April 2013 - Page 3 Aviation Articles

Regional Corporate Pilot: via “The Pilot Slot”

   A leadership coach once spoke of growing up in Nebraska. When he spoke, he said “there are things you learn while growing up in the country that you just can't learn anywhere else.” I found that extremely fascinating; after all, a person’s roots typically tends to tell a lot about that person. Interesting fact; because of this article, I learned that many famous names have come out of Nebraska, including Fred Astaire, Marlon Brando, Johnny Carson and Larry the Cable Guy! Although I’ve not personally met with any of those people, each of them had what it takes to fight for what they wanted in life. Becoming a household name doesn’t typically happen overnight. I would like to share with you a story of one truly inspirational pilot and fine Nebraska native that is living and breathing aviation every single day.

   Jim McIrvin was born in Nebraska in 1964. He grew up on his family’s farm, went to school and played with his friends; no different than any other young boy his age. Jim was just a boy in grade school when he met a science teacher that changed his life. He never forgot this man, for he was a man who collected and built model airplanes. If that wasn’t inspiration enough, Jim’s best friend’s “Uncle Gene” was sure to push Jim over the aviation edge. Jim was in the second grade when “Uncle Gene” came into his class for career day and spoke high and wide of his job as a Coast Guard Pilot. People don’t tend to forget the days that change their lives, and for Mr. McIrvin, this had been one of those days. Years later, while the family packed things up and prepared to move off of the farm, Jim would stumble across his father’s dusty old log book from World War II. Although his father had been trained as a pilot in the war, he never had a chance to actually fly in the war. Nonetheless, Jim appreciated and respected his father for this, and so it was, aviation had officially been set in stone for Mr. Jim McIrvin. Unfortunately, as a boy, flight was nothing more than a dream for McIrvin. Jim spent most of his childhood with his head in the clouds, dreaming of a day when his feet might join him. All the while, Jim kept busy on the ground, building model airplanes of his own and farming his family’s land. While in high school, Jim applied and was accepted into an Air Force ROTC program that would eventually grant him with an opportunity to attend college in Saint Louis, Missouri at Parks College of Engineering, Aviation and Technology; via “the pilot slot.”

   It wasn’t until 1983 however, that Jim’s feet finally met his heart and soul in the sky. He was a sophomore in college, spending his spare time in one of the various local FBO’s of the Saint Louis, where he would go to watch the planes take off and come in. One afternoon, a man flew in from out of town in his personal Bonanza aircraft and asked Jim if he would care to accompany this man to a local airplane museum. Startled at first, certainly Jim couldn’t pass on an opportunity such as this. He kindly complied and off they went into the horizon via the stranger’s Bonanza aircraft in search of the aviation museum.

   During Jim’s senior year in college, he was awarded with his second pilot scholarship; this time, Jim had been awarded with an opportunity to pursue flight training in an accredited Air Force pilot training program. However, before he would become eligible to be sent into this pilot training, the Air Force required Jim to complete a rather lengthy screening process as well as successfully accomplish his first solo flight within seven hours of dual training with an instructor. Once Jim had successfully completed this task, as well as the required screening, he would be finished with his Air Force duties until the day he graduated as an officer. Until then however, there was no was no way that Jim would be sitting around with his feet on the ground! McIrvin had begun with his private training and wasn’t planning on stopping after just one solo flight. At that point, Jim took matters into his own hands and finished his private training at the FBO with his instructor. Once Jim had successfully completed his private pilot training he began competing with the NIFA program (National Intercollegiate Flying Association) via Park's flying team; the Flying Billikens. Apparently, Jim had been affiliated with this program throughout all four years of his college career; however, he had only participated as a ground member. It wasn’t until McIrvin’s senior year that he would compete nationally in the “SAFECON” flight competition, located at Ohio State University.

