February 2016 - Page 2 Aviation Articles

Does your aircraft make "cents"?

It used to be that the choice of what business aircraft to acquire was a decision made by the CEO and the Chief Pilot. The boss said "I want this aircraft" and the pilot either got it or tried to dissuade the boss for reasons of speed, cabin or range. Today, opportunities to use business aircraft are sufficient only if the numbers make sense, and make "cents."

Some years ago I did a study for a manufacturer who was expanding from the Americas into Asia, particularly China.  They already had a larger-cabin business jet, but the senior leaders were considering a much larger airplane with global range to better meet their expanded travel needs. The CEO and Senior VP were clear on what they needed—the  ability to go global.

The CFO was just as clear on what he needed—financial justification. There was no way would he stand for a what he called "A Royal Barge."  In other words,  the aircraft had to earn its keep, or he would recommend the board veto it. This is exactly why you hire a CFO. It is their job to make sure every dollar gets spent wisely.  Our goal then was to recommend an aircraft upgrade that could handle the global travel of the CFO and SVP, both as flying-office and as restful-space, so that these rainmakers could do business right after landing. But since, the the CFO and board were not going to write a blank check, we needed the financial justification for the global jet.

Going from the corporate headquarters to to Asia was two-stops with the aircraft available at the time. One-stop to Asia was technically feasible but only if the weather was perfect and the headwinds were light. Our analyses identified two sets of aircraft.  A 4,100 NM range aircraft  could get them to or from Asia with one-stop 95% of the time. A 6,000 NM range gave them the desirable non-stop capability. Aircraft in these categories all have comfortable cabins with the latest navigation and communication systems. The seats could fully recline allowing for the executive to rest, if necessary. The galley could prepare the meals needed to fuel people for a 10 to 14-hour trip.  The financial differences that had to be addressed were:

 

  • Any new aircraft would cost more to acquire than the sunk investment in their current, smaller business jet.
  • Operating costs would go up with a bigger jet. However, given the newer aircraft's more fuel efficient engines and advanced systems, the cost jump was minimal.
  • Acquisition had to make sense financially.

 

We were able to show the added days in the office and the business jet’s more productive travel environment en-route were valuable to the company. The reduced travel time and more restful experience en route was seen as significant by the CFO. The saved travel days, the productive work environment on the business jet, and the secure work environment were good financial reasons for the new aircraft. Still, the question remained— do they obtain the 4,100 NM jet or the 6,000 NM jet? 

Looking at the Asia trips, we compared the added costs to acquire and operate the larger jet with its 6,100nm range with the cost of the fuel stops and added travel time of the 4,100 NM jet. We looked at the difference in the ownership costs - acquisition and residual value after 10 years in this case.  Based on the trip frequency, we arrived at a cost savings of about $600,000 per year by accepting the one-hour fuel stop needed with the 4,100 NM jet on Asian trips. The CFO was not sold on the 6,100 NM aircraft as adding that much more value. The flight department, CEO and Senior VP were satisfied with the 4,100 NM jet, which is the aircraft they purchased.

Given the frequency of their Asia trips, the 6,000 NM jet was not financially justifiable.  Operationally, the flight department favored the shorter stage lengths with a break, even with the added crew member.  For this company, the numbers made send for the 4,100 NM jet. For another company with higher trip frequencies or greater passenger loads, the 6,000 NM jet would make better sense. In all cases, you have to look at the costs and the benefits to do what makes "cents" financially within the parameters of the mission requirements. 

 

Nine Great Aviation Events you Don't Want to Miss

There are hundreds of exciting annual aviation events for seasoned pilots and aviation enthusiasts alike to visit this year. These events will bring a lot of new networking opportunities, as well as chances to just have fun. With the pilot shortage quickly approaching, there is no better time than now to get your foot in the door with the company you’ve always dreamed of being with. Networking with them at an upcoming aviation event could be your chance to shine.

Even if you are not looking to get into a job in the industry, visiting air shows and conventions can be the highlight of your year. Many companies unveil new products and aircraft at these events, so I encourage everyone to attend as many as possible and enjoy the unique culture and friendliness in the world of aviation.

I have personally visited or know of someone who has gone to each of these events, so I can vouch for their outstanding quality. I included one for almost every month, as to give a good overview of when these major events are happening. I hope that you are able to attend at least one of these events this year, and that you have a great time!

