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Stay Competitive: Keep Your Aircraft Flying

by David Wyndham 1. April 2008 00:00
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As we head into spring, we are seeing crude oil prices easily staying above $100 per barrel. Certain sectors of the economy are soft. If your company aircraft operation is being hit twice: high fuel costs and a decline in profits (or increased losses), you may be inclined (or directed) to cut back on flying. This is bad for two reasons.

Reducing your flying hours drives up your average costs. A light jet that has a variable cost per hour of $1,750 will cost $700,000 to fly 400 hours per year (fuel & maintenance reserves). With a typical fixed cost of $400,000 per year, the annual operating budget is $1.1 million, or $2,750 per hour. Reducing your flying 15% to 340 hours annually gives you variable costs of $595,000 plus fixed costs remain a constant $700,000 for a total operating budget of $995,000 - only a 9.5% reduction. Plus your average total hourly costs increase to $2,926 per hour.

Reduced flying may make your operation seem less important to the company's mission. The effects of the reduced flying on the budget are immediate, but the potential loss of business from reduced productivity and reduced contact with customers or vendors won't be direct and won't be noticed for months.

You want to be proactive for your company. Here are three ways to stay competitive by marketing your services even harder than ever.

Remind folks of the time saved. Airline travel delays were lousy last summer and this summer might be worse. Spend six hours on the ground watching thunderstorms rip apart the airline schedule and you'll know what I mean. Longer delays mean even greater time savings for the people who fly on your business aircraft. Put together some metrics from 2007 and 2006 showing the estimated time saved. The US Bureau of Transportation Statistics lists US Airline On-Time Statistics if that is a help.

Remind your executives how much more productive they are. Not only by the time saved, but by how productive they are in the safe, quite, private cabin of your business aircraft. You can do this again by publishing in-house statistics, quoting studies, and by doing an in-house survey asking how much time and how productive your passengers think they are by using the company aircraft.

If the aircraft is reserved for "C-Level" executives only (CEO, COO, CFO, etc), see if you can expand the access to the company aircraft by one-tier lower executives. It's not just the CEO who can use a few quite hours in the aircraft to really work and think. What about your sales teams or new product development teams? If you don't already use the company aircraft for some of these functions, I'd recommend that you seriously consider it. Finding new opportunities isn't easy and the aircraft gets your people out with your customers.

As a possible fourth way to be competitive, evaluate putting your aircraft on someone's charter certificate. If your aircraft is under-utilized or has a predictable schedule, you may be able to offset some of your costs with charter revenue. When not used in-house, your aircraft would be available to a charter company who would sell hours on your aircraft and pay you a portion of the revenue. There are a number of considerations here, not to mention the possible cost of Part 135 conformity, inspections, and increased wear and tear by charter customers. It can and does work for folks, so it may work for you.

There is no easier and more productive time machine than the aircraft, if used wisely. Get out there and market your services harder than ever. Focus on the positive results business aircraft bring, and let them know you are on their side.

Globalair.com would like to ask you a few questions; we would appreciate your commenting.

Are fuel cost cutting into your flying?
What are you doing to keep your aircraft flying?

We all gain by your experiences so please share.

Other related information:
Average fuel cost nationwide (by region): https://www.globalair.com/airport/region.aspx

FAA's Prosecutorial Discretion

by Greg Reigel 1. April 2008 00:00
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When the FAA believes that a regulatory violation has occurred, it has a variety of options for dealing with that violation ranging from issuing a warning or assessing a fine or monetary penalty up to suspension or revocation of an airman's certificate. The FAA has the power to choose which option it feels is appropriate for dealing with a particular regulatory violation. This choice is called "prosecutorial discretion."

In order to assist its inspectors and regional counsel in exercising this prosecutorial discretion, the FAA publishes guidance and policies that, one would hope, will be used and applied in a uniform and consistent manner. But, what about when this doesn't happen? Can the FAA ignore its own published policy and guidance and pursue an enforcement action against an airman even when pursuit of that action contradicts the policy and guidance? According to a recent NTSB opinion, the answer is: yes!

In Administrator v. Murphy and Vernick the FAA alleged that airman Murphy violated FARs 91.13(a) (careless and reckless), 91.123(b) (Compliance with ATC clearance), and 91.111(a) (Operating near other aircraft) and that airman Vernick violated those sections in addition to FARs 91.123(a) (Compliance with ATC clearance) and 91.183(c) (IFR communications), all in connection with a 120 foot computer-detected altitude deviation that resulted in a minimal loss of separation between the airmen's aircraft and another aircraft. After a hearing, the Administrative Law Judge ("ALJ") found that the airmen committed most violations as alleged.

