Senior executives at major forms do not need to be told the value of a business aircraft. But at many companies, the business aircraft seems to remain the private domain of a select few.
The tangible benefits to having an aircraft can include, but are not limited to:
• Time Savings
• Flexibility and Reliability of Operations
• Ability to support customers in an effective manner
This sort of utility can be and should be made to more than just a select few. While your current CEO may understand this, does the new one? What about the various departments in your firm? Who can use the aircraft? Is it just the top two or three in the company?
No one will deny the ability of the business aircraft to save time, but the question that still gets asked is “Is it worth the cost?” In justifying the cost, we often look to the highly compensated senior executive. But this type of justification can also work for less senior workers, too.
As an example, assume a trip is needed from San Antonio to Reno. Via the airlines, you can make the trip in 5.5 hours flying, plus airport time, for about an 8-hour travel day. Business airfare for last minute travel may run $1,200 per person, or $4,800 for four persons. On the business jet, a charter may take less than 4 hours total time and cost may be about $12,000 for up to six persons. In your company light jet the variable cost for the trip may be $6,000. What is the value of that time saved?
In order to determine the value of the business jet over the airline, you need to understand both the total time needed for the travel and the lost opportunity cost, of that travel.
Business aircraft offer the ultimate in time flexibility. The airlines have set schedules in order to try and fulfill most travelers’ schedules. How can we compare the time and cost of both alternatives?
The National Business Aviation Association (NBAA) has a tool called Travel$ense. It is software that calculates the actual hours spent in travel, productivity and trip expenses. Travel$Sense uses actual airline data to allow your travel specialist to look at the time it takes for the aircraft travel as flown on your schedule with the business aircraft, and on the airlines’ schedule. In addition to calculation the total travel time, it also has user-defined inputs for productivity and salary.
Using such a tool, you may find out the San Antonio to Reno total travel time away from the office takes 40 hours round trip while the business jet takes 16 hours. But the next step is the critical one, the value of the time.
Time can never be saved. It can only be spent wisely.
This type of value consideration can also work for mid-level executives’ time. Fill up the plane with four or five people and not only does the cost of the plane come closer to the cost of five airline tickets, but the ability of those people to work and be productive can make the business aircraft use a “no brainer.” Those people can be a sales team, customer support, or even just four people within your company who all need to be in Reno this week.
Business-hours spent in the office, with a client, or working somewhere quietly without disruption are more productive than business hours spent waiting at the airport. Whether it is Travel$ense or a spreadsheet, such an analysis can show that the time spent not in the business aircraft can be put to productive use that can offset the added cost of the business aircraft option. This type of analysis may show that further use of the business aircraft to more than just a select few senior executives is indeed money well spent.