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Opportunities & Governance

Governance includes seeking opportunities that facilitate healthy growth of the corporation. Business Aviation offers numerous opportunities for a company to serve shareholders through maximizing the productivity of people and time - a fact that should shape Board policy.

Jack Olcott   |   6th April 2011
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Jack Olcott Jack Olcott

Possibly the world’s most recognized advocate, if not expert on the value of Business Aviation,...
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Travel via business aircraft is recognized as highly effective for key employees who must be in the right place at the right time. Less appreciated is the multitude of other opportunities Business Aviation provides to nurture customer relations, expand market reach and capitalize on the creativity of the company’s entire workforce.

Furthermore, Business Aviation is the sign of a well-managed company, a fact that Board policy should communicate broadly. When developing policy for company use of Business Aviation, Directors are wise to look beyond traditional models. For example, key-man transportation makes profound sense. The definition of who is a key man (or woman), however, may need expansion.

One of the world’s largest producers of food processing equipment considered Maintenance Technicians key personnel, and these blue-collar employees had access to the company aircraft 24 hours per day. If a customer of the firm’s product had a breakdown in the processing of food, technicians were dispatched immediately so that disruptions to that production process were minimal.

Such immediate service was recognized as a core competency of the manufacturer, and it was a particularly effective component of its relationship with customers.

AN EXTENSION OF THE OFFICE EXPERIENCE
Transporting company employees to the customer is traditional. Less so is the practice of bringing customers to headquarters. Some companies, including one well-known Midwestern manufacturer of office equipment, have achieved considerable success and market prominence by bringing clients to their manufacturing sites or important facilities.

Many well-established firms, however, have been slow in utilizing such benefits of business aircraft. We were rather disappointed to learn that one large (and at the time well-known) Fortune 100 company conducted its first customer orientation, whereby important clients were flown to the company’s international headquarters in rural New Jersey, for the first time nearly 40 years after the flight department was established.

The company’s policy limited use of the company aircraft to the firm’s top dozen officers, which in our opinion was a significant underutilization of the firm’s investment in transportation resources. A particularly productive use of Business Aviation is the transport of company teams. Management teams can use travel time to discuss sensitive strategy. Marketing teams can review objectives and tactics en-route to their meeting, and debrief following their interface with customers while the sales interaction is still fresh.

The travel experience is simply an extension of the office experience. It is worthwhile to note that most companies appreciate the need to provide teams and middle management with access to the company aircraft. Only 15 to 20 percent of personnel on the typical company aircraft throughout the year are from Mahogany Row.

CHANGING USES OF BUSINESS AVIATION
More than two decades ago, when service on scheduled airlines was more plentiful and company aircraft less capable, nearly 30 percent of flight department activity was for transporting personnel to major hubs to connect with major air carriers. Today, however, considerably less than 10 percent of Business Aviation flights are for the purpose of connecting passengers with airliners.

In fact, most flights with business aircraft are to locations with minimal activity by scheduled flights, and many are to cities with no airline service. (In the USA, Business Aviation provides access to about 10 times the locations over any form of scheduled airline activity, and nearly 100 times the locations that actually offer convenient schedules. Thus the need to use airline hubs is minimal.)

Today’s business aircraft can match the performance of practically any airliner in operation. When the company business aircraft lacks the range or size to accomplish a particular mission, usually the flight department can locate an attractive alternative within the charter community. Thus the enlightened Board embraces a comprehensive Business Aviation policy that includes charter and on-demand service from commercial providers.

Business aircraft provide valuable and unique applications for companies. Boards are well advised to explore the numerous ways that business aircraft can serve shareholders by enabling companies to be more effective. We also urge Directors to correct policy that fails to grasp the full potential of Business Aviation.

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Corporate Angels Network:
When considering policy for Business Aviation, we urge Boards to embrace the good that comes from humanitarian programs such as the Corporate Angel Network (CAN), which links cancer patients in need of hassle-free and direct transportation to better-positioned locations like New York City, where world-class treatment facilities are available.

CAN maintains a roster of companies that have volunteered travel without charge whenever unused seats are available on their company aircraft.

Thousands of cancer victims have ridden in the privacy and security of a company aircraft, removed from the stressful environment of busy airline terminals (especially for patients with depressed immune systems resulting from chemotherapy). Boards that enact policy that includes humanitarian transport exhibit good governance, good PR for the company and good service to people in need.

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