   Finally in 1986, Jim McIrvin graduated from Park’s College of Engineering, and carried on into the United States Air Force. During McIrvin’s military training he flew the Cessna T-37 Tweet as well as the Northrop T-38 Talon aircraft for precisely one year. Upon graduating from this training, McIrvin went directly to the FAA in order to test for and acquire his commercial pilot’s license. At that point, Jim was sincerely in need of flight time; no worries though, Jim was headed overseas on his very first Air Force assignment flying an F-111 in Desert Storm combat. In 1991, Jim became a certified flight instructor teaching student pilots to fly military aircraft such as the F-111, F-16 and the T-38. After teaching students on the side for just one year, McIrvin received his ATP rating in 1992. In 2000, Jim decided to transition into the Air Force Reserves in order to take a very promising FO airline job working for United Airlines, flying the Boeing 737. This was fantastic experience and not to mention great flight time for Mr. McIrvin. Unfortunately, once 9/11 happened, United Airlines laid off several thousand employees for a companywide downsize movement and needless to say, Jim was one of these several thousand involved. It was because of the downsize that Jim decided to reconnect with the military on a full-time, active duty status. In 2007 Jim added his single engine sea rating as well as a multi-engine sea rating and in 2010 McIrvin became type rated to fly in the Embraer Phenom 100 as well as the Phenom 300.

   In 2008, Jim retired from the United Stated Air Force and went to fly for the newly developed flight department of The Southern Bleacher Company. With this company, Jim flew in one of two different aircraft, depending on the job; either a Socata TBM 850 or Cirrus SR22. Today however, four years later, the Southern Bleacher Company’s fleet has grown and now includes two very beautiful aircraft; an Embraer Phenom 100 as well as a Piper Malibu Mirage. Jim’s job as chief pilot is to maintain these aircraft and of course, fly them to and from regional job sites. As a hobby, McIrvin continues flight instructing on the side. He is also very involved with the Young Eagles program and he serves as mentor pilot in the Phenom aircraft.

   From a very young age Jim knew that he wanted to fly. He didn’t look at the long term things like time or cost; and he didn’t care about the expense of how he might get there. Jim knew what he wanted from life and he never took “No” for an acceptable answer. “Just because the answer was No today, does not necessarily mean it will be the same answer tomorrow, or the next day” Jim stated. Jim McIrvin enjoys being a role model and a leader in the aviation world. He encourages all young people who dream of flight, (people like me) to take that leap and never look back. McIrvin says “Don’t be afraid to ask the questions; if it’s something you want, don’t ever stop trying.” As I conclude I would like to thank Mr. Jim McIrvin for contacting me and telling me his story.
   -- Jim shared with me a specific memory that touched his heart in a very special way. Years ago, Jim was very much involved with the Young Eagles program, even more so than he currently is today. McIrvin was giving free discovery flights to the young cadets involved in the program and out of the kindness of his heart; he chose to fly these cadets in his own private aircraft. One young man in particular, by the name Matt, sought after Mr. Jim McIrvin and asked for help in acquiring his private license. Young matt had been the only student that had chased after flight lessons and his willingness to fly sparkled in his eyes. Young Matt wasn’t taking “No” for an acceptable answer. Jim greatly appreciated Matt’s drive to learn, and made a bargain. Matt was to come to the airport on a regular basis and clean Jim’s personal aircraft in exchange for flight lessons. As the story goes, Matthew completed his private and carried all the way through flight training. In 2010 Matt graduated from flight school and is now a pilot in the U.S. Air force.

   There are pilots all over the world who want to share their story and their talents with young flight-driven students. Like Jim McIrvin, these pilots hope to help in leading students down a pathway to success. In the words of Jim McIrvin, “if it’s your dream, keep after it and never let it go.”

Jim and Matt

Phenom 100 with Jim

Note from the Author: Thank you so much for taking the time to stop by and read my articles! I cannot even begin to describe how much I’ve learned in just a few short months since I started with this series. You are all such inspiring aviators and pilots, so thanks for reaching out to me with your comments and emails. I hope you enjoyed this article, now get yourselves prepared for my next article and in the meantime, keep up the awesome thoughts, comments and on-blog conversations! -As always, please feel free to message me directly with your thoughts at - [email protected]. I’d love to hear from you!

Aircraft Chargebacks - What Are They?

In some companies, the term chargebacks sends shivers up the spine of the aviation manager. In others, it is a fact of life and a challenge that is met by aggressively marketing the value of the aircraft to the users. Chargebacks can drive utilization, but you can still prosper.

A chargeback is an attempt to allocate the cost of providing the air transportation service to the departments those that use it. In general, the business aircraft, due to its cost and limits to its availability, is restricted to providing air transportation to high value individuals or teams of individuals. How the use of the aircraft is restricted is fundamentally important key in deciding on a chargeback scheme.

