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BUSINESS AVIATION AND THE BOARDROOM - Governance & Control

Winter storms and evolving airline strategies reflect the need for comprehensive travel policies, notes Jack Olcott. Among its many benefits, Business Aviation provides a tool for coping with Nature’s fury.

AvBuyer   |   31st January 2011
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Governance And Control
Winter storms and evolving airline strategies reflect the need for comprehensive travel policies, notes Jack Olcott. Among its many benefits, Business Aviation provides a tool for coping with Nature’s fury.

First Europe was hit by snow storms that paralyzed major airline hubs in the UK and France, then, the day after Christmas 2010, a blizzard that left up to 30 inches of snow in some locations from New York to Boston in the US stranded thousands of passengers at terminals for days. For business men and women forced to travel during that period of unusual weather, the loss of productivity as well as the frustration of prolonged idleness was profound.

Before corporations accept such losses as an “Act of God, “ well beyond the limits of human governance, Directors should take a closer look at the circumstances that snarled airline travel as 2010 ended and we entered the second decade of the 21st Century. An effective travel policy provides a corporation with tools to deal with nature’s curveballs.

Unusual weather tipped into near-chaos an airline system undergoing changes designed to produce greater profitability. After several years of significant losses, the US air carriers have instituted changes ranging from new fees (a minor annoyance) to revised business models involving reduced seating capacity and staff reductions (a major problem for the business traveler, particularly when there are disruptions in normal service). According to the U.S. Bureau of Transportation Statistics, the airlines cut available seats by about nine percent, and full-time equivalent employment by 14 percent since 2005. Similar changes in capacity and customer service have been enacted by non-US carriers.

In the US, well-meaning legislation enacted in April 2010 requires domestic airlines to pay a fine of What the Boardroom needs to know about Business Aviation “Flexibility and control are fundamental capabilities offered by Business Aviation.”

$27,500 for each passenger delayed on the tarmac for more than three hours. In response, scheduled airlines are incentivized to cancel flights rather than risk fines. For example, hundreds of airline flights were cancelled by carriers operating from Atlanta, Georgia during the December blizzard even though that hub was not shut down by the storm that plummeted the New York-Boston corridor many hundreds of miles further to the north. Such are the unintended consequences of well-meaning laws designed to protect the public.

When capacity is limited and flights are cancelled, finding an open seat on another flight is problematic. Locating a booking agent who is able to sort out the snarl is even more difficult. Hence the prolonged effect of even a few cancelled flights. Some passengers at London Heathrow, Charles de Gaulle and three New York City airports waited the better part of a week for new reservations.

Passengers on international flights, which are not subject to the $27,500 per passenger fine for ramp holds, are hit by an apparent airline strategy to dispatch flights even when delays finding a gate after landing are likely. At New York’s JFK International Airport following the post-Christmas blizzard, 29 international air carrier flights were held on the tarmac for three or more hours waiting for their gate to disembark passengers. At least one international air carrier held passengers onboard for half a day before a suitable gate was available.

FLEXIBILITY AND CONTROL
Flexibility and control are fundamental capabilities offered by Business Aviation. When faced with weather conditions such as were experienced at the end of last year, operators of business aircraft have options unavailable to the scheduled airlines.

For example, the heaviest snowfall in the New York area occurred east of a line that began about 10 miles west of the city. Morristown Municipal Airport, a facility located about 40 miles west of JFK and home to about 20 corporate flight departments, had half the snowfall that nearly paralyzed the three metropolitan New York airports.

Morristown, a General Aviation airport not available to the airlines, was open for flights within hours of the snow stopping. Further west, within 100 miles of the storm’s deepest accumulation, airports were essentially clear— and available for business jets, which legally have access to nearly 10 times the locations serving scheduled air carriers.

A corporate flight department or charter provider will advise passengers about challenging access issues caused by weather or ATC delays. Options can be discussed and reasonable alternatives can be developed, consistent with the safety oversight available with a professional flight operation.

When queried as to why Business Aviation is a powerful tool for achieving success, many managers mention control of their time and the ability to be flexible in selecting options. To maximize the productivity of people and time, Directors should include the Business Aviation option as part of their company’s travel policy.

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