Who’s Entitled to Use Business Aviation?
The correct answer to the subheading above is: ‘anyone in the company whose “Presence/Time” dynamic produces benefits for shareholders’- asserts Jack Olcott.
Travel might well be described as the crabgrass of business. Like the numbing chore of keeping a lawn free from that pesky weed- business travel is a boring task that is essential to maintaining a successful company. Rarely fun- but always necessary.
Gone are the days when a flight on an airliner was novel or pleasant. Spending another night in even the best hotel is hardly compensation for missing an evening at home with the family. Certainly the convenience of setting one’s own schedule- eliminating connecting flights and avoiding the hassle associated with a busy Airline terminal tilts the tolerance scale in favor of business aircraft. Given a choice between the Airlines and Business Aviation- many travelers would choose the latter. But the allure of business jets quickly wears thin. Traveling hundreds of hours in the typical business jet—a mid-sized machine with barely sufficient room to stand—is not in itself a thing of luxury. The company aircraft is simply a salve that sooths the harsh rub of routine travel.
When considering the relative desirability of fulfilling the necessity of travel via Airlines compared with Business Aviation- however- the choice is clear. Business Aviation wins hands down for all who have spent time “on the road” on behalf of the firm. And that reality begs the question— who should have access to Business Aviation?
CONVENIENCE IS NOT THE ISSUE
For no other reason than convenience (and a myriad of other issues) business men and women with a modicum of travel experience would select Business Aviation as the desired mode of transport if cost were not an issue. But cost is an issue. Business aircraft- whether owned by a company or chartered- are expensive to acquire and operate. Thus the necessity for a metric by which a decision to use or not to use a business aircraft can be made objectively.
Frankly- I think it is poor governance—and a questionable use of the corporations funds—to limit aircraft use to just the President/CEO and his or her top people. Everyone likes convenience- but the purpose of a corporation is maximizing shareholder equity in an ethical and socially-acceptable fashion—not simply providing the top people with the convenience of Business Aviation.
BUSINESS SUCCESS IS THE ISSUE
Business aircraft are very effective tools for placing the right person in the right place precisely when he or she is needed—the “Presence” element. Furthermore- business aircraft provide a secure and productive environment in which to work while traveling—the “Time” element. Hence the need to evaluate the “Presence/Time” dynamic when determining who should have access to Business Aviation.
In certain situations- the “Presence” element is governing; in others- the “Time” spent traveling dominates. In most situations- however- both Presence and Time combine to clearly identify who should have access to Business Aviation. Security—both personal security and industrial security—may enter the equation. The bottom-line question- however- remains the same. What is the value of having the passenger travel in a timely and productive fashion to a location important to the company’s success?
While such is not always the case- an employee’s title should have no bearing on access to the corporate jet. A very successful manufacturer of automated production equipment used its corporate jet to transport technicians to customers who experienced interruptions on their continuously operating assembly lines. By assuring clients that the supplier would have a qualified problem solver at their doorstep within hours of a breakdown- business was enhanced. The company aircraft provided value by its ability to position a skilled technician at the trouble site quickly- thus minimizing losses due to a breakdown in the customer’s production line.
With significant opportunities in remote areas of the globe- many successful firms use their company aircraft as a traveling office as they pursue unique opportunities. It is not atypical for companies with dealings in Asia to spend 40 hours per week traveling—time that must be used productively while in transit to remote sites.
A contrary example is a former Fortune 100 firm that limited the use of its corporate aircraft to about a dozen “Mahogany Row” executives. That company no longer exists- taken over by a rival with apparently a different attitude toward its use of business aircraft.
POLICY BEGETS PROFITS
Boards are obliged to resolve the question of access to Business Aviation by focusing on returns to shareholders. Positioning rainmakers- problem solvers and customer specialists—regardless of title—promptly where they are needed most- and enabling them to use their travel time productively- is the appropriate policy for maximizing profits.
Do you have any questions or opinions on the above topic? Get them answered/published in World Aircraft Sales Magazine. Email feedback to: Jack@avbuyer.com