Limousine Company Gets Back In Gear Following 9-11 Slump

By DAVID GREENBERG
Staff Reporter

Like so many small business owners in L.A., Michael Nogueira feels like he's finally back in action.

Six months after the terrorist attacks left his limousine and party planning business in a shambles, Nogueira said he's getting a sense that the bad days may be over.

"I feel like I'm starting over," said Nogueira, who owns Michael's Limousine and Party Rentals. "But I'm anticipating a good year. I've already gotten some big accounts that I've never had before. People are starting to spend a little more. Even though we're at war, people want to get on with their lives."

Nogueira had added a party furniture rental operation to his limousine and funeral coach service in late 1999.

But in the wake of the Sept. 11 terrorist attacks, when the demand for entertainment and luxury services took a nosedive, the party rentals helped him merely stay afloat.

Now, six months later, airlines are running more flights and people are planning more parties and they're calling him.

Although January and February are generally the slowest months of the year, Nogueira said he is now receiving reservations for May and June weddings, high school proms and is seeing an increase from business travelers.

Driven by small shops

Michael's Limousines is one of about 150 limousine operators in L.A. County, the majority of which are mom-and-pop operations that generate less than $100,000 annually, according to Tom Mazza, executive director of Marlton, N.J.-based National Limousine Association.

"The discretionary trips are really where the small guys make their money when the vehicle is being rented by the hour," he said. "Those trips went way down after Sept. 11. People didn't feel like celebrating."

Nogueira periodically transports celebrities boasting a client list that includes Jane Seymour, Jeff Goldblum, Charlton Heston, and Lindsay Wagner. And his cars have been used as props in "Jurassic Park 2," "The General's Daughter" and a slew of music videos.

But his steady work comes from transporting businesspeople to and from airports and brides and grooms to and from weddings. Some other jobs entail transporting partygoers to entertainment venues and clubs around town on weekend nights.

Revenues dropped to $30,000 during the last six months of the 2001 compared to $60,000 during the first six months due largely to the airports shutting down immediately after the attacks and many people afraid to fly in the months after the facilities reopened. Within two days of Sept. 11, two wedding parties canceled their reservations while three others postponed, Nogueira said.

Started in 1983

Nogueira began his transportation business in 1983 when he and his parents paid a combined $7,900 for a 1979 Lincoln Town Car. He currently has a five-vehicle fleet.

With his vehicles finally paid off, Nogueira said he is managing to keep his overhead costs down in part by using only one part-time employee to answer phones and a handful of independent drivers who make $8 to $11 per hour.

But like many small operators, Nogueira found himself shortly after Sept. 11 at a disadvantage competing against the larger limousine companies, which have a stranglehold on most large corporate accounts and can undercut fees to attract new business.

As revenues fell last year, Nogueira was forced to increase his advertisement budget with newspaper ads, fliers and a newly created Web site. In the first two months of 2002, he already surpassed the $3,000 he spent all of last year on advertising.

"Because things slowed down, you have to get out there and do more outreach," he said. "You've got to spend money to make money. But I can see it it's working for me. It's starting to increase my business."

As a result, he projects limousine revenues to jump to $120,000 this year, up from $90,000 last year, from fees of $65 and $75 per hour, respectively, for an eight- and 10-passenger car.

Revenues from his three hearses, which are available at $50 per hour when funeral homes need additional help, are expected to drop slightly to $80,000, from $97,000 last year. Nogueira attributed the decline in part to funeral home consolidations.

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