However, the ALJ also found that the airmen met all of the criteria for application of the FAA's policy of handling altitude deviations of less than 500 feet administratively as prescribed in FAA Order 2150.3A, Compliance and Enforcement Program, Compliance/Enforcement Bulletin No. 86-1. He further noted the absence of any aggravating circumstances that would make the airmen ineligible for administrative action, rather than enforcement action. As a result, the ALJ concluded that "[b]y bringing this matter as an enforcement action, and not handling it administratively, the Administrator violated her policy set out in [86-1], and deprived the Respondents of the benefits they were entitled to under that FAA policy." The ALJ then reversed the FAA's order and dismissed the complaints against the airmen.

Not surprisingly, the FAA appealed to the full NTSB Board arguing that the FAA's exercise of prosecutorial discretion is not subject to Board review; that the FAA has the prerogative to issue an order of suspension when the facts support one; and that the Board has no direct authority over the FAA's exercise of prosecutorial discretion. In response, the airmen argued that the FAA was bound by Order 2150.3A to pursue administrative rather than enforcement action. However, the Board agreed with the FAA.

The Board stated that it lacks the jurisdiction to review the FAA's determination to pursue a matter through legal enforcement action. Once a petition for review of an FAA order is filed, the Board's scope of review does not extend to an evaluation of the procedural steps leading to the issuance of that order. According to the Board, "[t]he discretion to pursue one remedy over another or to pursue enforcement action at all is within the Administrator's purview." Although the Board will review prosecutorial discretion in the prosecution of an enforcement action once an order is appealed, that has no bearing on the FAA's right to prosecute an airman for an alleged violation. As a result, the Board rejected the airmen's arguments that Order 2150.3A precluded the FAA from pursuing its enforcement action.

However, fortunately for the airmen, the Board agreed with the ALJ that waiver of sanction was appropriate. First, the Board observed that the FAA did not introduce Order 2150.3A with its Sanction Guidance Table into evidence or request deference to its selection of sanction based upon the Order, as was its burden. Second, the Board agreed that the violations were "less serious" and did not involve mitigating circumstances.

Not sure about you, but it doesn't seem quite right that the FAA can publish its enforcement rule book (presumably so everyone is on notice and aware of how they will be treated - e.g. uniformly and consistently) but then disregard its own policy to pursue an enforcement action for an apparently "less-serious" violation. Interestingly, Order 2150.3B (the successor to 2150.3A released this fall) contains no such recommendations for administrative action. It merely lists the criteria that must be met to qualify for administrative action. However, be forewarned, Order 2150.3B appears to have a distinct preference toward certificate action, rather than administrative action. Imagine that!

What's your opinion?

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Greg Reigel

Business Aviation Industry Focus: Gulfstream G159

by Jeremy Cox 1. April 2008 00:00
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Welcome back to the developing historical narrative of the Business Aviation Industry. This month's business aviation focus is centred on the first true 'Businessliner' the G159 produced by Grumman Aircraft Engineering Corporation (GAEC) on New York's Long Island at Bethpage, in the late 1950's. This aircraft is most fondly known as the Gulfstream One / 'GI', pronounced: "Gee-1." GAEC started designing and building aircraft in 1929, after Leroy Randle Grumman founded the company. GAEC specialized in producing amphibious aircraft for the US Navy. Once the post WWII peacetime 'tool-down' well and truly took a big bite into GAEC's income, the company attempted to re-focus their energies towards the rapidly developing business aviation sector. The Beech 18 had a firm grip on the mid-size business market, and the venerable ex-military Douglas DC-3 was not being developed any further by the manufacturer to satisfy the portion of the business demand that called for a large executive transport aircraft, therefore Mr. Grumman decided to research the feasibility of designing, and marketing the modern replacement equivalent of the DC-3 corporate liner. Hence the G-159 was born. The basic Grumman G159 design was derived from the US Navy S2F Tracker, manufactured by Grumman for the US Government.

The 'Gulfstream' name was first coined by Henry 'Hank' Schiebel, a company sales executive who was in charge of the initial G-159 concept program, from the customer service point of view. He put many hours into research and round-table discussions with the managers of several of the countries largest flight departments, with the goal of designing and building the best possible long-range, large business aircraft that would sell successfully enough to put GAEC back into the black. The range of the G-159 was compared to distance required to cross the Atlantic, hence the name 'Gulfstream.'