If the aircraft is limited to a very small circle of senior executives, or even to one individual (e.g.,the CEO), then the cost of the aircraft can be allocated 100% to the (C-level) headquarters budget. The total cost of the corporate headquarters function is then allocated to the various business units by a common method.

If the aircraft use is made available to different departments, divisions or subsidiaries, then some method of charging those business units for its the use of the aircraft may be appropriate. The general chargeback principle is that those who use the aircraft pay an equitable share for that the use of the aircraft. Chargebacks can range from a 100% reimbursement of all costs to something less than full cost recovery.

There are three considerations pertaining to as to the charge backs method to be used:

1. Metering: How much is utilization of the aircraft to be restricted? High chargeback rates will reduce the aircraft usage while low (or non-existent) chargebacks encourage aircraft usage.

2. Consistency: Is there already an established protocol pattern at the corporate level for distributing other centralized costs? Can an existing policy may be applied to the aircraft?

3. Relevance: When using chargebacks, there must be an accurate accounting of the aircraft costs that supports the chargeback method.

According to the NBAA, about 44% of its corporate members use chargebacks.

When allocating the aircraft costs in proportion to its use, the corporation can elect to recover all or a portion of the costs. Again, the higher the cost, the less likely a business unit is to use the aircraft. With the aircraft, two of the most common chargeback allocations are the fully loaded cost allocation and the operating cost allocation.

Fully Loaded Cost Allocation

A fully loaded cost allocation is an attempt to allocate 100% of the aircraft costs among the users of the aircraft. If headquarters used the aircraft 67% of the time and sales, 33%, then sales should pay 33% of the aircraft budget.

Where this gets difficult is in budgeting and setting the rate. Rates can be by the hour, mile, or seat-mile. If the actual costs exceed the budget, how are the added costs to be recovered? Or, if costs are lower than budgeted, will funds be returned to the business units? Does the full allocation include depreciation of the aircraft or just its operating costs?

This method requires a clear understanding of the aircraft costs and an accurate budget.

Operating Cost Allocation

The operating cost allocation involves some formula to cover the Variable Operating Costs (fuel, maintenance, etc) and the Fixed Operating Costs (crew salaries, hangar, insurance, training, etc). The options range from a percentage of the variable costs to recovering 100% of those the operating costs.

This chargeback method, which can be in the form of an hourly cost or a seat-mile cost, also requires a clear understanding of the aircraft costs and an accurate budget.

This chargeback can be in the form of an hourly cost (if using the whole aircraft) or a seat-mile cost (if “buying” seats on a scheduled trip).

Other companies my use an external source for their chargeback. Most common Are the US URS SIFL rates and First-Class airfare.

SIFL rates

In the US, the Internal Revenue Service uses Standard Industry Fare Levels in imputing the value of private air travel for non-business/personal use. These IRS SIFL rates can also be used for the chargeback cost of the business aircraft. The IRS SIFL formula is based on distance and seats, not the actual cost of operating the aircraft.

First Class Airfare

This chargeback avoids the requirements for detailed aircraft accounting and assigns a predetermined First Class Airfare cost to the use of the aircraft.

There may be other formulas in use such as per mile allocations, an allocation of the depreciation of the aircraft, or a hybrid-mix of the above formulas.

“Flight Department Companies”

Business aircraft operate in the US under FAR Part 91 and are classified as noncommercial transportation, whereas FAR Part 135 allows for commercial transportation for which compensation is collected. However, the IRS may question the aircraft chargebacks and in some cases, may reallocate them during an audit. Care must be taken to avoid any action that either suggests or creates a separate company to provide air transportation services to the corporation (even between subsidiaries within the corporation) unless that separate company holds a Part 135 certificate. For corporations that own an aircraft for its own use, However, chargebacks are an acceptable way to allocate the use of the business aircraft among the company’s users.

The chargeback allocation needs to reflect how the company values the use of the business aircraft. If done with that value in mind, it can be useful to assign a cost to a limited asset of the business aircraft. Thus entities within the company are using the business aircraft when it is most effective to do so. Using chargebacks just to throttle use of the aircraft can be disastrous.

Does your company have a chargeback system? What is it and how bad or good has it been?

