Sunday, March 09, 2014

Falcon Flight Academy valuable asset for China

As China continues to reign supreme as the world's top exporter, the “Made in China” label has become a begrudgingly accepted fact of life in the world of business.

However, one entrepreneur with a location in Coweta County has quietly turned the tables and now has become one of China’s most valuable assets.

As president of Falcon Flight Academy, Ray Sluk has spearheaded the small flight academy into a destination point for future pilots from around the world. Falcon has schools in small Georgia airports, including Peachtree City, Athens and the Newnan-Coweta Airport — Whitlock Field.

Sluk originally left Peachtree City for China in 1991 and spent the next 12 years overseas as FedEx Vice President for China, Japan and Central America before returning home in 2003.

“I walked into Falcon Flight Academy in September 2004 and asked about learning to fly,” Sluk said. “The instructor said he could take me up tomorrow.”

However, Sluk didn’t feel like waiting.

“It was 4 in the afternoon so I looked outside at the planes and asked him, ‘Can we go today?’ and he said, ‘Sure, let’s go.’”

From that point forward, Sluk has never looked back — acquiring his private license by that December, his instrument rating the following March, and then his commercial license.

Sluk then invested in the Falcon Aviation Academy, purchasing a 20 percent stake in their stock.

As he became further involved with the company, he suggested that the academy could become an international flight school through the use of the contacts he had made over the years. The company allowed Sluk to spearhead the expansion, and, in 2006, they received their first students from India. Two years later, China followed.

“The FAA certifies us as a 141 flight school,” Sluk said. “There are about 3,000 flight schools in the U.S. and 10 percent are TSA SEVIS (Student and Exchange Visitor Information System) certified. Now, out of those, there are only 10 that are Chinese CAAC (Civil Aviation Administration of China) 141 certified. We’re the only one in Georgia.”

Once Falcon acquired their Chinese certification in December 2008, their first students finally arrived the following November.

“The CAAC limited the amount of students we had at first,” Sluk said. “The CAAC has taken our quota from 30 to 60 to now 120 students and I’m about to make a trip to China this week with a request to go to 150 students and should happen by June or July. However, we’ll have to cap out at 150 due to constraints of the airport.”

So why China? It comes down to supply and demand.

“There is a huge need for pilots. When I left in 2000, FedEx had 660 aircraft in its fleet. That was more than all the aircraft combined in China at that time,” Sluk said. “Today, there are around 5,000 aircraft and they demand 10 -12 pilots per plane.”

However, training in their home country is problematic for the students. Since the Chinese military controls the airspace, students can expect less than one hour of training per day, per plane because of the airspace.

And there aren’t a lot of good flying days because of the air pollution, according to Sluk.

“If you look at the total student base, they make up about 40 percent,” Sluk said. “Most of the domestic students are part-time and are only here a few days a week. The Chinese are here all day, five days a week because it’s a 12-month program. We have approximately 60 instructors and the Chinese require a 2 to 1 ratio for a full-time instructor.”

There are four certified flying schools in China and only 20 approved flight schools outside of China. The majority of training is done outside of the country in places like the United States, Canada, Australia, Spain, France and New Zealand due to the restrictions they face back home and the road to becoming approved by the Chinese government in a long one.

“They want to see prior records and then start with your 141 certification,” Sluk said. “There were 32 foreign schools at one point but it has shrunk to 20. Some schools have up to 360 Chinese students. The smaller ones are around 30-60. Right now, we don’t want to get much bigger.”

So what is the financial impact of the program in terms of the local economy?

Each student ultimately ends up bringing more than $100,000 dollars to the area and that’s a conservative figure, according to Sluk.

“The contract we have with them includes two meals a day, transportation and flight training, which includes books, headsets and uniforms. Then they need TSA approval approximately three times and it costs $130 each time,” said Sluk. “It’s pretty expensive.”

All the Chinese students are recruited by airlines after completion of two years of undergraduate studies. The airlines require a 99-year commitment. The student then signs with the airline that will fund the majority of the training.

And with 110 of their students currently residing in more than 20 multi-room apartments at the Columns at White Oak, they’ll be expanding on that in June.

“They do a good job for the local economy. White Oak likes it, the restaurants like it and these guys shop like crazy,” Sluk laughed. “It’s a big boom for local industry. The flight school employs mechanics and instructors so our total number of employees is currently around 100.”

Students come in at different times of the year and the academy currently has 10 different Chinese airlines that are represented, including China Eastern — one of the largest three airlines in China.

However, one of the largest challenges the Academy faces is recruiting and maintaining quality instructors on staff.

Matt Bowley was hired by Falcon Aviation Academy in September as head of sales and marketing, in an effort to help advance recruitment.

“The U.S. passed a regulation last August that requires first officers to have 1,500 hours of flight time. The instructor can work here and gain 100 a month, so 12 months later, you do the math,” Bowley said. “In such a short amount of time, an instructor can have the required number of hours to go to an airline. Most other schools can’t offer 100 hours a month. That’s what’s exciting about what we’re doing. It’s a fast track.”

“Most want to go to the airlines,” Sluk said. “We’ve been talking about a pilot shortage for 10 years now. Six years ago, regulation was passed that took the retirement age from 60 to 65. Now, that time frame has passed so all the baby boomers are retiring out.”

“It used to be a glamorous thing, being a pilot, but now people question spending all this money to go to flight school, only going to work at an airline for three years at minimum wage before they can see any kind of bump,” Sluk said.

Starting salary for a commercial airline pilot is between $20,000 to $24,000 for their initial three years, according to Sluk.

“It doesn’t pay well at first so you’ll have major student loans looming,” said Sluk. “If you’re going to a four-year program, you’ll have six figures worth of debt. However, we can do the same thing for less than half that.”

“China is like we were 50 years ago,” Sluk said. “Guys that leave here and go back to fly in China are making more money in China than our instructors can make at a regional airline in the U.S., and that’s in an economy where the average wage is one-tenth of the salary.”

The Chinese pilots are now in a position where they can change their entire family’s income.

“Some of these guys are coming from absolutely nothing,” Bowley said. “When a pilot walks down a hallway in China, everyone moves. That’s how much respect is given to them in their homeland.”

While the surge for Chinese pilots has proven to be a lucrative stream of revenue for Falcon Flight Academy, Sluk is looking to build and diversify.

“The current pilot shortage in China should last another 10 years. But we would like to make it so when the boom is over, we’ll have other things to replace it with,” Sluk said. “We’re looking into domestic, European and South American markets.”

Falcon has also recently hired a new financial analyst and is currently focusing on restructuring.

“We’re going from one chief flight instructor to setting up an assistant chief for every 20 students,” said Sluk. “Once we get that in place, we can then expand the market once we have the infrastructure.”

With the purchase our their second King Air twin-turboprop aircraft just a few weeks ago, it would appear that the sky is the proverbial limit for Falcon Aviation.

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