- The Washington Times - Wednesday, September 17, 2003

John M. Belcher is putting an Annapolis transportation-communication company on the aviation radar screen.

Arinc Inc. manages 70 percent of the communications between commercial airplanes in the sky and their airline companies worldwide.

It has quickly dominated key markets of the transportation industry since Mr. Belcher’s tenure as president and chief executive officer.

“We were doing about $240 million in annual sales when I joined in 1997, and we’re on track to do $708 million this year,” Mr. Belcher said recently in Arinc’s crisis-control center — a high-tech conference room.



Mr. Belcher and his executive team will be in the same room this week, helping airlines correspond with planes being moved out of Hurricane Isabel’s path. The Category 2 hurricane is expected to hit the East Coast today.

But Mr. Belcher is calm about the storm. “There is always a crisis happening in the aviation world, so you take it in stride and keep your cool.”

Behind him is a row of windows that reveal the company’s network operational center. At any time, the room full of computers and weather-tracking devices has 20 workers monitoring and troubleshooting for airline companies across the globe.

The company started out as the main radio communications coordinator for the airline industry in 1929, then owned by four major airlines.

Arinc is now owned by US Airways, United, Delta, American, Northwest and Continental airlines and by some of the company’s 3,000 employees.

While the company was created to serve the major airlines, Arinc is altering its products to serve the growing corporate-jet industry.

“Arinc has modified its products traditionally sold to the airlines and brought them to the business aircraft,” said Bob Blouin, a senior vice president for operations at the National Business Aviation Association Inc., a Washington nonprofit.

But the company has a long way to go to dominate the communications market for business aviation like it does in commercial aviation, Mr. Blouin said.

“They now have a good foothold, but not a lock on the market,” he added.

In addition to the transportation sector, Arinc has more than doubled its size in the last decade through work with the federal government, primarily the Defense Department.

About $340 million of the company’s sales this year will come from the Defense Department for aircraft systems, Navy engineering, Air Force weapons systems, and Army advanced applications, Mr. Belcher said.

But he said he is more focused on broadening Arinc’s commercial services in business aviation, airports and ground transportation.

“The company was content to be in its niche transportation market, but we’re more focused now on growing the commercial side,” said the former president and chief executive of Hughes Aircraft Co. of Canada — now a part of Raytheon Corp.

One product that probably will expand into other transportation sectors is Arinc’s airline check-in system.

The company developed an away-from-airport check-in service for an Orlando, Fla., hotel. Guests departing on Delta, American or Continental flights can check their luggage in the hotel lobby and have it sent to directly to the airplane.

The new system Arinc introduced this week, IMuse Express, is a scaled-down version of the Orlando unit designed for train stations, hotels, convention centers and cruise ships.

The key to introducing the system was getting approval from the Transportation Security Administration for an away-from-airport check-in station, Mr. Belcher said.

“One nice thing about the business is once you get certification and develop a product for one part of the industry, you usually can apply it to other divisions,” he said.

To keep up with the competition, Arinc is aligning with bigger players in the defense and satellite communications industries.

The company supplies aircraft systems to Falls Church defense contractor General Dynamics Corp. and does subcontract work for several other defense contractors.

“They’re a fine supplier of ours,” said Robert Baugniet, a spokesman for General Dynamics’ Gulfstream Aerospace Corp. “They market a range of communication products that go in our plane cabins, and we see them as most applicable for our aircraft.”

Arinc announced last week an agreement with Telenor Satellite Services, a Norwegian manufacturer of satellite communications products, to exclusively sell Telenor’s aeronautical services for commercial aviation.

The alliance is expected to bump Arinc’s global market share of aviation communications using satellites to 60 percent.

Mr. Belcher hopes to double the company’s size and revenue in the next five years.

Arinc’s revenue climbed 9 percent to $608 million for 2002 from $558 million in 2001, while the company showed profits of $10.2 million, compared with a loss of $13.7 million a year earlier.

The company wrote down eight unprofitable businesses in 2001, resulting in a $28.8 million one-time restructuring charge that year.

Most of the company’s short-term growth is expected to come from increased business in Europe and Asia. Arinc opened its Asian headquarters in Singapore in February and two new offices in Spain in June, extending the company’s services to 140 countries and 82 offices.

“Our business in Europe is moving much faster because the airline industry there is in much better shape,” Mr. Belcher said.

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