Niche Market Demand Helps TAG Aero Soar in Aviation Supply Chain

Located off a quiet street in Winter Garden, a modern facility stands apart from its neighbors, with a sleek gray metal exterior and the bright green logo of TAG Aero. The 15,000-square-foot warehouse was built just two years ago, and it’s already too small to house the demand for its services and product.

With a team of 15 employees, Founder and CEO Myles Thomas has led the company to create a name for itself in a specific market within the aviation industry for buying, selling and repairing aerospace auxiliary power units. An APU contributes to a variety of functions including providing backup power, initiating the main engine and running the air conditioning system.

Thomas learned the ins and outs of the industry while working for an APU repair company. During his time there, he pinpointed and improved on various aspects of the technology. He saw the need for a specialized organization like TAG Aero and took off with the idea.

Growing Pains

Within the first year, Tag Aero was recognized by the Inc. 500 as the 126th- fastest-growing company in the U.S. “We’ve been growing consistently now for about five years,” he says. “Initially we hit $1 million; now we’re hitting $20 million.”

Thomas remembers when he first set his thoughts in motion. “I was 27 years old when I quit my job repairing APUs to start my own operation. I started up with a few dollars in my bank account and a U-Haul truck where I stored inventory. That was my warehouse for the first few months.”

Thomas continued to refine his brand and capabilities. He sought investors and eventually decided to pull from every resource. “Full disclosure, I knocked on my stepdad’s door and said, ‘Hey, I’ve got a really good idea.’ He knew I had been in the industry, so he was confident in the investment. I was able to pay back that investment within the first year.”

This year TAG Aero acquired another business — the repair company where Thomas used to work. “When I left my job in 2011, they told me to run off and try my venture and that they’d see me back in a couple of years,” he says.

With the purchase, TAG Aero acquired his former employer’s capabilities for working on APU repairs approved by the U.S. Federal Aviation Administration, uncapping a new revenue stream. These repairs now account for 20 percent of his company’s revenue.

Expansion at an accelerated pace remains a familiar concept for Thomas. “We’re aiming for a $100 million-per-year goal in the years ahead,” he says.

Thomas understands that the most essential aspect of accelerated growth is funding. “In order to continue growing, it comes down to capital,” he says. “With any business, capital is such a make-or-break, and fortunately as we’ve been growing, our banking partners have been a huge help for us. Growing pains are such a frustrating part of business, but you need them to understand why you’re taking the next step, the next journey, the next path.”

Part of the Supply Chain

A chain is only as strong as the individual links. TAG Aero proves itself to be a fundamental link in the aerospace aftermarket supply chain.

“There are so many layers to the aviation industry,” Thomas says. “From the manufacturers themselves, to the leasing companies that own them, to the operators, to the repair stations, to all the people who support the airline. We’re part of that network.” Companies that sign contracts with airlines look at TAG and see a support network.

A single APU contains hundreds of parts. As a gas turbine engine that aids in the control and function of a vessel, this integral part of an aircraft must constantly perform at peak capacity. TAG Aero is able to offer expert care at a reduced price, Thomas says, because of the company’s efficiency.

TAG Aero navigates each deal equipped with knowledge and experience. “We understand the product so well that it allows us to make educated and experienced purchases, which allows us to make the sale much easier,” Thomas says. “Clients rely on and ultimately benefit from our expertise.”

Unpacking the Mini-Pack

With the client in mind, TAG Aero sets out to trim the edges from the lengthy and complicated APU inspection and repair processes. In the documentation system Thomas and his team developed, all of the APU data and historical details a company might need to make an informed decision from a technical, commercial point of view are neatly compiled into a single package named a “Mini-Pack.”

“If you can imagine, you are working with APUs that are 10, 20, 30 years old,” Thomas says. Each APU comes with its history documented on hundreds of pages — all of the maintenance records, performance data and other information that has been logged over the years. “When you buy an APU, you get a massive amount of paperwork — and there’s absolutely no organization to it.”

To simplify the process for clients and airlines, TAG Aero employs a small team of APU experts who know exactly what to look for — and, just as important, what to steer away from. “As a buyer, this process can easily become a thousand-piece puzzle. The great thing we do is we put the puzzle together for you. We know how APUs work. We know what we’re looking for. It’s all we do.”

Thomas spent the past five years refining his sales and acquisition team. “Because we specialize in only APUs, it’s really allowed us to creep in, fly under the radar — no pun intended — and focus on our product and process. At the end of the day, people come to us because we sell APUs more efficiently than someone else. It makes the buyers’ job a lot easier.”

The Sky is the Limit

All business owners have their own chain of events regarding their trials and triumphs. Thomas reflects on his. “The success story, I think, is a combination of a number of things. First is knowing your product, of course. Second is the ability to be in a small watering hole, a small niche. There aren’t that many people who specialize in just APUs. We’ve found a niche market, and we’re good at servicing and standing out within that market.”

Thomas looks to the future and anticipates expansion. “What we do now is good, but there is room to grow significantly,” he says. “Only four or five different chapters within APUs have been touched yet. The sky is the limit.”

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About the author

Elyssa Coultas

Elyssa Coultas is an SEO manager, copywriter, UX designer, and owner of GHOSTWE. She formerly worked as a writer and digital marketer for i4 Business.

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