The Bubble Has Burst
Updated: Oct 10, 2020
Aldo Comas, 35, is the CEO of Terminal Zero, one of currently ten wind tunnels operating in Spain. As enterprising as he is passionate, Aldo decided to make a career out of his preferred sport: skydiving. The member of the Babylon Freefly team ventured into the indoors by building his tunnel adjacent to the country’s biggest shopping mall in Zaragoza.
Construction started in late 2017 and extended over all of two years. It was in October 2019 when Macarena Gómez, Aldo’s wife and business partner – and a well-known actress in a top-rated and long-running Spanish sitcom, finally made the first boarding call at “Terminal Zero – Ministry of Flight.”
With Macarena as well as Aldo being true A-list celebrities, it didn’t come as much of a surprise that many big names in show business and politics were present for the inaugural party on 16 November 2019.
Business was going well. Innovative concepts that the couple had developed to enhance the clients’ experience at the tunnel started to produce good results. Most notably the JAM SESSIONS that combined the flying performances with live music by walk-on talents on Thursdays.
Then came Friday 13 March 2020 and the declaration of a state of emergency by the Spanish government. From the early morning of 16 March all of Spain was put on a total lockdown. Initially to apply for a period of 15 days, it was extended by parliamentary votes several times – virtually through the end of June for some regions. More than just bad for business.
“We have been operating our wind tunnel for five months. Just five months! We encountered all the classical problems of a facility that had just opened up. Historically, there is no wind tunnel that is profitable and moves forward until two years later. You need to build your brand and you need to create understanding on the part of your clientele, etc., etc.
We came into the tunnel business at a time when the bubble was still there, maybe because many operators had lowered prices to make flying more accessible and ‘democratic’ for everyone. Something I strongly believe is achievable. The tunnel manufacturers, on the other hand, maintained their prices, even though they, too, could have reduced margins somewhat. That they didn’t do so started to make the “bubble” a little less sustainable.”
Aldo’s outlook is generally that of an optimist. His entire professional career as a cinematographer, actor, musician and entrepreneur can be described as a “succession of successes.” Nevertheless, he is sufficiently attuned to the dynamics of the world economy to realize that this situation is different now.
“I can hear everybody saying that it will all work out, even at this stage. But the world of wind tunnels has changed. Because the bubble has definitely burst.
In our case, after only five months of operation, we are in a rather bad situation. Neither I nor my partner have the funds required to deal with the fallout of COVID-19 on our own. We depend on a society that functions normally but suddenly find ourselves in a lockdown.
Now, after reopening just a few weeks ago, we are at risk of getting shut down again because of the increase in infections around Zaragoza. A new outbreak! I have several friends who have infected themselves. There are those who claim that it is a little less dangerous this time, that there is a lower viral load, but we are back on a partial (Stage Two) lockdown. All the while the bills keep coming in. If we are to survive this situation, we will need to have a lot of people understanding us better.”
Aldo already made the experience with a second venture of his, the Burning Spring Skydiving Festival. Modelled after the Burning Man that is held annually in Nevada's Black Rock Desert in the USA, the extravaganza was scheduled to take place for the fourth time at Skydive Empuriabrava in June. Travel and other restrictions required him to cancel it. Striking the balance between a refunding policy and a sensible call for goodwill is a challenge – even for the big airlines. Listen to how Aldo handled it.
Dialogue is also required in another delicate situation that has arisen with tunnel hours sold at rock-bottom rates – with the risk of excessively limiting the schedule for first-time flyers.
“We have a lot of pre-sold hours. Right now, on the weekends that we are open, if all the pro-flyers came to redeem those hours, we would probably go bankrupt after month one. We need to tell these pros, ‘Guys, you bought these hours very cheap, but right now you will need to delay flying them off, hold on to them and redeem them over two or three months.’ Most of our clients do understand the predicament we are in. They bought at prices you only see in Russia and know that flying them off to the detriment of our normal-fare first-timers would make matters even worse for us.”
Terminal Zero is not alone in having significantly lowered rates for experts. The entire industry, generally, seems to resort to an aggressive price policy in order to relaunch with vigor.
“Well, that started even prior to COVID-19. The reason: tunnels are no longer the bonanza business they were five years ago. Things were already changing and the virus ended up smashing the order of things. The more wind tunnels you have, the fiercer the competition between them, the greater the need to discount rates across the board. These discounts can be as much as 50% and everybody seems to do them. The operators – but not the manufacturers! Even if they are not selling their tunnels as they used to. Maybe the time has come for them to make an effort in terms of lowering their prices too.”
Just a few days ago, the world’s leading manufacturer iFLY announced that it would add a new product line: modular tunnels for the outdoors, ‘with a fast build and low costs, in order to meet the needs of customers who are seeking an efficient yet smaller Indoor Skydiving facility, which can even be moved if necessary.’
“Tornado, a Russian company, has been building wind tunnels for 300,000 € for some time. Yes, they are kind of noisy, yes whatever else some consider to be major deterrents, but the costs are 300,000. Compare that to the 3+ million € manufacturers charge for the standard technology. Cheaper wind tunnels are an option. I firmly believe that all manufacturers will have to adapt and consider low-cost one way or another. Aerodium, the Latvian company, has been at it for years. What they do is absolutely amazing. They built up an almost independent brand, kept mostly to themselves and made it to the Olympics as well as to Hollywood – primarily with their outdoor models. I could think of a billion things to do with an outdoor wind tunnel … Just imagine: a few of Aerodium’s super-sized Perytons set up in a stadium – wow! We could invent a bunch of new sports, flying around stadia, having a ball …”
The COVID-19 reality does not contemplate stadia or crowds for the time being, not even for football and other high-profile sports. No one will make it unscathed through the current crisis. It will take a toll on all the tunnel manufacturers and on all the operators. The questions being: who will be left standing after the last punches are thrown.
“I don’t even know how many tunnels iFLY controls, but even if they should have 50% or more going out of business, they would still have something to work with. As an analogy: if you own Coca Cola you have more reason to be optimistic in a crisis. It is that small guys like us – the people who thought that a single tunnel could be a viable proposition in the short to mid term – who suffer the most.”
But isn’t it up to each operator or manufacturer to try to find a solution to the specific set of problems. Aldo has been thinking outside the box virtually all of his life. Could that give him the skill set to come up with the idea that saves the day? How does Terminal Zero position itself to survive?
We also discussed new and innovative competition formats with Aldo. Access the second part to the interview right here!