All Aviation Articles By David Wyndham

Can You Justify Your Business Aircraft?

Most of us in our workday make use of technologies like cell phones and computers. Yes, sometimes we use those devices for personal tasks, but it is rare that you have to justify their expenses. Not so with the business airplane. The aircraft is a relatively large “target” used by few in the company. Any non-business use can easily be amplified and the user, vilified. Unless you own both the company and the aircraft (how sweet), someone will always be looking at the business aircraft as a perk, not as a tool.

Can you justify your aircraft?

A rational, well thought out aircraft justification is a necessity. It should be clear to everyone in your company that the business aircraft is an essential business tool. Even if you do won the company! You should be able to say, "Yes, our aircraft is an essential business tool without which our company would be a competitive disadvantage in today's rapidly changing economic environment." And prove it, too.

There are many tangible benefits to having an aircraft. Which of these apply to your use of the aircraft?

Reduced Travel Time
Flexibility and Reliability of Operations
Productivity while traveling
Ability to support your customers in an effective manner
Ability to attract and retain key personnel

Do you have a document outlining why you need an aircraft and why you chose the aircraft that you have? The justification outlining the reasons for your aircraft's (and your job's) existence doesn't need to be a 300-page dissertation. In fact, a paragraph or two signed by the CEO is much more powerful!

Do you maintain documentation as to the effectiveness of your aircraft in the accomplishment of the company's business objectives? Reduced travel time, reduced wear and tear, increased efficiency? Document it. Every time the aircraft has made a positive impact, you need to document it. So when the current chairperson retires or moves on, you can brief the incoming chair with solid facts.

You also need to document and manage your operating costs. Are you operating as cost-effective as you can? Do you understand the nature and behavior of your costs? Do you have sufficient details in your costs to enable you to manage them?

If the mission of your company aircraft doesn't fit in with the overall focus of the company, then you may have a problem. If your aircraft supports the corporate mission, then life is good. Ask the questions and find out the answers.

Three Reasons For Having An A&P On Staff

If you are busy, here’s the condensed version: If you operate a turbine business aircraft and reliability is a key metric, unless you have 24/7 maintenance on the airport, you need an A&P on your staff.
If there is a service center at home station and they provide quality service and are knowledgeable about your aircraft model, it can be cost effective to have the service center perform the maintenance rather than employ a full-time maintenance person. Especially if that service center operates around the clock, or close to it. If you don't fall under that scenario, here are three reasons for having an A&P on your staff.
No one knows your aircraft better than your own A&P. That person gets to know the maintenance that was performed, the issues that the aircraft may have had in the past, and who/where to get the answers when maintenance questions arise. This is important in keeping the aircraft reliable and ready for flight when needed.
The in-house A&P understands your mission. Being your employee, she is fully dedicated to keeping your aircraft airworthy and safe. You will not get a better level of service than having a great employee as your A&P. They can earn back their salary in getting one critical mission off the ground on time.
When your aircraft is in for heavy maintenance, you're A&P is also your advocate in keeping the aircraft maintenance on time and within budget. While a good service center makes every effort to get the job done on time, the personal attention from your A&P will make that much more likely to happen.
The older and more complex your aircraft, the more critical it is to have the A&P on your staff. As with any aircraft, there may be minor issues that can delay your departure. The A&P being immediately available will enable a high level of dispatch reliability. In-house maintenance staff gives you the dedicated response on your schedule and is there to serve just you.
One of our clients has a 30+ year-old twin turboprop. Their limited budget includes a skilled A&P. Their dispatch reliability is in excess of 95% and their downtime due to unscheduled maintenance is far lower than you'd expect from an old aircraft. The maintenance manuals for their plane have notes and annotations representing the years of accumulated knowledge on how to maintain their aircraft. In these and many other cases, having the A&P on staff provides a level of skill and knowledge that enables the operator to maximize the utility of their aircraft.
I've heard from a number of operators that their A&P's salary was paid for at the first major inspection. Having the A&P on staff is cheap insurance for an on time departure. This further enables the executives to conduct their business in the most efficient manner.

Charter For Your Short Term, Long-Range Airlift Requirements

Business is slowly improving, and with it, flying activity. Several companies we work with are seeing increasing demand for flying internationally. These trips cover long distances. For them, their current aircraft is not suited to the job of long-range air travel. It is a combination of being too small and lacking sufficient range to make such a trip practical and time-efficient. While upgrading the aircraft is certainly an option, and one worth considering if this level of activity will grow considerably, I’d like to recommend charter as an alternative.

