Air Fair Asks Creditors' Help

August 23, 2004
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MUSKEGON — Organizers of the Muskegon Air Fair promise to pay off debts and return next year with a “great” event that will restore financial stability.

After two straight years of losses, due largely to poor weather forecasts and conditions that kept attendance down, air fair directors are looking for help from vendors via extended payment terms to help them dig out of a financial hole. They also plan to move the event’s 2005 date back to late July or mid-August.

“The choice for the air fair and the board right now is very simple — we need to do a really great show for 2005 and we need some support from our vendors,” said Rich Robinson, a partner in the accounting firm Conn, Geneva & Robinson PC who serves as treasurer of the Muskegon Air Fair board of directors.

“Our goal here is to get everybody paid and look at this as a speed bump over the long haul,” Robinson said.

One of West Michigan’s premier summer events, the Muskegon Air Fair faces tough finances because of losses on shows in 2003 and 2004, resulting in a depleted reserve and a six-digit deficit from this past July’s event.

To erase the deficit, air fair directors are asking vendors to extend payment terms and, if possible, offer discounts. The air fair is not asking any of its 75 vendors to forgive their debts and hopes to have all debts paid off before next year’s event, Executive Director Terry Grevious said.

We’re going to pay everybody. We just want a little bit of time to cash-flow this thing properly,” Grevious said. “We had a couple years of bad luck.”

Hampered by bad weather during the July 4 weekend, the Muskegon Air Fair this year drew only 32,000 over three days. The fair needed attendance of at least 50,000 to break even, Grevious said.

Also creating financial problems were declines in corporate sponsorships and in the sale of hospitality chalets to businesses, which account for a large share of revenues needed to cover the cost of staging the air show. Air fair directors attribute the declines to a delay until March in marketing chalets and sponsorships as they ironed out a lease agreement with Muskegon County for the use of the county-owned airport.

The tough year in 2004 came after an air show in 2003 which, despite the allure of the U.S. Navy’s Blue Angels that drew more than 83,000 people over three days, generated a loss that was the result of higher expenses to stage the show and early-morning rains that affected attendance.

In formulating a business plan to erase the 2004 deficit, air fair directors decided to move the event away from the Fourth of July weekend, where it competes for attention and attendance with Muskegon’s annual Summer Celebration. Directors, who moved the event to early July three years ago in order to book the Blue Angels, found that the holiday weekend is not a time when corporations buy hospitality chalets to entertain clients and employees.

“I just don’t think it’s a big corporate weekend,” Robinson said. “That’s a weekend for a family affair, not to bring 200 friends, vendors and suppliers to the air show.”

The Muskegon Air Fair has mounted a much more aggressive marketing push for sponsorships and chalets for 2005, the event’s 22nd year, and has had some early verbal commitments, he said.

In setting a date for 2005, air fair directors will have to wait until later this year for a decision from the U.S. Department of Defense on their request for a performance by either the U.S. Navy’s Blue Angels or the U.S. Air Force’s Thunderbirds jet teams.

“In this business you don’t often get to pick your day,” Grevious said.

Despite the present financial difficulty, organizers see a bright future. They believe an air fair in Muskegon remains a viable venture, Grevious said.

“The business model is still sound,” he said. “We feel the event’s got a strong future. With the support of our creditors and our community, we’ll get through it just fine.”    

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