Loading please wait....

If you are a registered, please log in. If not, please click here to register.

Business Aviation & The Boardroom - The Business of Business Aviation

When shareholders or the media ask about your company’s aviation department- what is your response? The answer- which comes in four parts- stems from your understanding of what is the business of your firm’s Business Aviation services- suggests Pete Agur.

Pete Agur   |   1st February 2012
Back to articles
Pete Agur Pete Agur

Peter Agur Jr. is Chairman and Founder of VanAllen - a business aviation consultancy firm with...
Read More

What Business Is Your Business Aviation In?
When shareholders or the media ask about your company’s aviation department- what is your response? The answer- which comes in four parts- stems from your understanding of what is the business of your firm’s Business Aviation services- suggests Pete Agur.

Part 1 of your answer has to do with Business Aviation’s job description for your company: specifically- how do you want Business Aviation services to help your enterprise succeed? There are two arenas in which Business Aviation can create its greatest impact for your company:

1. Strategic trips – A Strategic trip takes key people to meetings where new deals are done or major threats are addressed. The value of those meetings can be measured in multiples of the full cost of the travel mode. Positioning your key people effectively is at the core of Strategic trip performance. The aircraft is acting like a fire truck delivering firemen to the scene of the emergency.

2. Operational trips – An Operational trip has high cost benefit as compared to your commercial alternatives. On Operational trips- the incremental cost of operating the aircraft is less than the blend of airfare and time costs if traveling via the airlines. The focus is cost benefit. The aircraft is like a mail truck transporting the mail carrier as he or she delivers the mail.

The greatest impact Business Aviation can make is by supporting Strategic trips. A few years ago I was talking with the CEO of a large company who was buying his first airplane. He asked how he could be certain it achieved its highest and best use. I described to him the Strategic versus Operational use model. He replied- “Using those definitions- every trip our top management team takes is Strategic. Therefore- I want my top executives to use the airplane as much as possible.”

That perspective is shared by many business leaders. A number of companies have established part-time or full-time shuttle runs on the company airplane to connect frequently-traveled routes that are not well served commercially. The cost and time benefits of shuttle services routinely creates substantial savings over the best negotiated airline airfares. Such use of business aircraft falls within the arena of Operational trips.

It is tempting to assume that when your Strategic-focused aircraft is not on a trip- it could be saving the company money by doing Operational trips. But those savings would be more than offset if your company ‘fire truck’ was out delivering mail when a fire broke out.

Consider that a fire truck creates value by being available- ready to respond. That is a value created by a Strategic airplane- too. The occasional Operational trip might be better filled by ‘elastic’ Business Aviation resources like charter or fractional aircraft. If your marketplace and customer clientele are situated where airline service is unsuitable for the conduct of routine business- there may be a pressing need for an additional company aircraft dedicated primarily to Operational trips.

Part 2: If you ask most Business Aviation professionals (i.e.- manager- pilot- technician or scheduler) what business they are in- most will say- “Business Aviation.” From the Board’s perspective- that is not good enough. It is a commoditized answer that does not connect your Business Aviation service to the strategic intent or operations of its customer – your company and its leaders.

The much better answer is- “We are in the XYZ business- and our role at XYZ is to provide Business Aviation service that allows the enterprise to compete more successfully. We do that by…”

Any aviation professional that has his or her head and heart aligned in this manner will be much more effective for the company than someone who is merely focused on making landings equal takeoffs. Therefore- the second answer to “What business is your Business Aviation service in?” is; your business.

Part 3 of your answer to the question “What business is your Business Aviation service in?” is both subtle and powerful. Your Business Aviation services are an extension of your company. Your aircraft and crew are the first point of contact with many customers- shareholders and other key corporate constituents.

In other words- the aircraft and its crew are your ambassadors. And even if you want to maintain a low profile- they still represent your company wherever they go. With that in mind- their appearance and behaviors must be supportive of the ambassadorial role the Board defines for them.

Lastly (Part 4 answer)- as instructions for your ambassadors- the policies and practices the Board establishes for your Business Aviation service must preserve and protect your brand. The Board should review and ratify Business Aviation policies that address personal use; local- state- federal and international taxation issues; and community noise abatement rules- to name only a few sensitive areas. In the end- the Board has a clear and high responsibility for defining what business your Business Aviation service is in. Otherwise- you run a risk of being branded a ‘Fat Cat’ rather than a responsible business leader.

Do you have any questions or opinions on the above topic? Get them answered/published in World Aircraft Sales Magazine. Email feedback to: [email protected] 

Related Articles

linkedin Print

Other Articles