Charter is a good alternative if you need a handful of hours for a mission your current aircraft can't handle well. In the cases above, chartering a global jet may be less costly than replacing your current (smaller) jet. While a larger aircraft that does the long-range trips can certainly do the shorter trips, it is more cost effective to get an aircraft that handles 90% of your air travel needs and charter for the remaining 10%. Stepping up from a mid-size business jet to a global business jet can see your operating budget increase 60% to over 100%! Chartering the global jet isn’t cheap, but it can keep your overall budget increase more manageable if those trips are few and infrequent.


Charter rates for long-range jets can vary from $4,000 per hour to $8,000 per hour base rate. New York to London is a different requirement than Los Angeles to Beijing. Go big, but not too big!


Remember that the additional fees for international travel can be substantial: overflight and airways fees, landing and handling fees, customs fees, etc. Make sure that you get trip quotes that estimate those additional fees as much as possible so that your bill isn’t a shocker!


The next step is finding a provider with those aircraft. I'd say the best source for that is the Air Charter Guide. They have the most complete directory of on-demand charter providers. This is a worldwide database. It is available on line or in print. They list Part 135 licensed carriers, their location(s), contact information, aircraft types, and often, base rates. They even note special certifications such as an independent safety audit.


Another source of information for charter aircraft is the charter broker. Some are general in nature while others specialize in specific types of trips; say chartering airliners or aero medical trips. The goal of the broker is to bring together a willing buyer and a willing seller and in the process, make some money. The Air Charter Guide also lists those folks as well. What can a broker do that you can't do yourself? Brokers can add value to the relationship by shopping for competitive rates, providing contingency planning, and in getting the right equipment.


Still, how do you know who you are dealing with is qualified? Regardless of whether you deal with a local charter company, use the Air Charter Guide and call around, or go through a broker, you still need to educate yourself.


Ask your charter operator, or broker some tough questions. The good ones will have the answers. Here are a few items to consider:


1. Is the aircraft that you are being quoted, on the carrier's certificate? If not, what auditing process is in place to ensure the aircraft being flown meets the highest safety standards? Are they independently audited and inspected by someone like ARG/US or Wyvern?


2. How experienced are the crew? You and your insurance carrier have specified minimum experience levels for your own operation. What about the charter provider?


3. Do the pilots go through simulator training? How often? Once per year is the minimum, twice is preferred.


4. How is the safety record of your charter carrier? Have they had any accidents on their certificate or any other certificate that they have held? Have they received any safety awards?


5. In the event of an unexpected maintenance delay, will your charter carrier guarantee a similar replacement aircraft and honor the quoted price?


6. How frequently does your charter carrier have their aircraft painted and refurbished? What is the average age of an aircraft on their fleet? Their aircraft should be at least a nice inside and out as what you regularly operate.


7. How much insurance coverage is carried by the charter provider? $50 to $100 million is typical for turbine operators. Does your company require a higher amount?


8. If you are looking to operate into airports with special procedures, how does your charter company prepare the crew for that?


If you are dealing with a charter broker, they should have all this information. Verify it.


Like anything in business, relationships are important. Whether you are looking for a few hours a month or a long-term relationship, too much is at risk not to do the work up front.

Upgrade Now For Best Value

The DOW is flirting with 13,000 and will likely hit an all-time high soon. The FDIC just reported that many banks are showing all-time profits. Even housing and unemployment statistics are improving somewhat. Mitt Romney just won the Michigan and Arizona primaries. The 1% are on a roll!

 

All kidding aside, the general economic conditions are improving, especially for corporations and those high-net worth individuals. Aircraft sales figures are slowly improving and the resale market is improving for the newer models. 

 

If you have been waiting, now is the time to upgrade. This means either acquire and aircraft or upgrade what you have. Here’s why.

