Peter Agur Jr. is Chairman and Founder of VanAllen - a business aviation consultancy firm with... Read More
The Revolution of Business Aviation
I’ve been introducing individuals and organizations to Business Aviation for over 40 years. It is a lot of fun for me because every time is a first time. I get to watch as each new owner discovers that the value of Business Aviation is far greater- and much broader- than what they had foreseen.
The launching point for most new owners is when they realize the Scheduled Airlines are too limiting. Many test the waters with charter flights or fractional ownership programs. The ones who need more of what Business Aviation offers consider whole ownership. That is often when we get the call to conduct a Business Aviation needs analysis.
Most frequently we are asked to do the study for one of two reasons:
1. There is no shortage of opinions from friends- Members of the Board- senior members of the organization and others. There is one common theme: Lots of recommendations and no consensus.
2. An expert third-party perspective can smooth the way to gaining that consensus as well as starting the process in a more orderly fashion.
During the needs analysis we help the client define how they will gain value using Business Aviation. The benefits fall into two buckets:
1. Growing the business;
2. Saving money and time.
The first bucket is by far the largest – and the focus of this article. The second bucket is much smaller, yet very rewarding, and will be the topic next month.
When I first meet with top executives who are exploring the use of Business Aviation, often they ask if we have ever not recommended buying an aircraft. The answer is “yes, but rarely”. The reason is simple. Most business leaders are very cautious about advocating the use of business aircraft for a wide variety of reasons, public and private. By the time they get to the point of examining the business case, however, they are well beyond the tipping point.
The most basic benefit of Business Aviation is the ability to do what the Airlines cannot do. For instance, a company may need to get a broad cross section of employees to diverse locations. Harley- Davidson (H-D) has done this for years. Their headquarters and many of their plants are not at hub cities.
Rather than have each plant replicate the entire staff, H-D has identified certain skills (engineering, production, quality control, accounting, etc.) that can be shared among them effectively, thereby yielding wide-scale efficiency. Each year H-D moves thousands of employees throughout its company locations to help deliver great bikes and accessories to avid bikers.
We are currently in the midst of a single-aircraft start-up. The US division of a closely held multinational manufacturing company is being “gifted” with its first aircraft by its parent company. The needs analysis is a given. The division’s North American headquarters is in a third tier Airline city, and the closest hub is a three-hour drive away. Its planned use of the aircraft is very traditional, and it expects to fly its senior executives on the trips the Airlines cannot serve well. A quick examination of the division’s historic commercial travel shows it will save over 40 days per year of executive time using the business aircraft.
But, that is only the start. During a meeting with the executive responsible for aviation services, I explained that she will find much broader value as her company learns how and when to use the aircraft.
There is no question that leveraging the time/place mobility of key people will be the bread and butter of their aircraft use. This is as fundamental as getting a division president to more locations more often. But, as with H-D, the newly acquired business aircraft will allow timely visits by technical specialists to various facilities more often, enabling them to improve the company’s efficiency, productivity and quality.
Being able to compete more effectively for, and keep, top talent is another tremendously valuable benefit associated with their aircraft. The company is based in a desirable geographic region, it is a very familial organization, and is known for being the leader in its industry. The company’s biggest drawbacks in attracting top talent are the demands and abuses associated with commercial travel. The airplane turns that negative into a positive.
I asked the executive if the company ever has immediate-response requirements. “Yes, of course” was her reply. As a manufacturer of high-cost equipment, the company’s customers expect that equipment will be on line, all the time. When a disruption occurs, the quicker her company can respond the easier it is to convert an operational failure into a service success. Business Aviation can raise the company’s customer care to a level its competitors will envy.
Then I asked her if the company was planning to use the aircraft to facilitate customer visits to their plants. Her eyes lit up with the realization that factory visits will enhance the buyer’s appreciation for the firm’s products. Even more importantly, they will promote relationships that allow the customer to know, through eye-to-eye contact, that their service requests will be in great hands now and well after the deal is done.
She now realizes that the value of Business Aviation is limited only by how she sees those services supporting her core business. Some owners are only skimming the surface. Is your vision sufficient to get the best return from your fully integrated Business Aviation services?