Defense belt-tightening gets startup off the ground
November 4, 2013
In his successful 30-year military career, R.C. Thompson served three combat deployments and held jobs ranging from commanding officer of the Navy's Top Gun school at Fallon to a Pentagon position working with budgets and fleet requirements as deputy director of the Navy staff.
But nothing, he says, has proven more challenging than getting a small business off the ground.
Tactical Air Support, the Reno company that Thompson launched in 2006 after his retirement from the Navy, clearly is gaining altitude.
Posting 60 percent annual revenue growth in each of the past three years, Tactical Air Support benefits from budget-tightening faced by the U.S. military and its allies.
Headquartered at Reno-Stead Airport, the company operates a fleet of military aircraft that are used for roles such as training and development of tactics.
Its advantage: Dramatically lower costs.
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Thompson says his company's costs to operate a two-seater F-5B fighter trainer — typically, about $5,000 to $6,000 an hour — save about 75 percent from the costs recorded when similar aircraft are flown by the military.
That's particularly important to defense budget planners, he says, for missions where the military pilots wouldn't be getting much training themselves.
Tactical Air Support's aircraft and pilots are used increasingly, for instance, to act as the "adversaries" in military training exercises.
The company's reach is global.
This fall, four fighter pilots from the Botswana Defense Force completed five weeks of F-5 refresher and flight-instructor training at Tactical Air Support's facilities north of Reno.
The training, which wrapped up in mid-October, included 26 hours of ground school and cockpit drills and nine training flights.
Tactical Air now is sending instructors to the African nation for the next phase of training, which includes development of tactics instructors in the Botswana Defense Force.
The company's staff of 30 is dominated by retired instructors and commanders at Top Gun. Along with the company's headquarters at Reno, they're stationed close to military training facilities in locations including Southern California, North Carolina and Florida.
"We have people waiting in the wings to join us," Thompson says. "It's a network."
And because top fighter pilots create a close-knit fraternity with few secrets, he says the company's staff knows precisely who they want to join Tactical Air as it grows.
When they're not flying or teaching classes in ground schools, members of the company's staff work as consultants — writing combat manuals, managing experiments on tactics, providing expertise on new defense technology.
On the ground, too, the company benefits from tightened defense budgets.
"Austerity is our friend," says Thompson. "The tougher the times, the more relevant we are."
But even though Thompson knew from the start that the basic economics of the business made sense, he was disheartened during an early meeting to pitch Tactical Air's services to a top Naval officer.
"He told us, 'The Navy has no requirement to save money,'" Thompson says. "We were four or five years too early."
And in a capital-intensive business — a two-seater F-5B aircraft, the cornerstone of the Tactical Air training fleet, sells for $2 million to $2.5 million each — the pains of being too early can cut deep.
Five fighters — F-5B or the Canadian CF-5D — are the center of the company's fleet of 13 aircraft. It also includes an EMG 314 Super Tucano. Nine air forces around the world use the Brazilian-made aircraft, but Tactical Air is the only commercial operator flying it.
Thompson says that a patient private investor stood by Tactical Air through its early days and supported its executive team as they methodically built a fleet of aircraft to meet the demands of new business.
Now, he says, the financial flywheel is beginning to turn and the company is gaining momentum.
His expectation for the next five years?
"We're going to be a very big international company with an international reputation," he says.