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BizAv Efficiency

Business aircraft are valuable tools for advancing the goals of the enterprise. To measure effectiveness and provide oversight- however- there must be policies in place. David Wyndham offers some perspectives for the board to consider when crafting those policies.

David Wyndham   |   1st February 2013
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David Wyndham David Wyndham

As an Instructor Pilot in the U.S. Air Force- Dave's responsibilities included aircrew...
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BizAv Efficiency: Board policies for efficient use of business aircraft.

Business aircraft are valuable tools for advancing the goals of the enterprise. To measure effectiveness and provide oversight- however- there must be policies in place. David Wyndham offers some perspectives for the board to consider when crafting those policies.

When developing policies regarding measurement of the effectiveness of your business aircraft- first there needs to be a document stating how Business Aviation supports the company’s Vision- Mission and Guiding Principles. Ideally- this is part of an overall air transportation plan for the company that not only offers a rationale for an aircraft- but also offers the analysis for what type(s) of aircraft are being used. Ask yourself the following basic questions (adding the answers to your Mission document):

• What is your company's Mission?
• How does the use of the business aircraft support that Mission?

Second- your company should have a written corporate travel policy that includes Business Aviation. It should state who is authorized to use the aircraft and who is authorized to make the aircraft available to those without direct authorization privileges. This document should be copied to everyone who has a need to travel. For example- if the Senior VP of Engineering is authorized to use the business aircraft- he or she needs to know the parameters that apply to exercising that authority.

With one client of ours- any C-level executive can authorize the aircraft use by any employee- but they must provide written justification for anyone below Senior VP level. Thus- the corporate travel policy also stresses accountability.

OTHER CONSIDERATIONS
Corporate travel policy should address who has priority for use of the aircraft. While not a recommended standard- some travel policies state that the aircraft's primary user is the President/CEO. If he or she is not using the aircraft- then it can be scheduled by any other C-Level executive. In a few other instances- the corporate travel policy states 'first come first served' among the authorized users.

Another type of policy that I have seen requires a Senior VP (or higher) to be on board. Once the aircraft is scheduled- however- any employee with a legitimate business travel need can book a seat unless the aircraft trip is specifically blocked by the approving person. Each of these usage policies was developed with supporting the corporate Mission in mind.

Corporate travel policy should also address restrictions related to senior executives traveling in groups. Do you want the top four executives in your company all traveling in the same 'vehicle' at the same time? I used the word vehicle because I've found that travel policies rarely extend to vehicles other than an aircraft- even though business aircraft have a significantly lower accident record than other means of transportation- such as automobiles.

In 2012- we did a survey of corporate flight departments- asking about senior travel restrictions.

Among the results:
• 83% of “Fortune 500” respondents (with business aircraft) have some sort of senior executive travel restriction.

• Only one in five of the travel restrictions involved surface vehicles.

• An overwhelming percentage (96%) of those respondents with restrictions- limit the number of senior executives traveling together on the same vehicle. (Note: If such a travel restriction is to be waived- who can do it? A 'self-release' may not be the wisest alternative. I also recommend that the policy address all vehicles- not just aircraft.)

I have found that pilots are very 'mission focused' and getting the job done is very much in their DNA. But safety is priority Number One. I strongly recommend a section in the aircraft use policy stating that safety of personnel is primary- and that any decision by the pilot in command regarding safety must be accepted by passengers- without exception- and that such policy is backed 100% by the President/CEO.

To further strengthen accountability- policy regarding the use of the corporate aircraft must have the President/CEO’s signature.

REVIEW AND ADAPTABILITY
Lastly- there needs to be tracking and review of aircraft use on a regular basis. Markets and competitive position change- forcing business to adapt and change. One of our clients in the tech industry was awarded a very valuable- long-term contract outside the US. The Board decided that the business arrangement and the opportunity for more business in that region were sufficiently important to justify acquiring an aircraft dedicated to that long-range trip. The company updated its corporate travel policy to address the use of this new aircraft.

Having a documented rationale for aircraft acquisition and use- (supported by a clear corporate travel policy with regard to the business aircraft)- and tracking and reviewing that guidance on a regular basis- are all essential elements of Board governance for Business Aviation.

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

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