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Doing More With Less

by David Wyndham 1. November 2008 00:00
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What if the powers-that-be tell you to cut the budget 15? Many of you are facing being told to cut the budget, and yet asked to maintain the same high level of service. Do more with less. Been there before? Are you there now?

How do you spend less and still keep flying?

Look at your current flying schedule. Can several trips be combined into one? Can the Monday trip to Des Moines be combined with the Tuesday trip to Cedar Rapids? If Cincinnati is on the way to Omaha, maybe you can drop off someone? You are still accomplishing the same mission, but with fewer hours and dollars.

Save on fuel: You have a choice in where you purchase fuel. While choosing an FBO based solely on fuel price (or any other single requirement) isn't necessarily the best, work with the FBO's you frequent most often to negotiate the best prices. Make use of the GlobalAir fuel surveys. Use Max-Trax (http://maxtrax.globalair.com/) to find where the best fuel prices are along your route of flight. Investigate fuel discount programs. It may be by using a fuel card or a professional association discount. These programs and discounts change, so review them at least once each year.

Inventory management: We had one client who had hundreds of thousands of dollars in spare parts for an aircraft they no longer owned! Even at twenty cents on the dollar in liquidation, that was a lot of extra cash lying around doing nothing. As a rule, inventory will cost 15% to 25% of its value in carrying costs - storage, insurance, loss, etc. How much inventory do you really need for your aircraft? What are your most frequently replaced parts? How good is the manufacturer's AOG dispatch? Careful management of your inventory can save thousands.

What about parts warranties? Regardless of aircraft age, an aircraft can have many new or remanufactured parts installed. Those parts typically carry some sort of warranty. Tracking their ages/hours/cycles can result in savings should they need replacement while in warranty.

Maintenance Tracking: Software can be a valuable aid in determining where your maintenance expenses are and also in managing your inventory. You can't manage what you can't see. This may be done using the manufacturer's software, third-party software, or a simple spreadsheet.

Aircraft Replacement: Replace your aircraft with a newer one! If we are talking of saving money so how can getting a new aircraft save money? If the newer aircraft requires a lot less time in maintenance than your current one, then you (a) save in maintenance costs and (b) get increased utilization due to increased availability. We did a study for a fleet operator and we showed that replacing their five old aircraft with three new ones not only gave them MORE availability and more capability, it cost less to do so. The market is very favorable to a buyer, so if you can justify the replacement, now is a good time to acquire an aircraft.

Employee Cross Training: The Other areas may involve cross-training your staff to do multiple jobs. A scheduler can also be trained as a flight attendant. Pilots can be trained to fly more than one make of aircraft, and when not flying can take on some administrative duties in the flight operation. That's not to say "do everything in-house." Outsourcing to specialists can prove to be very cost efficient in terms of time and material savings. Your people are your most valuable asset - manage them wisely and seek their inputs.

Communicate: One last item is to make sure to communicate to management what you are doing and how to interpret your costs. Paying out for a major phase inspection or an engine overhaul may make it look like your costs are too high. Educate the CFO as to the cyclical nature of aircraft costs. That $300,000 overhaul might have taken 3,600 flight hours to accrue. Don't assume they realize that. Let them know you are concerned about managing costs.

Are you facing a smaller budget? Click reply and let us know what you are doing to save money.

Thank you in advance.


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