High-Flying Venture Links O.C., Russia : Aviation: Newport Beach entrepreneur aims to turn remote Kamchatka into a major Far East refueling stop.
NEWPORT BEACH — On the wall, clocks display the time in three parts of the world: local time on the Pacific Coast, mean time in Greenwich, England, and the time in Kamchatka, Russia.
Kamchatka?
Now known mainly as a territory in the board game Risk, Kamchatka may become one of the Pacific Rim’s major pit stops for planes if aviation expert and entrepreneur Steve Myers has his way.
One year after making a historic trip to the long, cold peninsula whose military secrets once made it off limits to the world, Myers is building a business based in Newport Beach to use Kamchatka’s main military airport as a refueling site for cargo aircraft, business planes and, eventually, passenger flights.
His joint venture with the Russians will gross $3 million this year, he said, and grow to $158 million in 1997.
“Kamchatka is the missing link in the Pacific Rim,†Myers said.
The room with the three clocks, as well as numerous maps in English and Russian, are in the suite of offices housing the consulting firm Steven S. Myers & Associates. That room, with its lone computer, has become the heart of the new venture. It is the dispatch center where cargo companies and businesses with flights headed to or from Hong Kong and other Southeast Asian cities call to reserve space and fuel at the military base just outside Kamchatka’s capital, Petropavlovsk-Kamchatskiy.
By early next year, Myers said, that office and 10 employees will move into a suite of their own across from his consulting firm as part of a Byzantine set of operations known as California Kamchatka Cos.
“This is not a shoestring operation,†the veteran pilot said.
Myers, a consultant on Russia’s Mars project, at first thought he had only a modest business opportunity when the Russian government invited him last year to be the first American to land at its main military airport in Kamchatka. Russian officials were looking for ideas on what to do with the airport.
The airport under the former Soviet Union had gained infamy in 1983 as the base for the Soviet fighter that shot down a South Korean Airlines passenger jet for straying into Soviet airspace. All 269 people aboard died.
After he was asked to visit the airport, Myers said, he spent a lot of time staring at the globe and studying aviation maps. He realized that Petropavlovsk-Kamchatskiy was almost on the line of one of the most natural flight routes between the United States and Asian destinations.
He saw it as a place where business aircraft, such as Gulfstream IV planes, could stop for refueling. The airport had storage tanks for 7 million gallons of fuel, repair facilities, two long runways and a spartan but serviceable hotel.
“There is a lot of infrastructure already in place there, and it doesn’t make sense to build all new facilities,†Myers said. “If Russians want to turn to capitalism, they should build on what they have, take small steps first.â€
Besides, he said, his own business strategy is to start with a minimum investment and to renovate and rebuild using profits of an ongoing operation.
Last fall, Myers began the arduous process of signing protocols with the Russian government, forming the joint venture with a new Russian company and setting up the businesses to work with the venture. What he got was control of all international flights at the airport.
Along the way, one of the directors of his consulting firm, Richard Janisse of Martin Aviation, suggested that Myers consider servicing cargo planes. The suggestion led to a gold mine.
Not only was it cheaper for cargo planes to land in Kamchatka instead of Seoul or Tokyo, it also shortened the longest stretch in the Pacific trade air route, allowing transport planes to carry less fuel and more cargo--thus make more money.
World Airways and smaller operations signed up immediately. Myers said that United Parcel Service and Federal Express, as well as Evergreen, Alaska, Northwest and Atlas airlines, also are waiting to begin refueling in Kamchatka.
For now, cargo flights are expected to make up about 80% of California Kamchatka’s business, Myers said.
Meantime, control of the operation is in Newport Beach, and customers deal in dollars, not rubles, for everything from room and board to repairs and refueling. That gives customers confidence that they are using a stable currency and makes it easier to account for the revenue, Myers said.
“The key was to control the money here so it doesn’t have to be repatriated from Russia,†he said. “We had to control it not only for ourselves but for our Russian partners, because no one knew what would happen if our customers paid in rubles in Kamchatka.â€
The refueling port is only the first step in the grand scheme that Myers has for Kamchatka. His next project to to build a cold-storage facility at the airport so Kamchatka can export its salmon to the Western hemisphere and import U.S. fruit and vegetables.
Following that will be efforts to build hotels and develop the peninsula’s economy.
“Kamchatka is like California--in 1865,†Myers said. “It has the same geographic makeup, with its own Lake Tahoe, its own Yosemite, its own San Joaquin Valley and even its own San Francisco Bay.â€
Of course, the only bother, he says, is that it’s colder in Kamchatka.
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