Flight Department - Page 8 Aviation Articles

The Flying Club Advantage


Until last year, I’d never been part of a flying club. I had always received training at established flight schools throughout the years and rented aircraft at local FBOs. I’d always heard that flying clubs, while less expensive, could be troublesome. Rumors of old airplanes, casual maintenance practices, scheduling problems and bad management always seemed to accompany discussions about flying clubs.

But as it turns out, it’s possible that I was actually just a victim of shady marketing tactics and misguided beliefs that implied that flying clubs were somehow not as good as traditional aircraft rental businesses and flight schools. The aviation business is a tough world, and the flight student often goes to the flight school with the newest airplanes and the best website. After years of flying, I’ve learned that sometimes the old airplanes are the best, and as much as I hate to admit it (I’m a marketing snob), marketing doesn’t mean anything if you can’t follow through. While I love a good marketing plan, the product is what really counts, and the same - or better - product found in traditional businesses can, in fact, be found in a flying club.

What is a flying club?
A flying club differs from a traditional flight school because it’s not-for-profit, whereas a flight school operates as a profitable entity. Flying clubs are completely run by the membership, with a board of directors leading the way. AOPA says there are about 600 flying clubs active today, and on average, each club has about 50 members and operates four aircraft.

Operating a flying club
Operating a flying club, like any flight school, is a lot of work for not much reward, and it’s often hard for clubs to stay in business. It takes a special group of people to manage a flying club and another special group of members to invest their own personal time and money into its success. Flying clubs will charge membership dues to offset operating costs, but otherwise don’t take in any revenue. And club members in a flying club operate club airplanes as owners instead of renters, which means they often have to pay a deposit upfront, but pay less in rental charges.

Advantages of flying clubs
The most obvious advantage of flying with a flying club is the cost. Aircraft rental rates are often high enough to just cover the operating costs, meaning you don’t pay the steep markup that a for-profit business charges.

But there are a lot of other advantages, as well, including the availability of different types of airplanes, the ability to take an airplane overnight or on a weekend trip (many businesses don’t allow this), the availability and presence of flight instructors who are also members, and the camaraderie. One of the most beneficial parts of joining a flying club is the camaraderie and the educational value of having other pilots and instructors around to answer questions or offer advice.

Joining a flying club has been the best aviation decision I’ve ever made. In the short time I’ve been there, I’ve learned more than I ever would have at another flight school or FBO. I’m always being challenged, and my flying skills are always being improved. The rates are less expensive than the other FBOs in the area, there is always another pilot around to bounce an idea off of, and there’s always a fly-out or an event to attend. And it’s family-friendly, too. I can bring my kids to the club building for a Saturday cookout, and they have just as much fun as I do socializing with other club members.

For me, the advantages of the flying club are clear. Not every club is perfect, but if you have a flying club nearby, it might be worth checking out!

Flight-Department-Fiscal-Flight-Plan

"Those who fail to plan, plan to fail." Now is a good time to start planning the next year's budget for your flight department. If you are a public company, you have two, or perhaps three quarters of your fiscal year already reported. How are things going? If your 401(K) is loaded with your company stock, you know that answer. That answer can also help with your 2016 budget, too.

A budget is a very important tool for planning an organization's use of its most limited resource - cash. Managing the cash is critical for any business, or individual. Failure to plan for the incoming and outgoing cash has ruined many a business. And that can limit your aviation operation’s ability to carry out its mission.

A budget is just estimate of the future showing the peaks and valleys of cash flow. A budget can also serve as a benchmark for evaluating actual versus planned-for expenses. Every organization must budget whether it goes through a formal or an informal process. Like any tool, used correctly it can be an asset in managing your aviation cash rather than a one and done exercise.

As an aviation manager, the budget should be more than just filling a square for your upper management reporting. It is a very useful tool that can enable you to track the effectiveness of your aviation operation. It can also alert you to the future peaks in expenses, such as scheduled major maintenance or an aircraft upgrade.

I like to think of the budget as a fiscal flight plan for the aviation department.

First, you need a destination. As a corporation, that destination is coming from the leadership. What are the corporate goals for the next year? How is the flight department going to support the goals of the company? Do you have the right assets (aircraft and people) to support that goal? Have you asked the boss what to expect for next year's flying? Understanding how your flight department supports the corporate goals gives you that higher level view of what to expect next year. Asking the main users gives you more details as to how or if your flying will change.

You need to check the weather. What are the restrictions or conditions that your flight department will face next year? Do you have a senior pilot retiring? Do you need to hire a new maintenance technician? Does your hangar need repaving in front? Did the word come down that your budget is frozen for next year?

Next up and maybe most critical is to preflight the aircraft. This is literal and figurative in that what condition the aircraft is in now, and at the end of the "flight" (year) determines its airworthiness. This is often the easiest part. Once you know to how much you expect to fly, you can forecast what maintenance inspections, overhauls, and part replacements will come due. You should have that running list of service bulletins that you'd like to have done. How does that interior look? What do you need, and want, to keep the aircraft flying in good condition for next year?

The cost details for your budget depend on who its for. You really need to have a budget for two people. The budget that gets rolled into to company budget is needed for reporting and overall measurement of costs. I had one client who had three line items for their budget to send to corporate: salaries, facilities, and transportation. That worked for the CFO's management reports but is insufficient for managing the flight department. You need a lot more cost detail in order to adequately measure your flight department. You need to know what is driving your aircraft costs, what your high cost maintenance costs are, most frequently replaced parts are, and much more.

Fodder for another article - how much detail is needed? Enough to see small problems become they become too big to control. You can't manage what is not measured.

Just as you monitor the weather and aircraft performance during the flight, so must you monitor the budget. Too many see a budget as a static "one and done" exercise. This misses the point of a budget. The budget at its best is a living tool that guides you through the fiscal year. It can alert you to small changes that are manageable. The budget should also be adjustable as the assumptions that went into it change. If you add an important new trip that you fly twice a month, that will increase your flight hours and could pull a big maintenance item into the upcoming year, or impact your ability to have the aircraft down for three weeks for that scheduled inspection. Not to mention if our sub-$50 a barrel oil goes back up, what will that do to your fuel budget?

You should be doing routine "actual versus forecast" reviews of the budget as well. It may be monthly or bi-monthly or whatever fits with your activity level. You also should have a documented set of assumptions that went into the original budget.  This is so much easier to do during the budget preparation than six months later trying to figure out where that number came from.

Ideally, your budget is a living document that can guide your finances throughout the year. You cannot make all the right assumptions, but with documentation and regular reviews you can keep the budget a useful document.

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