When Aircraft Touch On The Ramp

It's a beautiful day. You are sitting in a chair outside your favorite FBO at the local, uncontrolled airport watching the traffic. An aircraft is taxiing onto the ramp towards an aircraft that is poorly parked too close to the taxiway line. From your perspective, it looks like it will be close, but you can't tell for sure whether the taxiing aircraft has enough room to pass the parked aircraft. The next thing you hear is the unmistakable sound of metal scraping against metal. Not good.

Fortunately, this situation doesn't occur too often. However, it does happen. A recent enforcement case involved this very scenario. In Administrator v. Smith, an airman was taxiing his Cessna 210D aircraft equipped with Flint Aero tip tanks following the taxiway lines. At the time, the tail cone of a Citation XL extended approximately four feet over the line delineating the perimeter of the taxiway. The Cessna 210 collided with the Citation's tailcone resulting in a scratched area on the Cessna's wing tip/tip tank.

Shortly after the collision, the airman allegedly inspected the Cessna and observed that the wing tip/tip tank merely had a paint scratch. Believing that the Cessna was in an airworthy condition despite the collision, the airman then flew the aircraft to his home airport. At some point thereafter, the FAA became involved.

After investigating, the FAA issued an order seeking to suspend the airman's private pilot certificate for 60 days based upon alleged violations of 14 C.F.R. §§ 91.7(a) (operating an aircraft in an unairworthy condition), and 91.13(a) (careless and reckless). The airman appealed the order and a hearing was held before a National Transportation Safety Board administrative law judge ("ALJ").

At the hearing, the FAA argued that after the collision the Cessna was not airworthy because it did not conform with its type certificate until someone inspected it and compared it to the Cessna manual to confirm that it did, in fact, conform to the type certificate. Ironically, both of the FAA inspectors who testified at the hearing admitted they did not review the Cessna's type certificate or the supplemental type certificate ("STC") applicable to the Flint Aero tip tanks to determine whether the Cessna complied with its type certificate.

The airman argued that the STC was a modification to the Cessna's original type certificate and, as a result, it was necessary to actually review the aircraft’s type certificate, as modified by the tip tank STC in order to determine whether the aircraft was unairworthy under § 91.7(a). However, the ALJ disagreed and held the airman should have had the aircraft inspected after the collision before flying it.  As a result, he concluded that the airman was aware of the potentially unsafe condition when he operated the aircraft after the collision in a violation of § 91.7(a). The airman then appealed to the full Board arguing, among other things, that the FAA did not meet its burden of proving the § 91.7(a) violation.

The Board initially observed that the FAA may prove a § 91.7(a) violation by either showing that (1) an aircraft did not comply with its type certificate or (2) the aircraft was not in a condition for safe operation. With respect to the first prong of the test, the Board noted the absence of the Cessna's type certificate, type certificate data sheet, applicable airworthiness directives, or STCs in the record and the lack of testimony that the FAA inspectors reviewed those documents to determine whether the Cessna complied with its type certificate or STCs.

Regarding the second prong, the Board cited its precedent which allows the FAA to simply prove whether the airman "knew or should have known" the aircraft was not in a condition for safe operation, rather than proving the airman had "actual knowledge" that the aircraft was not in a condition for safe operation. It also noted that "a collision resulting in visible damage further requires an aircraft to undergo an inspection to ensure its continued airworthiness."

The Board then concluded that the damage to the Cessna constituted both actual and implied knowledge on the airman's part that an inspection was necessary. However, that wasn't the end of the story. The Board then determined that the absence of the type certificate or substantive testimony on either of the two requisite prongs of the airworthiness test meant the FAA had only shown the aircraft "might not have been" in a condition for safe operation.

The Board stated "[a]t this juncture, it is not clear to us that the Administrator fulfilled his burden in this regard by proving either the aircraft did not comply with its type certificate or was not in a condition for safe operation." As a result, the Board remanded the case to the ALJ asking him to provide specific factual findings to support his conclusions of law that the aircraft was not in a condition for safe operation.

What can we learn from this? Well, if you are ever involved in a situation that results in visible damage to your aircraft, even if it appears to be only scratched paint, the safe/conservative approach is to have an A&P inspect the aircraft and sign off on its airworthiness. Yes, this may cost a little money. However, it will be a lot less money than you would otherwise have to spend defending yourself in an enforcement action. And, if the FAA comes knocking alleging that you knew or should have known of a potentially unsafe condition with your aircraft and you operated it anyway, and you know the FAA will, you will have proof to the contrary.

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