By The Numbers
Aviation - like most highly technical fields - is dominated by numbers- observes David Wyndham. While company Directors will be too busy to directly manage the aviation function of the company- they should know whether the aviation function is adhering to the stated policies regarding the effective use of aircraft.
In relation to aircraft numbers- the pilot must know the aircraft’s operating speeds- its weights- and the fuel required to reach the destination. The mechanic is concerned with safety tolerances- pressures- torques and a myriad of other values. The aviation manager is responsible for the budget- as well as the management of the people: the pilots- maintenance and support staff. He should know the costs of maintenance- salaries and training as well as the metrics of personnel management.
To the executive and Board of Directors- however- all these numbers are not important in their ability to manage and control the overall corporation. As a Director- you do not have the time to directly manage the aviation function- nor human resources- legal- marketing- etc. You hopefully have a talented team assembled whose jobs are to manage those functions. Yet- with all the recent attention paid to the corporate aircraft by the Wall Street Journal and the White House- you do need to address whether the aviation function is adhering to the stated policies regarding the effective use of the aircraft.
Your corporation thrives on issues of profit and loss. You have a number of metrics that indicate not only the current profitability of your company- but trends and outlooks. While the corporate aviation function is rarely regarded as a profit center- metrics should be used to measure the function’s positive results as 'profits' and identify trends that may lead to negative results (losses).
The aviation function is a service department and as such- service is a top priority (right after safety). Service quality can be hard to quantify- except for periodic surveys among those serviced. But there are some other metrics than can be used to measure how effectively the aviation department is doing the job. They are as follows:
Budget Versus Actual Expenses: The aviation department must operate on a budget and any variances outside the budget need documentation. Under the rule of 'no surprises-' major expenses must be identified and budgeted for well in advance.
Cost Per Mile (running averages): Aviation maintenance comes infrequently and sometimes with large costs. A running average of those costs should be available covering 12- 24 and 48 month intervals. The goal is to identify increasing cost trends over time.
Trips Flown (compare to previous year's activities if available): This may include locations by city- region and country as appropriate. The goal is to ensure the aircraft is being used where it is most beneficial to the business- or in support of major projects. Rapidly increasing activity may be a sign that additional aircraft may be needed later.
Denied Trip Requests: Is supply meeting demand? If the number of trips flown is increasing and trips denied is also increasing- then you may need more aircraft. The reverse trend may indicate underutilization.
‘Dispatch reliability’ is defined as the percentage of time a departure is made within a set amount of minutes of schedule. You can't control the weather or the delays imposed by Air Traffic Control- but you can control the effectiveness of maintenance and the people who operate the aircraft. Delayed or missed trips due to unscheduled maintenance events should be extremely rare. If not- there is a problem. Also- a departure should never be delayed because the crew showed up late for work.
’Aircraft availability’ is defined as the amount of time an aircraft is available for flight (scheduled to fly or ready to be flown) compared to its normal operating year. If the aircraft is normally scheduled six days per week- then its operating year is 6 x 52 (312 days). If for 45 of those days the aircraft was not available to be flown due to maintenance requirements- then its availability is 86% (312 - 45/312). This number should be high. Decreasing availability typically is due to unscheduled maintenance.
Number of Months Since an External Safety Audit: Safety should be second nature and spelled out in the aviation department's policies and procedures that you or other C-Level Executives have personally endorsed. A safety audit is an external validation of that safety culture and should be performed every 24 months.
Number of rings before the phone is answered: Trite- but worthy of consideration - the aviation function is a service function. The level of service in all areas should be high. Phones should be answered by real people. Executives should not have to wade through a menu of options to talk to someone in the aviation department. To repeat this menu- please press 9. (In place of counting phone rings- periodic surveys of the users asking 'how are we doing' can suffice.)
Corporations need the essential support of human resources- accounting and information technology. While their budgets may increase or decrease- their function remains the same. The business aircraft can also fit into that same category - an essential business tool that is required for the efficient (and profitable) running of your company.
Do you have any questions or opinions on the above topic? Get it answered/published in World Aircraft Sales Magazine. Email feedback to Jack@avbuyer.com