 

  1. Most of the new aircraft sales forecasts indicate that 2012 will turn the corner on sales. GAMA’s 2011 sales report indicates that total units delivered were down 3.5% from 2010, but total billings were up up 0.4%. This shows that the larger, higher priced models are starting to do better. The Original Equipment Manufacturers (OEMs) generally show limited backlogs on their popular models. For new aircraft, prices are still reasonable. But, if the sales forecasts hold, new model sales will continue to improve. When that happens, price flexibility will start to decrease and delayed price increases will start to be put into effect. If you are waiting for new, act now.
  2. Most indications are that turbine flight hours are increasing. Hours billed for engine guaranteed maintenance programs are up. As flying hours increase, the active aircraft will need additional maintenance. Non-critical items that have been delayed will be scheduled. Right now, many Maintenance Repair & Overhaul (MRO) shops are not booked to near capacity. This means they have the schedule open for maintenance. Schedule it now if you can.
  3. Just as aircraft sales are hurting, so are airframe, avionic and engine upgrade sales. If you are looking at the latest flat panel display, cabin entertainment, interior refurbish or engine upgrade, these facilities are ready and have the time now. Which means that pricing and scheduling should be favorable to the buyer.

The only negative to buying or upgrading now seems to be a lack of financing, real or perceived. The financial institutions do have the money to lend (or finance leases), but the are more strict as to their requirements. The deal must make fiscal sense to them. So as a buyer, you need to have that relationship with your financial institution, as well as a healthy balance sheet/downpayment.

 

If you buy or upgrade now, you should get fair prices. As the market improves, pricing should firm up (as it has for the larger, newer jets). I don’t see aircraft values appreciating like they did in 2007, but values should hold or improve slightly for the popular models. Buying now should result in good value, and when you look to sell down the road, you should be able to avoid nasty residual value surprises.


 

Aircraft Performance for “Dummies.”

Today's modern business jets are at the leading edge of aerodynamic design. These aircraft fly faster, further and consume less fuel than their first generation predecessors. What they are capable of is amazing. Within aviation, we tend to focus on and discuss all the maximum performance capabilities. However, when we are dealing with the non-aviation person, these limits of the aircraft’s capabilities can lead to much confusion, and sometime to acquiring the wrong aircraft for the job. Consider this to be in the vein of those wonderful “Dummies” books!

The confusion will often start with the sales brochures which list the maximum capabilities of the aircraft. Typically they focus on range, speed, and payload (or seats). It is important to realize that when the brochure states “Maximum Range: 2,350 nm; Executive Seating: 8 passengers; Maximum Speed: 470 knots,” it does not mean that this aircraft is capable of taking eight people 2,350 nautical miles at a speed of 466 knots! It simply states that the aircraft can fly 2,350 nautical miles, it can fly with eight people on board, and it is capable of reaching speeds of up to 470 knots - just not all at once.

Think of it like you would your car. You wouldn't expect your family sedan to get 28 MPG at 130 MPH! Most non-aviators can understand that analogy.

Following are some explanations of salient terms for those who don’t share in our world.

Aircraft can carry people, baggage, and fuel, but not the maximum of all three. Fill up the tanks with fuel for that maximum 2,350nm range trip, and you may only have enough useful payload left for three or four people. Conversely, fill up the seats and baggage capacity of the same aircraft, and you may have enough useful payload left to fly a 1,800nm trip.

Best economy speeds are slower than the maximum speeds. Our aircraft is capable of traveling at very high speeds. But the best fuel economy is found at a much lower speeds. With our car, to get 28 MPG we may need to drive at 40 MPH as opposed to 130 MPH. With the aircraft, we may need to slow to 430 knots as opposed to 470. 

Runway length required for takeoff will vary depending on many parameters. Again, the brochure may list a runway length of 5,000 feet. But that is with very specific parameters. Can you remember that time you drove to the mountains? Pulling onto the highway with a car full or people and bags it took a while to accelerate to the required speed. With the aircraft, it is similar. In a nutshell:

 

  • Heavier weights = more runway length
  • Hot days = more runway length
  • High altitude airport = more runway length

 

With a relatively short runway, at altitude, on a warm day, we may need to reduce the weight of the aircraft below its "maximum" weight in order to safely depart on the runway. Come back after dark when it is cooler and you may be able to add more weight.  So the extreme may be an aircraft that can take-off at sea-level from a 5,000 foot runway with four people and fly 2,350nm, but  may only be able to manage a trip of 850nm from an 8,000 foot long runway in the mountains on a warm day.

Regarding the performance of aircraft, they are a series of compromises. They can offer speed, range and payload but often require trade-offs in two of those areas to maximize the third. We pride ourselves in knowing the maximum capabilities of our aircraft. We also need to pride opurselves in our ability communicate to non-aviators the trade-offs inherent in our aircraft.

End of content

No more pages to load