Bermuda Aviation Services Ltd. (BAS) has been facing a challenging time lately. The company's main activity is the provision of services to aircraft, commercial and private, at Bermuda International Airport.

The number of people flying has been widely affected by people's perceptions since September 11, 2001, the SARS outbreak and new security regulations applicable to international air travel.

Despite this difficult environment, and chiefly because of the diverse holdings of BAS, fiscal 2003 has proven to be the second best year in the company's history in terms of net earnings and earnings from operations. The secret lies in the company's corporate diversification.

Revenue from aviation services fell by $1.4 million in the company's last fiscal year, yet overall company revenues were ahead by two percent, or $0.4 million, to $19.5 million. Although aviation-related activities at BAS accounted for 60 percent of its revenues last year, they provided only 43 percent of net income.

Company-wide earnings from operations for the period were ahead by 18 percent to $1.9 million. Net earnings for the period were also ahead by 11 percent to $1.7 million, whilst expenses during the period increased by a mere 1.1 percent.

How did BAS manage to turn what, on the face of it, should have been a really tough year into one of such strong forward motion?

"Aviation is a cyclical business," explained Eugene Bean, president and chief executive of BAS, who has 30 years of experience in the industry. "You have to anticipate when the challenges are coming and/or act quickly when they arrive. You can do this, to an extent, by anticipating industry shifts through keeping up with world events and monitoring activity in the transportation industry."

Mr. Bean was quick to credit the company's success to others, however. "What we have achieved has been mainly due to our staff," he said. "People here can be trusted to do what is right, and we believe in rewarding good people."

BAS employs 180 people company-wide, including its staff in its non-aviation divisions, which contributed 40 percent of revenues last year, but 57 percent of net income. About 95 percent of the company's staff are Bermudian.

Crow Lane Bakery Ltd. showed a 12 percent increase in its bottom line this fiscal year. The bakery saw a small decline in revenues, but control of costs helped to produce the profit increase.

Weir Enterprises Ltd. has also proven to be a good investment for BAS. D. E. Mortimer posted improved results last year, with sales for the year ahead by seven percent, although BAS is at present considering selling its shareholding in Mortimer. If it were to do so, it would retain operational links via accounting services and facilities rental.

BAS is the majority shareholder in BAS-Serco, which continues to offer services to both the public and private sectors, and operates a garage for internal and external customers.

In July 2002, the company entered into a joint venture with Safeguard Security Services Ltd. to form a new security company, specifically to provide security services at the Bermuda International Airport, but the bid was unsuccessful. Staff numbers have been significantly reduced as the company has negotiated its path through these difficult times.

He believes that the company's managers respect the vision, direction and control that BAS has created, and that a strong element of trust exists between management and staff and their representatives.

The divisions of Aircraft Services Bermuda Ltd. (ASB) were the main contributors to the profits posted in the aviation sectors of the company last year. The company's catering kitchen, terminal bar and central services did not fare quite as well. With revenue in this company falling $1.5 million, it suffered a loss, a good portion of which can be attributed to a $1.6 million decline in revenues in the company's in-flight catering department. The division did produce an operating profit for the full year.

BAS has about 380 shareholders, mostly locals, and Mr. Bean sits on the Council of the BSX.