The FAA issued the Type Certificate approval for the G159, Gulfstream I Transport Category Aircraft in May of 1959. This purpose-built, 19 passenger business aircraft rolled off the line with a maximum take off weight of 33,600 lbs, which was later increased to 36,000 lbs with the incorporation of several structural modifications. Powered by two 1,950 shaft horsepower, water/methanol injection (for boost during take-off), Rolls-Royce Dart Mark 529-8E engines turning massive 11.5 foot diameter Dowty Rotol 4-bladed propellers (the same props installed on the four-engined, RR Dart powered Vickers Viscount),the G159 would cruise at 350 MPH. It had a range of 2,200 miles, plus 260 miles and 45 minutes reserve. It would pressurize the cabin to give a 5,500 foot cabin altitude at 25,000 foot actual altitude. Its maximum certified cruising altitude was 30,000 feet, if an AiResearch GTC 85-37-2 Auxiliary Power Unit was installed and operating, to boost cabin pressurization. This was the first twin-engine business aircraft to be certified in the USA for a cruising altitude of 30,000 feet. It met with immediate success when it was ordered by virtually all of the then, largest US corporations. WHY?

The G159 was the first model that started the venerable and what some consider being, the ultimate choice in business aircraft: the Gulfstream business jet series. The same fuselage tube (dimensional design) is shared by all of the Gulfstream series, with the exception of the newest family member that is expected to roll off the line in Savannah, Georgia sometime in 2010: the G650. The G159 boasted a 6.1 foot interior 'stand-up' cabin height, with a width of 7.3 feet, added to a cabin length of 35.6 feet, the interior volume was cavernous at 1,100 cubic feet. The standard seating configuration provided executive seating for 12. The right hide credenza refreshment cabinet even boasted an AM radio for in-flight entertainment. Additionally there were a galley and baggage compartments up front between the main passenger cabin and the airstair entryway. In the back of the aircraft there was a fully enclosed lavatory and washroom, behind which was the signature in-flight accessible baggage compartment, which still features in all of the subsequent Gulfstream series aircraft that were to come after. The captain and the co-pilot fared as well as the passengers, when seated in their well appointed and comfortable flight deck. There was even a Jumpseat that allowed a cabin flight attendant to ride along to provide cabin service, and yet remain out of the way, when his/her services were not required by the passengers.

GAEC was one of the pioneer OEMs in the concept of producing and delivering a 'green aircraft' to it's customer in an un-furnished, un-painted condition, with only sufficient avionics to ferry the aircraft home from Bethpage, NY to one of the four authorized completion centres that were strategically located around North America. These centres were: Atlantic Aviation in Wilmington, Delaware; Pacific Airmotive Corporation of Los Angeles, California; Southwest Airmotive of Dallas, Texas; and Timmins Aviation of Montreal, Quebec, Canada. The launch customer's aircraft, Sinclair Oil's serial number G-159-004 was completed by Pacific Airmotive Corp within three months, and entered into corporate service with the Sinclair Oil Flight Department at the Westchester County Airport, near New York, on September 28th, 1959. A total of 196 units were produced between 1958 through 1969. There are 63 that are still in operation around the world as of this writing. Not sufficient numbers to rival the targeted DC-3, but enough to enable virtually all of the largest corporations of the world, at that time, to enjoy airline safety and speeds, in one of the largest business cabins available in the early to mid 1960's. The rest is history; especially when one looks forward to today's modern-day off-spring G550, which is a direct descendant of the G-159 "Gee-one!"

Okay, I will see you next month as we continue this look-back at the history of various aircraft that have become synonymous with business aviation. We have the Lockheed Jetstar, the North American Rockwell Sabreliner, the Learjet 23, and the Dassault Falcon 20 still to discuss in detail. We may even go forward beyond the 1960's and take a look at later 'watershed' aircraft that have come into existence only because of the business aviation field. If you have a suggestion for me as to a specific business aircraft that one of these future Business Aviation focus articles should be dedicated to, please let me know your thoughts. Also remember that any input that you care to make will be of great interest to all of the readers here at Globalair.com. So don't be bashful. Go ahead and write your comments and suggestions here. Please don't forget that whatever you write here, can be seen publicly by everyone that visits this page, so please be funny, be inspired, but most importantly of all, please be nice.

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Jeremy Cox



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