where: 1310 Drivers Way, Tempe.

Employees: 21.

Interesting fact: The global aircraft, engines, parts and equipment market is projected to reach $122 billion by 2015, according to Global Industry Analysts Inc.

More details: 480-940-1037, www.itsparts.com.

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