Travel Agencies and Transportation, Distribution & Logistics

Under Grueninger, Ambassadair division chartering growth

April 21, 2008

Not much surprises the folks at Grueninger Travel Group. They've been in the business 54 years, ever since Othmar Grueninger started it while a German exchange student at DePauw University.

So it's notable when Othmar's son and company president, Michael Grueninger, is taken back.

He admits he didn't think the firm's Ambassadair travel division could fill a chartered Republic Airways jet with golf fans for a one-day trip to Augusta National Golf Club--at $900 a head.

"Never thought it would work. It sold out. Blew me away," Michael Grueninger said.

If anything, the Augusta trip underscored what Grueninger, 41, has known since buying Ambassadair in 2005 from now-defunct ATA Airlines: Many travelers once enamored with dirt-cheap fares they can book online want something more than low price.

"People are willing to pay for the service," Grueninger said. "I think it's getting back to that."

Therein lies a bit of irony: Ambassadair is thriving selling sometimes-pricey group travel while ATA couldn't provide airline service cheap enough to turn a profit.

Ambassadair has grown to about 45 percent of Grueninger Travel Group's business. Ambassadair's revenue climbed 30 percent in 2007, according to the privately owned firm that doesn't disclose financials. Its departures grew to 270 from about 200 in 2006, to destinations ranging from Alaska to Switzerland.

Grueninger's bread and butter remains travel arrangements for corporations, schools and affinity groups, such as supporters of the Indianapolis Symphony Orchestra and Eiteljorg Museum of American Indians and Western Art. Other clients include the University of Notre Dame and Indiana University alumni groups.

Combined, all the Grueninger divisions employ about 50 people--about 20 of those work at Ambassadair.

New and old

Comparisons to Ambassadair under its previous ownership are difficult.

Technically, Ambassadair is no longer a "club," as the Grueningers eliminated the annual membership fee requirement. When they bought Ambassadair for $300,000 in 2005, during ATA's first Chapter 11 bankruptcy, they got a club with 25,000 members and a list of 180,000 travelers Ambassadair had compiled since George Mikelsons founded the company in the early 1970s.

These days, Ambassadair still flies aboard chartered aircraft, as under ATA, but 90 percent of its flights now are aboard scheduled carriers.

Ironically, the last Ambassadair charter flight of the spring break travel season was to have been on an ATA aircraft. Late last month, the airline took a group, including Michael Grueninger and his family, to the Dominican Republic. While on the trip, he was tipped off that ATA might be about to cease operations. Just in case, Grueninger scrambled to call other charters to fly the group back home.

"I didn't get much sun on March 30. I was on the phone a lot," he said.

On April 2, ATA's parent, Atlanta-based Global Aero Logistics, confirmed it was shutting down ATA immediately. Another Global subsidiary arranged a flight home aboard another charter airline.

"It was a really sad moment when ATA left. ATA was founded from Ambassadair," Grueninger said. "The sad part was that it was a family business in Indiana that people grew up with."

Some similarities

Ambassadair is still a family business. Grueninger family members, known by some staffers as "the G's," are everywhere in the company's Meridian Tower offices. Michael's wife, Erika Grueninger, is vice president of human resources. Othmar's wife, Libby, is vice president of finance and marketing.

Ambassadair passengers still travel together on the same plane with a "travel director" who sweats the logistical details and provides guidance. And Ambassadair continues to publish its Journey magazine, which long has been a coffee-table favorite of travel buffs.

Group travel has always had its appeal to Ambassadair die-hards, whether singles who want camaraderie or older folks who don't want to travel alone, said Bridget Tursi, who was a full-time tour director at Ambassadair under ATA and now is one of its product development executives.

But "there was a lot of concern, I remember, that it wouldn't be the same [under Grueninger]," she said. "It's been better than what I'd thought."

To Michael Grueninger, the Ambassadair model is better than what he might have thought it would be, thanks in part to changing demographics. Baby boomers now have money to travel but don't know enough about a country to wing their own arrangements.

Some trips are anything but exotic, including a bus trip to West Baden or to attractions in Michigan and Wisconsin. Others are premium, including a Safari in Botswana next month that starts at $7,439.

"I think we're seeing a little more of an upscale product" option than under ATA, Grueninger said.

Ambassadair may take more of a national focus down the road, he said. It may even return to a membership option--perhaps with various levels of membership and corresponding perks.

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