Gem Air: Outback Operator Continued from page 13 By 2009, Dan and JoAnn had yet again re-stabilized Gem Air, LLC financially, and were once again looking at retirement. This time, however, they sold the Salmon Air name and some airport property to their largest competi- tor, McCall Aviation, but retained the FAA operating certificate, the Gem Air name, as well as the airplanes, which they leased back to the buyer. Part of the sale included a five-year, non-compete agreement. During the non-compete period, Dan and JoAnn remained active in aviation, flying for McCall Aviation off and on. But things would change again. “By the time the five-year non-compete was up, my brother David, who always had an interest in aviation, had moved back to Salmon,” Jo explained. “At the same time, the operators of McCall Aviation had decided they no longer wanted our aircraft and in 2014, chose not to renew the leases. Rather than sell everything off and be done with aviation, Dan and JoAnn got back into the game with David, and that’s when Gem Air really came to life in its own right.” Jo, herself, joined Gem Air a few months after Gem Air started the transition back into a truly active aviation business. David, who holds an ATP rating and is Chief Pilot, along with Jo, have been taking over more of the day-to-day operations of the company for the past five years. Their parents continue to maintain an active role at Gem Air. “As the Director of Operations, my dad is still involved with training and flying,” Jo reported. “My mom is in the office less, but she is still a main contact for banks and insurance, and is at all of our meetings.” Today, Gem Air is well positioned for the future with a workforce of 16 year-round employees, which grows to over 20 during the summer, the company’s busiest season. This includes three Airframe and Powerplant (A&P) mechanics and a cadre of eight pilots, which also swells to 10 to 12 for the summer months. Of the core group of eight pilots, four are assigned exclusively to the UPS contract. As of February 15, 2020, the flight operation had a total fleet of 13 aircraft, consisting of four Cessna Caravans, two Piper Chieftains, one Piper Seneca, two Britten Norman Islanders, one Cessna T210, one Cessna T206, one Cessna 172RG, and one Cessna 172K. All Aviation Business Journal | Spring 2020 “Today, Gem Air is well positioned for the future.” except the turbine-powered Caravans are piston driven. The fleet’s Cessna Caravans, along with the Britten Norman Islanders and Chieftains, are the largest, each with a nine-seat cabin. The Cessna 172s, at three-seats, are the smallest. In the mid-range, the Cessna 206 and 210 are configured for five passengers each. All are flown with a single pilot, as none of the aircraft exceeds nine seats. With the exception of one Caravan, all the aircraft are leased from Spirit Air, which is owned by Dan and JoAnn, and functions solely as the fleet owner and les- sor. The other Caravan was purchased from Cessna by another company in Salmon. That aircraft is leased to Gem Air, and is also available for the owner’s use, when needed. Asked about any fleet changes or expansion plans, Jo said that the acquisition of one or more Caravans is possible, with the number contingent on the growth of their business. “Though it’s not the only growth we are considering, our most likely growth is with UPS,” she remarked. “Right now, we are playing that by ear.” The UPS operation comprises the biggest piece of Gem Air’s business and is a noteworthy story in and of itself. “The cargo flights we run for UPS provide the financial backbone for our company in the form of steady, year-round revenue,” explained Jo, adding that UPS currently accounts for just under two-thirds of the carrier’s revenue. “The cargo flights for UPS are what have allowed us to grow into more than just a seasonal backcountry business. A consistent income stream helps us cover year-round mechanics, pilots, and aircraft payments. It would be tough to do that without the UPS component.” The relationship with UPS dates back to 1986 when Jo’s parents flew UPS packages with a Cessna 206, under an agreement with a cargo carrier named California Air Charter, which eventually became Dallas-based Ameriflight. Continued on page 17 15
