Air born

Part of the fun for Dick Kagy is problem solving. As the president of a rental company and someone who has served the industry since the late ‘70s, he knows how to spec a job. And as the largest independent yard in Indianapolis, his company AirWorx has got the equipment to do any job.

His standing in central Indiana has made him the go–to man for standard and niche equipment. Like the mechanic with the hand toolbox, Kagy views his fleet the same: if he doesn't have the right product for a specific job, he'll probably get it, or at least his appetite for following new product developments and fleet size suggests this. His rental yards in Indianapolis and Warsaw, respectively, carry rough terrain forklifts, aerial work platforms, trailers and more. Aside from AirWorx, he runs two other divisions: RepairWorx and SupplyWorx (see sidebox). His concept was to provide a one–stop–shop for his client base. And it's paid off.

Kagy and AirWorx couldn't be in a healthier state. Experiencing the gold rush that left the industry with deeper pockets the last couple years, the rental company is also fortunate to be in the thick of a strong boom within the state's capital. The bad economic conditions of bordering states Michigan and the upper half of Ohio have not affected his area. What about the weak residential housing market?

Thomas van der Meulen, CEO of AirWorx and Kagy talk about this periodically and think in their area, the market is still decent. “Last year was also our record year for housing starts,” says Kagy. “Even though this year may be down from last year, it's probably still up from 2005.”

Kagy says AirWorx has equipment on pretty much all the major job sites currently in Indy, which includes the new Colts stadium, the new airport, Indiana University–Purdue University campus and the Honda plant just 45 miles outside the city. To his estimation, the work is plentiful until 2009.

SinceAirWorx was founded in 1996 with only a handful of machines to its name, it has risen to be the largest independent yard of the aerials rental scene in central Indiana. With a 700 machine fleet, servicing station, supply shop and two yards in the state, the company continues to grow. John Wyatt talks with its President Dick Kagyon why business is booming.

President Dick Kagy at AirWorx's main office in April.

Being in business at the right time in the right place has allowed his company to grow. When he started AirWorx in 1996, he had close to 20 years experience in the industry, beginning as a regional salesman for a construction equipment company in St. Louis, relocating to Indianapolis to work for a Marklift distributor. After that he was a minority partner with the rental company Booms & Scissors until it was bought out in 1989. Through all these positions, Kagy developed industry contacts, followed trade journals for the latest in product development, and watched the trials and errors of other rental yards. With a wealth of knowledge and a customer base that followed him to his new operation, each year progressively has gotten better for the company since it began 11 years ago. In 2004, AirWorx purchased Greater Diversified Supply, which added 200 aerial lifts to an already building fleet. Today, the company has approximately 700 machines.

“But the question is how big do you want to get?” he says. “You can't do it buying all new equipment; you have to mix in used. We buy more used than we buy new for the rental fleet.”

Old and new

Kagy says one of the major gaffes a lot of rental yards make is to purchase all new machines, and then rent a $70,000 machine out for $1,500 a month. Do the math and that machine will pay for itself in roughly four years, not the return on investment model Kagy follows. Other bad business practices he sees are companies operating strictly on cash flow, not looking at the profits, offering cheap rates and free freight – “all the mistakes that rental companies can make long term that catches up with them,” he says.

He believes his company offers a fair price and a solid package. For one, he has a loyal customer base that has worked with him for at least two decades back, which is an advantage he says he doesn't take for granted. He also isn't afraid to purchase used gear, invest in its refurbishment and get the machine looking like new equipment.

AirWorx also makes a commitment to keeping customers happy. For example, it offers what it calls a “down time/up time” guarantee. If a customer has a machine not functioning, the rental yard will have it running inside two hours plus drive time. If it can't be fixed, it will be replaced within four hours plus drive time, or, it will pay a customer the double hourly rental rate until there is a solution. He says this past issue hasn't been a problem yet.

Neat niche

Aside from the rental fleet, AirWorx is also a dealer. It is a certified distributor for JLG's Lull line of telehandlers, and also can sell lines such as Skyjack, Genie, UpRight, Snorkel, and others.

“Sometimes, the customer drives with what we provide them,” Kagy says. “But there's also a niche line like Custom Equipment, who has the Hybrid scissor lift.” He says contractors have really taken a shine to this particular machine. He says because of its light weight, it can easily ride in elevators without exceeding the load capacity and works well on floors with low load ratings. He says a lot of drywallers and electricians have been renting the machine.

It' the niche products that really stimulate Kagy. He talks of a recent site that he went to inspect at the Indiana University-Purdue University campus. The university's maintenance department needed to clean the windows on an 80 foot high atrium but there were no easy way to get equipment in the building.

Kagy went to the site, decided a Denka atrium lift would be the best machine to gain access through the stepped building entrance. Kagy says, “The window cleaner guy is now a hero because he promised the university he could get it done.” He says this kind of personal service helps to retain and build his customer list.

Sales and safety

Kagy wears many hats with the company and aside from being the president, he also serves as one of the company's salesman and as its safety instructor. He finds both roles challenging, for different reasons. He wishes he could check in on his customers more than he finds currently possible. Ideally, he'd just be happy to be the “golf ambassador” but knows maintaining relationships is about more than that. He is striving to spend more time with them, whether on the greens or over coffee.

He also values safety and this is evident in the classes he conducts. Oftentimes, he says, contractors expect a program to last a short morning. “I've got competitors that will go train 12 guys in half an hour,” says Kagy. “I can't do a class in less than three hours.”

Contractors installing 10 foot by 24 foot glass panels with JLG's Lull 1044C–54 telehandler and the 400S telescopic boom, part of AirWorx's fleet at the Midfield Terminal at the New Indianapolis Airport. The project is scheduled for completion in late 2008.

AirWorx's safety training is for contractors and operators that use telehandlers and aerial work platforms and is split in two parts, theory and practice. For the hands–on segment, he tries to emphasize the machines features, not just the forward/backward/up/down commands. He says safety issues such as seat belts and load charts are just a couple examples that many operators ignore. “One of the things I tell the guy in the class is that the load angle indicator is not the pocket of air between your butt and the seat – that's how the old timers do it,” says Kagy. “They can feel it right here when it's not going to go. They stop when tires start to go up in the rear.”

AirWorx reputation in the safety department has rewarded him most notably with some big contracts with pharmaceutical king Eli Lily. Safety and responsibility do pay, it seems.