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What Directors Should Know About Corporate Aircraft
Identifying the pressures and obligations on Board Members- Jack Olcott launches our new section dedicated to addressing the business aviation issues that really matter to the company executive- releasing you to understand and enjoy the full benefits of this essential business tool.

Board Members have profound obligations. Whether public or private- for-profit or non-profit- corporations are required to have a Board of Directors that ensures the purpose of the enterprise is achieved. Boards are expected to exercise prudent authority- direction and control throughout the company- and be responsible for overseeing organizational structures and policies that maximize shareholder objectives.

Coupling such demands with the complexities of today’s business environment challenges the intellect and experience of the most qualified Director. For the thousands of corporations worldwide that operate business aircraft- Board responsibilities include governance of policies related to acquisition- use and divestiture of such company assets. While the technical details of aircraft operations; maintenance; crew hiring and training; safety management systems; compliance with European Aviation Safety Agency- Federal Aviation Administration- International Civil Aviation Organization and other government mandates as well as tracking valuations for business aircraft are the tasks of professionals within the company’s flight department- Directors must be aware of the issues and not abdicate the Board’s fiduciary responsibility to company staff simply because aviation is not its area of expertise.

Board Members need to know appropriate questions to ask. They also need to have sufficient knowledge (or access to expertise) to assess the answers they receive.

The purpose of this section - Business Aviation and the Boardroom: What Directors Should Know About Corporate Aircraft - within each monthly issue of World Aircraft Sales Magazine is to identify for Board Members the characteristics of business aviation- discuss objectively how those characteristics affect shareholder goals- and present relevant data and case studies that will be enlightening for Directors and interesting for all readers of this publication.

Since people and time are the two most important assets of any company- and business aviation is a proven means for providing safe- timely- efficient and effective transportation of company personnel- the need for understanding the pros and cons of business aviation is no less for corporations that do not own- charter or otherwise use on-demand air transportation.

The decision to own- charter or ignore business aircraft depends upon many factors- most of which require specialized knowledge of business aviation’s costs and benefits.

Flight departments are business units serving the Vision- Mission and Governing Principles of the corporation- and as such must function with the same degree of professionalism and oversight as other corporate units. It is our editorial objective to assist Directors in making informed decisions regarding business aviation- thereby exercising the Board’s duties in governance for all aspects of the corporation.

Each month this section will begin with my perspectives on the state of business aviation as a component of a region’s transportation system. The opinions expressed will be mine and obviously will reflect the attitudes and biases I have absorbed during a career spanning over 40 years in the business aviation community- first as a professional aviator providing on-demand air transportation for companies- then as a graduate Aeronautical Engineer engaged in general aviation flight research- followed by nearly 20 years as a journalist with a leading business aviation monthly. It was from that latter company- where I had attained the position of Editor and Publisher- that I was recruited to be President of the National Business Aviation Association- a title I held for over 11 years prior to forming my own consultancy in business aviation.

Currently I am a Board Member of a public company traded on the Toronto Venture Exchange. While not owning a business aircraft- that firm provides a highly technical product to the aviation community. Previously- I served on several US Boards- including both non-profit 501 (c) 3 and not-for profit 501 (c) 6 corporations as well as the Board of Trustees of a leading educational institution focusing on aviation.

My pledge to you- the reader of World Aircraft Sales Magazine- is to place your interests and needs for objectivity- accuracy and relevance before advocacy- however. First and foremost- the purpose of this section is to provide Board Members with useful information that will help them make informed decisions about company aircraft.

Business Aviation and the Boardroom will track measures of activity for the global fleet of turbine powered business aircraft- such as units owned and operated by companies as a function of time as well as hours flown annually. New and used aircraft sales will be reviewed to detect trends in usage of business aircraft for company transportation. The purpose of such trend data is to help Directors unfamiliar with business aviation understand the extent to which other companies use this form of transportation.

Topics such as full ownership of a business aircraft- fractional ownership- charter- and how to select a charter provider will be addressed. Company policies affecting business aircraft- such as who should be eligible to use the company aircraft- appropriate staffing levels for flight departments- flight and duty obligations of crews- safety audits and other management issues will be covered.

We will review legislation from various regulatory authorities to keep Board Members informed about existing and pending rules that are relevant to their fiduciary obligations. Environmental issues also will be included. And we will cover the aviation community’s response to government oversight.

Company officers will be interviewed to obtain firsthand perspectives regarding how and why corporations use company aircraft. Data that can be used for benchmarking flight departments will be offered- as will case studies of best practices. When illustrative- we will also include examples where enlightened Board governance would have yielded more favorable outcomes for the company and its shareholders.

Where appropriate- we will have editorial contributions from others involved in business aviation- thereby providing you with varying points of view regarding on-demand air transportation. A blog for timely feedback from readers eventually will augment this section.

Yes- our menu of editorial content is ambitious. Therefore we will start modestly- building the section with the goal of offering relatively quickly a comprehensive source for information that Directors will find enlightening and useful.

Possibly the world’s most recognized expert on the value of Business Aviation- Jack Olcott is a former Editor and Publisher of Business & Commercial Aviation magazine and Vice President within McGraw-Hill’s Aviation Week Group. He was President of the National Business Aviation Association from 1992 through 2003- and today Jack’s network and personal knowledge of Business Aviation uniquely qualifies him to lead General Aero Company- Inc. More information from
www.generalaerocompany.com

 


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