As airlines face increasing pressure to cut costs and lower prices, many are turning to older planes that have an increased useful life due to advances in technology, said Atlanta-based International Airline Support Group (IASG), in its 1996 financial statements.
IASG supplies replacement parts for older planes, especially McDonnell Douglas’s DC-9’s and MD-80s, and currently has more than 770 clients, with about 20% of total sales coming from international clients, said company CFO Peter Murnane in an interview with GlobalFax. The company hopes to increase international sales, especially in Europe and the Asia Pacific region, he added.
IASG was founded in 1982 for the purpose of disassembling and melting down older airplanes that didn’t meet federal noise standards. When the conversion process became valuable, the parts that had been meted down became valuable again.
Once a process for converting older planes to meet current federal noise standards was developed, “the company really took off and grew,” Mr. Murnane said. The current set of standards is gradually being phased in for all planes flying in the U.S., he added, and will be in place by 2000.
Unfortunately, after the group went public in 1990, it expanded too rapidly, took on debt and got outside its core competency, which resulted in a $17 million loss in 1994, said Mr. Murnane.
After restructuring operations and finances in 1995 and late 1996, respectively, the company reported $2.3 million in net income for 1996 off of more than $23 million in revenue, he said. New executives also have been brought on board, he added.
“As of this past fall, we’re a new company,” he said.
For more information, Mr. Murnane may be reached at (770) 455-7575.