Era Alaska: getting excited for the future.
[ILLUSTRATION OMITTED]Until recently, Frontier Flying Service, Hageland Aviation Services, Era Aviation and Arctic Circle Air Service existed as separate companies that, depending on each one's specialty, busily whisked passengers or cargo to destinations all over Alaska. Now, thanks to a lightning-quick series of combinations and acquisitions, the four operate under one brand, Era Alaska.
"What we've done in the last three years is the equivalent of me walking up to 29 hanging tires swinging randomly in a row, shooting an arrow through and hitting a bull's-eye," said Era Alaska CEO Robert Hajdukovich.
This feat helped Era Alaska garner 30th place on Alaska Business Monthly's list of the Top 49 Alaskan-owned and -operated revenue earners in the state.
According to figures released by Era Alaska, its revenues in 2008 were $124 million. Last year, revenues were listed as $117 million. The company employs about 775 people.
"The acquisitions and combinations were more a matter of timing and stars aligning than they were of precognitive planning," Hajdukovich said.
MULTIPLE ACQUISITIONS
Robert Hajdukovich originally steered the operations of Frontier Flying Service, a Fairbanks-based air commuter, postal and charter company his father, John Hajdukovich, bought in 1974.
In 2008, Frontier combined with Hageland Aviation Services, forming a holding company known as HoTH Inc. HoTH is an acronym rhyming with "broth" that combines the first letters ofthe last names of John Hajdukovich, Hageland president James Tweto and founder L. Michael Hageland, Hajdukovich said.
HoTH acquired 61-year-old Era Aviation in the spring of 2009. and in October 2009, acquired 100 percent of the common stock of Arctic Circle Air Service.
That latter acquisition brought with it two Shorts 330 "Sherpa" cargo aircraft, which can accommodate payloads up to 5,000 pounds and 1,250 cubic feet of cargo space. They have a range of up to 700 miles, speeds up to 190 mph and can haul small cars, midsize pickups and assorted tracked vehicles.
NEW OPPORTUNITIES
"This brings in a whole new era, a new opportunity to offer service unavailable before because of size restrictions," said Don Singsaas, director of cargo and logistics for Era Alaska. Singsaas had been Arctic Circle Air's director of operations. "They would be able to do one snowmachine at a time, but items 25-30 feet long, big siding material, they weren't able to handle. Not all villages have forklifts to load and unload. With our Sherpa, you can slide things in and out without a lot of ground-support equipment."
In January, all HoTH carriers began doing business as Era Alaska.
The company accumulates approximately 74,000 flight hours a year, schedules daily flights to more than 100 destinations in Alaska, serves 650,000 passengers annually and transports 30 million pounds of freight and mail.
FAA CERTIFICATIONS
Each component carrier in Era Alaska has its niche. Era provides passenger service, charters and transportation of mail and freight. Through June, Hajdukovich said, Hageland provided 40 percent passenger service, 45 percent freight and mail and 15 percent charter. Frontier provided 27 percent charter, 50 percent freight and mail and 23 percent passenger service in that period, he said.
"That'll continue to shift more to Hageland, freight and mail," he said. "We'll transfer charter to Frontier."
Now, Era and Frontier each hold Part 121 federal aviation regulation certificates, which enables both companies to operate larger aircraft. The certification, however, comes with the burden of higher expense and more frequent inspections from Federal Aviation Administration authorities than the Part 135, nine-seats-or-fewer carrier receives. So, the company plans to divest itself of Frontier's Part 121 certificate, transforming it into a Part 135 carrier.
"There has to be a specific reason for having a certificate of that type," Hajdukovich said. "Why would you want two? There has to be a value and there really isn't a value. It should be on the one airline, not two."
TECHNOLOGY UPGRADE
The company is in the final stages of revamping its website, to direct customers from the component companies' websites to Era Alaska's site. It installed new fiber optics and new servers at its Anchorage headquarters, at a cost of about $250,000. Streamlining the reservations process is a key goal, Hajdukovich said.
"There's been some confusion relative to reservations," he said. "I hope we're over those humps."
Before, reservations had been handled separately from Fairbanks and Anchorage and there were bottlenecks at different levels for the customer that increased the time they waited.
"We're spreading the call volumes to everybody now," he said. "It used to be if you called the Anchorage reservations line, you'd be on hold. Now, you're put on a queue for Anchorage or Fairbanks. If a line opens in Fairbanks, an agent there will get that call."
SOME TURBULENCE
Melding four companies into a single, more cost-efficient one hasn't always been a smooth process.
"It's come at the cost of cash, bad communications, inefficiencies," Hajdukovich said. "Despite our best efforts, we're making progress in helping people figure out who's in charge, who do I work for, who do I listen to. How do I vent that I'm not happy. Out of all that, you have to remember you have people's lives at risk and not sacrifice safety."
Seeing the impact of the combination and acquisitions on his family's company has been difficult for Hajdukovich.
"Being born and raised at Frontier, that's been pretty traumatic," he said. "Era and Hageland have grown, but Frontier's really contracted. It's been rough not only from the family perspective, but for the employees. Consolidating jobs has been a real challenge."
The combination of Hageland and Frontier Flying Service saved more than $10 million a year in consolidation and efficiencies, Hajdukovich said.
"When you first combine, there are so many things that are obvious; it's like tripping over $100 bills," Hajdukovich said. "Now, it's like picking up rocks and looking for quarters. Before, we were picking up rocks looking for pennies. There's a continual reevaluation of how to be more efficient, consolidate services."
When Frontier first combined with Hageland, Hajdukovich didn't envision a future that included moving into an Anchorage headquarters or acquiring Era.
"We were expecting to grow the Frontier certificate in Part 121 (scheduled air carrier) operations, get a Dash 8 (aircraft) in competition with Era and grow Hageland in Part 135," he said. "But ultimately when we looked at that growth process, we saw it would be a significant capital investment. We had to ask the question, 'Are there other alternatives to growth?'"
Hajdukovich says he is now working toward splicing the disparate cultures of the old companies into one.
"My role is to try to wedge people out of the past and get people excited about the future," he said.
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| Title Annotation: | 2010 Alaska's Top 49ERS: Still Growing Strong |
|---|---|
| Comment: | Era Alaska: getting excited for the future.(2010 Alaska's Top 49ERS: Still Growing Strong) |
| Author: | Kalytiak, Tracy |
| Publication: | Alaska Business Monthly |
| Geographic Code: | 1U9AK |
| Date: | Oct 1, 2010 |
| Words: | 1113 |
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