Soaring Society of America Convention
February 18-20
Greenville, South Carolina
This three-day conference is the perfect getaway for those of us who prefer to take the to skies without an engine. The Soaring Society of America was formed in 1932 and currently has upwards of 12,000 members. According to their website, SAA members and soaring fans from all over the United States and Canada gather to learn the latest soaring technology developments, attend lectures, and meet with friends.


photo by Andrew Zaback—Attendees of the 2014 WAI Conference hear Eileen Collins speak at the Luncheon on Friday before being dismissed to enjoy seminars and interact with exhibitors.

Women in Aviation International Conference
March 10-12
Nashville, Tennessee
I was lucky enough to attend the 2014 Women in Aviation International conference at Walt Disney World in Florida. I was truly blown away by how much thought and preparation was put into every aspect of the weekend. This year should be no different, as the lineup of workshops and speakers listed online look incredibly interesting. They also have a variety of companies that come and conduct face-to-face interviews with job seekers that attend the conference. Participating companies include Alaska Airlines, American Airlines, United Airlines, Delta Airlines, NetJets, FedEx, and several more.

Sun ‘n Fun International Fly-in Expo
April 5th-10th
Lakeland, Florida
There is no better way to kick off your year of fly-ins and air shows by paying a visit to the beautiful Lakeland, Florida for Sun ‘n Fun Something that is unique about Sun ‘n Fun is how the majority of its profits sponsor the Aerospace Center for Excellence that helps shape the future of aviation by providing educational programs for youth interested in aviation. Who knew having so much fun could have such a great impact!

AOPA Fly-In
May 20-21
Beaufort, North Carolina
There are several AOPA Fly-Ins around America during the year, and this event in May is the perfect weekend trip for pilots with all levels of experience. All attendees are invited to the Barnstorming Party on Friday and encouraged to enjoy the fly-in sights and sounds on Saturday. AOPA offers several educational seminars during the weekend, including the Rusty Pilot seminar to help get you back on track if you have taken a few years off flying.

Ladies Love Taildraggers Fly-in
June 3-5
Sulphur Springs, Texas
Tragically, last year’s LLT Fly-in was canceled four days before the event due to a tornado hitting the airport. This year the ladies are as excited as ever to host taildragger enthusiasts from all over as they rebound from last year. Attendees are welcome to camp by their aircraft, or spend the night at the Sulphur Springs Best Western. During the weekend they have a poker run to benefit their scholarship fund, amongst other fun activities.

 

Photo showing around 10% of the attractions at Oshkosh.

EAA AirVenture Oshkosh
July 25-31
Oshkosh, Wisconsin
I have been lucky enough to attend AirVenture the last three years, actually flying in with my fiancé the last two. I am uncertain if I will be able to make it this year as our wedding is the very next weekend, but AirVenture has been the best week of my summer every year I’ve gone. The sheer size of the event alone is worth visiting just to see. There is never a dull moment at Oshkosh, and I encourage every pilot who has never gotten the chance to experience it to do their best to stop by this year!

Lee Bottom Fly-in
September 16-18
Madison, Indiana
This privately owned grass strip in Indiana holds a special place in my heart, as during one of my first ever flight lessons my instructor took me to their beautiful field on the Ohio river and we did our first exhilarating grass landing. I have flown up and attended their annual fly-in twice before, and the relaxed atmosphere with incredibly friendly hosts makes this a must-do for any pilot.

Finale of the Red Bull Air Race
October 15-16
Las Vegas, Nevada
Few things mix the world of extreme sports and aviation better than the Red Bull Air Races. Even watching the event on television gets my heart pumping, and I will hopefully be attending their previous stop in Indianapolis. This is a big year for the air race because they have their first ever female competitor, Melanie Astles.

NBAA’s Business Aviation Convention
November 1-2
Orlando, Florida
This event is truly the holy grail of business aviation. All different aspects of the business aviation world are represented at this conference, and most are there to get deals made. If you want to network with other business professionals then this is the one event that you cannot miss. It also gives you a pretty good idea of what the next biggest trends in aviation will be.

I hope that this gives you at least an idea of the variety of events that are offered this year! To view more events, or to list your own, please visit our GlobalAir.com Aviation Events Calendar!

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