Jay Mesinger is the CEO and Founder of Mesinger Jet Sales. With over 40 years’ experience in the... Read More
Most of our articles and topics within Business Aviation and the Boardroom have focused on discussions taking place inside the Boardroom. This is appropriate- especially to address the needs of a company seeking to understand the value proposition- create the necessary budget and develop a utilization plan for acquiring and using a business aircraft.
Typically the Board reaches beyond its setting to bring in outside expertise to help in this planning- largely because the internal resources and infrastructure were not already in place for consultation.
As the corporate flight department develops and matures- however- there is a terrific opportunity for joint planning between the Board and the company’s aviation personnel. I like to think of this collaboration as a bridge- enabling dialogue between business units within the company- and an opportunity to redefine the role of the flight department as an autonomous and responsible unit whose job it is to carry out the “mission critical” work of Business Aviation for the company.
APPROPRIATE RECOGNITION = REDEFINITION
In the past- and still in a few instances the flight department is not recognized as a business unit of the company- as are most other critical budget-driven departments. The fact is- aviation department managers really do have responsibility for critical corporate assets- the most important being the firm’s personnel.
The head of the aviation department also manages expensive equipment including the company aircraft as well as physical plants like hangars. Understanding the magnitude of the flight department’s mission and the impact of aviation assets on sources (such as depreciation) and uses of corporate funds makes this redefinition necessary.
The industry at large is walking this road toward integrating the aviation department into the company- giving it uncompromised status as a business unit within the corporate structure. The aviation department as a business unit has annual budget responsibility- which includes understanding the depreciation component of the assets as well as the residual value of equipment.
PILOTS AS BUSINESS MANAGERS
Today’s flight department managers are not just pilots flying the aircraft; they are business managers creating value in the midst of a very complex playing field. Directors should reach out to the aviation department- a rich resource of knowledge they can use to shape the company’s Business Aviation policies.
As we have discussed in prior articles- regular review of aviation department mission- equipment and costs- based on changing priorities and utilization models- is essential to the successful fulfillment of the Board’s aviation policies. Creating an environment for effective dialog between management of the company’s aviation department and Members of the Board is where real success is possible.
As the flight department grows and matures and as utilization increases- continued questions will arise. Does the aviation department’s existing equipment align with the company’s current and emerging mission- and does the departmental head count meet the changing priorities of the company and its personnel?
As we discussed in last month’s article (April Issue- p56)- one area of change that can greatly affect planning is allowing greater access to the aircraft. Rather than attempting to answer such questions solely within the Boardroom or seeking outside consultants- Directors should be communicating directly to the head of the aviation department and discussing any proposed changes.
Given Board direction of what to do- the aviation department manager should be tasked with determining how to accomplish the Board’s will. As head of a company business unit- the flight department manager should contact external experts- if needed- to shape the solution and recommend needed components for Board consideration.
It is appropriate for the Board to concentrate on overall governance and to task the flight department with the day-to-day responsibility of implementing corporate policy for Business Aviation- as well as serving Directors as their knowledgeable aviation experts.
Shaping the aviation department into a strong and vibrant business unit within the overall corporate structure is a measurement of Board success. Like launching a child into the world to pursue their dreams and passions- it is time to celebrate the accomplishment of the Board in creating a viable- responsible and trustworthy department. Congratulations!
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