Taking Off: Traverse Stainless & Millwork enjoys booming airport construction business

Quitting a steady job to start your own business can be a risky move. But for David Bitely and Scott Neil, friends with decades of experience in woodworking and steel fabrication, leaving jobs they were dissatisfied with turned out to be a profitable decision.

Newark Liberty International Airport.

Traverse Stainless & Millwork, which manufactures dozens of  wood and steel products, including stainless steel cabinets, dining buffets and ticket counters, has soared since Bitely and Neil launched it in 2016.

Most of Traverse Stainless’s customers are airlines and airport retail shops throughout the United States. Its largest customer is Delta Airlines. The company also serves the banking, restaurant and residential construction industries.

“The amount of work out there is tremendous,” Bitely said. “At this point, we can’t handle a lot more.”

Sales at Traverse Stainless, which employs eight workers, were $1.4 million in 2018 and are expected to hit $1.8 million this year, he said, an 80 percent jump from sales of $1 million in 2017.

The company’s performance reflects booming growth at U.S. airports. Construction projects at airport terminals are expected to hit $13 billion this year, according to industry market research firm IBIS World.
That’s partially due to airports requiring retail and food service tenants to freshen stores after five years and undertake complete renovations after 10 years in business, Bitely said.

Construction growth in the airport and airlines sectors is so strong that even the much-debated tariffs on steel and aluminum are having virtually no impact on building projects, he said. Last year, the Trump administration slapped a 25 percent tariff on steel and a 10 percent tariff on aluminum imported from dozens of countries, including Canada, China and Mexico. Those tariffs remain in effect.

Bitely said steel prices from his suppliers have jumped five percent every three months since the tariffs were enacted, but he’s had no trouble passing those costs on to his customers. “The tariffs have not slowed us down by any means,” he said. “Everyone complains, but the business is still moving. It’s not affecting us.”

A bigger worry for Bitely is making sure his company meets stringent construction completion deadlines for its airport projects. Missing a deadline can cost a contractor as much as $4,000 for the first day and $3,000 a day for every day after. “The financial penalties are severe,” he said. “Sometimes we have to work at night so the airport stores can operate during the day. It’s a hard and demanding job.”

Bitely started his career in the early 1980s, working for a company that made cabinetry for an airline. Over the years he worked for several other companies in which he built and maintained relationships in the airline industry that are paying off for him today.

Contractors and their employees must undergo background checks and obtain a variety of federal security clearances that can be difficult to obtain in order to work at airports. Bitely said his long experience in working for airlines and airports has been beneficial in obtaining contracts.

“The more often you get into airports, your security clearance goes up,” he said. “And as your security clearance goes up, the work gets easier to get. If you do a good job, they want you again.” A recent morning found him driving through the Pennsylvania mountains on his way to build a Delta Airlines Sky Club lounge at John F. Kennedy International Airport in New York City.

Traverse Stainless’s most difficult job was recently installing custom-made countertops and other fixtures for several Wasabi sushi restaurants in New York City, Bitely said.

All of the fabrication, including heating and bending a Corian-type material, known as solid surface, and installing LED lighting in countertops, had to be done on site, rather than manufactured in the company’s Traverse City shop. And then there was the transportation of those materials through New York City, one of the most congested cities in the world. “The complications of working in New York were intense,” Bitely said. “Getting things done was tough.”

Traverse Stainless also has taken on some quirky jobs. It once was approached by a man who wanted a stainless steel staircase installed in a house he was building on the Old Mission Peninsula. “We thought it was a crazy idea” because stainless steel can be slippery, Bitely said. But he built the staircase with a nonskid surface on the steps to the home owner’s satisfaction.

Airport retail stores and airlines are choosing more stainless steel and granite materials from building contractors, a sweet spot for Traverse Stainless. “They’re using less laminates and woods,” Bitely said. “Everybody is focused on longevity and appearance.”

But despite booming construction demand in the air travel industry, Bitely said he’s planning to limit his company’s annual sales to about $2 million a year. Traverse Stainless might try to hire a couple more skilled trades workers — if it can find them in an extremely tight labor market for woodworkers and steel fabricators.

“We don’t want to get much bigger. We like where we’re at,” Bitely said. “We’ve seen companies grow too fast and lose control of profits.”

 

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