Air Transport World

Evergreen sets sights wide; from widebody aircraft to a wide-ranging route network, it's much more than a wet lessor and former mail carrier. (Evergreen International Airlines Inc.) (company profile)

From widebody aircraft to a wide-ranging route network, it's much more than a wet lessor and former mail carrier.

When Evergreen International Airlines lost its roughly $90 million contract to provide express mail service to the U.S. Postal Service last summer, it also lost roughly a third of its business. However, because of advance planning combined with some excellent managerial foresight, it managed to lose only about 10% of its revenues. The lost contract also served as a catalyst to move the airline further away from narrowbody aircraft into an expanded 747 fleet.

At the time of the contract cancellation, there was concern in the industry as to how the airline would do without it. The airline had invested heavily in narrowbody aircraft, buying 20 DC-9s and 727s. It also had used the contract to launch its EAGLE ground-handling company, with the contract accounting for about 80% of that business.

However, Evergreen already had started moving into a widebody cargo operation when it received the USPS contract, with one 747. It acquired two additional 747s during the term of the contract and when it fell through, owner Delford M. Smith quickly started taking steps to find new business, primarily by increasing the widebody, heavy cargo operations.

As a result, Evergreen is stronger than ever.

Helicopter seeds

The airline, a supplemental carrier concentrating on the cargo market, is actually one of five aviation companies within the Evergreen International Aviation, Inc. holding company. The holding company, in turn, was created in 1960 by Smith as a helicopter company. Smith had learned to fly helicopters with Dean Johnson Helicopters in McMinnville, Ore., after leaving the Air Force in 1957. He and a partner bought the helicopter operation when Johnson died and when the partner left in 1960, Smith became sole owner, renaming it Evergreen Helicopters.

Companies now under the Evergreen name, along with Evergreen Helicopters and Evergreen International Airlines, are Evergreen Air Center, Evergreen Aircraft Sales & Leasing Co., and Evergreen Aviation Ground Logistics Enterprises. A sixth company, Evergreen Agricultural Enterprises, was formed by Smith in 1978 and specializes in developing grass seed and nursery products.

The airline was purchased in 1974 from Johnson Flying Service, not related to Johnson Helicopters, and began operations in 1976. Since then, it has experienced a growth to $230 million per year, whichc equates to a compounded growth rate of over 30% per year, according to Darrell Dwyer, sr. VP-administration. Operating-income margins have averaged 15% to 20% of gross revenue over the past three years. …

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