Chris Leach: Air Charter Service – the first 25 years
19 / 06 / 2017
Re-energised by a diet of salad, fish and regular morning workouts in the company multigym, Chris Leach is in robust health. And so is Air Charter Service, the company he founded in the basement of his London home 25 years ago.
The story is a familiar one. Leach found himself out of work in a recession and set to work using the only resource he had — his contacts. Early days were tough and so Leach and his wife rented a room in their house to a student.
That student — Justin Bowman — turned out to be an aircraft geek. He is now ACS’ group chief executive.
Could anyone start a charter broker in the same way today? Leach is generous: “It would be tough, but I am a great believer in the triumph of the human spirit over adversity. I can’t help believe that someone, despite the odds stacked against them, with a huge amount of capabilities and energy could do it.”
The trouble is that part of the odds stacked against them would be ACS. It is not just a formidable charter broker these days — it is an empire. It opened its first branch in Moscow in 1995, but it is since the New York branch opened in 2004 that things have really taken off.
By 2010 there were ten global offices: in October this year number nineteen opened in Miami and Sydney is following in January. “That is the last continent apart from Antarctica,” says Leach, “but not necessarily our last office.”
Divisions now include not just cargo but executive jets, commercial passenger, ie full-size aircraft for passenger airlines, aircraft sales generally for helicopters and private jets, and on-board couriers.
The latter division, added in December 2014, sounds a bit retro, but was the brainchild of Justin Lancaster, group commercial director, who thought it would be a good way to nurture contacts who have urgent shipment needs but do not — yet — need full charters.
Leach overcame his skepticism: “I can’t be the only entrepreneur in this company, so I told him to do a business plan,” and says that it has become a good business. “It looks like we will do almost 600 jobs in the first year and we intend to invest further.”
With all these sidelines, how is the freighter charter business these days? Isn’t it a problem that there are fewer and fewer all-cargo airlines to work with than before?
It seems not. “No, there are weird and wonderful airlines all over the place still,” Leach says.
“Our cargo people could list 30 or 40 airlines that did not exist in my day. There are also the big Middle Eastern fleets which are more than happy to divert freighters for charter flights.”
He also thinks that the charter business is moving in only one direction — upwards. “We have been lucky because the number of charters in the world seems to be growing exponentially. We did 10,000 charters this year. I am not sure there were that many in the world 25 years ago.”
Specifically on cargo, in the nine months to October, charters rose by a third to 2,898, double the level of just four years ago. Other parts of the business are growing quickly too, but cargo actually rose as a percentage of turnover from 38% in 2014 to 40% this year.
But as it grows, can ACS still hold on to its particular vibe, its close team spirit? In its London headquarters Leach has paid a lot of attention to facilities, including the multigym, a part-time personal trainer, and a self-service restaurant with a bare brick “industrial” design that he is very proud of.
Lest you think these are fripperies, there is a serious purpose.
“Despite the recession, there is full employment for bright young things and we have to make ourselves attractive to the talent,” Leach says.
In other words, he is not just pitching for recruits against other air cargo companies but also hi-tech companies in the centre of London. As well as the café and gym, benefits include healthcare, pension, a day off if you buy a house and three days to prepare for a wedding.
If you get married you can take three weeks leave for a honeymoon. You can come in at 11am on the day of your birthday and leave at 5pm on Valentine’s Day. And so on. Leach seems to delight in the fact that he can’t actually remember the whole list.
Equally importantly, the company takes pains to inculcate the ACS spirit in new recruits. All come first to London, where they live in one of five company apartments overlooking the River Thames. “They have a month’s training and then they work here,” says Leach. “Some make it, some don’t.”
That being said, the branch expansion of ACS is all about introducing local knowledge too. Leach realised years ago that he was not getting a big enough slice of the US market, so the solution was a New York (and later a Los Angeles and Houston) office.
“In this business if you are going to give someone $500,000 for a charter, you want to be sure that the plane will turn up,” he says.
“Of course, it is all done on a contractural basis, but you also need to trust people. So, to have someone in your country, in a city near you, that you meet a few times a year and whom you can talk to about your football or baseball team, that makes a huge difference.”
Getting the right mix of talent in a new branch is crucial. The Miami office was opened by someone who had worked for ACS in London and Hong Kong, and a New Yorker with excellent Spanish who had been with ACS for three years. “So we opened the office with 15 years of ACS experience,” Leach says. “We didn’t just hire a couple of locals.”
Consistency also comes from having the same IT system in all the offices: ACS’ Integrated Brokerage Operating System (IBOS), which cost the company $0.6m to develop. All enquiries, bookings and customer details go into this, and head office can use it to see how any broker worldwide is doing.
Brokers work in teams of four and share information among themselves, but IBOS clearly identifies who owns different bits of business. “We don’t permit anyone to steal another person’s client,” Leach says.
“We have created an environment in which we can share knowledge, which puts us ahead of one person working on their own.”
It hopefully also means that ACS will never be replaced by an app.
In the early days of the internet charter seemed ripe for this kind of transformation, the idea being that online exchanges would match capacity to demand.
It has not happened yet, and Leach thinks it never will, simply because personal knowledge and experience remains a critical component to finding the best charter solution.
But ACS is also thinking continually about how new technology can be used to enhance its customer experience. Leach cites the example of John Lewis, a famous British retailer which has also developed a strong online presence.
“My aim is to be like them, to match together the people — our geeks — old-fashioned service and a customer-friendly online site. I think that is the future for the company. Coming online but having an expert you can talk to.
“That is what we are investing our profits in.”