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Summer Thoughts

by David Wyndham 1. July 2009 00:00
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In late summer 1988, a singer Bobby McFerrin had a hit single called "Don't Worry, Be Happy." In that song he recounts various woes declaring

"When you worry you make it double,
So don't worry, be happy."

I think that is good advice for the summer of 2009. Some economic news is encouraging, but in the next day's news we have a new, bad economic report. Within aviation, we are wallowing in the depths of this recession. Reports are mixed, but from where I see things, if we haven't hit bottom, we are real close. New aircraft sales are slim, but most manufacturers are keeping going off of (rapidly diminishing) backlog sales. Used aircraft sales are still hurting, with moribund being used to describe older, used aircraft selling conditions. Operators are still under a lot of pressure to cut costs. Flight hours are down in every major sector.

Don't worry, be happy.

Fuel costs, although they are on the rise, don't appear to be headed to new highs just yet. Be happy about that. Keep flying using economy settings unless speed is critical. Keep using those fuel discount programs and check fuel prices and other fees before your trip.

Manage and control your costs. Have a system in place to collect your costs. Separate them into appropriate categories that you can analyze and understand. If you don't have sufficient detail in your aviation costs, you can't expect to be able to manage them. In about five years' worth of typical turbine aircraft utilization, you will spend as much money operating an aircraft as it costs to acquire it. Other than overhauls and refurbishments, most of the operating costs go out the door in small enough increments that we don't realize their total magnitude.

Maintenance is one of your biggest cost areas and one where you do have the most control. Evaluate how you do your repairs and overhauls. Using loaner parts while yours are repaired may be less costly than exchanging for new. Evaluate ways to maintain quality without adding cost.

Have a strategic plan. One question that can come up is "Are we operating the best aircraft for the job?" A strategic plan addresses this question with the reasoning and justification as to why you fly the aircraft you do. It also ties into the company's mission statement. Having and updating your strategic plan pays off in being able to better anticipate and adjust to changes without "shooting from the hip."

Communicate to management what you are doing and how to interpret your costs correctly. 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 nature of aircraft costs. That $200,000 component overhaul might have taken six year's worth of flight hours to accrue. Don't assume they realize that. Let them know you are concerned about managing costs and keep them informed as to what you are doing to minimize costs while maintaining the highest levels of safety and service.

Communicate to management about the importance of the aircraft in helping them effectively run the company during these stressful times. Time is a non-renewable resource. A business aircraft is an essential business tool by enabling rapid travel, face-to-face communication in many places over a few days, and allowing productive work to be done while en route.

You need to address all the concerns that management may have. Anticipating them in advance is far better than the panic that comes with the 5 PM phone call from the boss. These are not easy times, but we can all learn to be leaner and more effective so that when things improve, we are still around to enjoy them, and to be happy.

What positive things have you learned from these current economic times? Click reply and let us know!

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David Wyndham



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