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Building The Boardroom Business Case:

There are many different mission requirements among business aviation users. Are you fully versed on yours? Jay Mesinger offers some key questions to help you identify your corporate travel needs and enjoy the full value of your business aircraft.

In the last several years the decision process for companies considering buying and operating business aircraft has changed dramatically. This is due in part to the high cost of owning business aircraft and other issues ranging from complex tax and use components to the sheer optics of a business aircraft. Decisions that once were made on the tarmac and driven by emotion (i.e. look and feel) now take place in the boardroom where emotions are not the driving force.

Similar to those involving other important capital investments- today’s decision process is more sophisticated and business-oriented. To aid Board Members considering corporate aircraft- the following perspectives will provide decision makers a clearer picture of what it is they need:

• First- the “Value Proposition” is established;
• Next the “Mission Profile Analysis” is performed;
• Finally from the above comes the specific “Budget Preparation”.

Each of the above tools blend together to give the Board vision and balance. This article addresses the Value Proposition. Subsequent articles will deal with Mission Profile and Budget Preparation. Together these topics will give the reader insight into the process and an idea of how to use these tools to build boardroom success.

As an aircraft broker with fifty percent of my business being on the acquisition side- we have been able to utilize our process skills in boardroom meetings to help clients make the best decisions to meet their needs and goals. Often the first call we receive is from someone in the Treasury or Finance side of the corporation. They have been given the task to reach out to the aircraft sales community and build the initial business case for Board consideration of either aircraft acquisition or fleet transition- driven by a change in travel patterns.

The caller typically has little background knowledge other than a feeling that “having our own business aircraft may make a difference”. How to evaluate the differences between owning- chartering- or leasing an aircraft- who internally will be most impacted by these differences- how a corporate aircraft will increase shareholder value- and how to quantify relative benefits are all questions that need to be addressed by the Board to make a financially sustainable decision.

DIFFERENT SHAPES & SIZES
In the information gathering stage the questions are all the same. What becomes interesting is how the individual companies begin to weight internally the answers differently. The outcome is ultimately derived by the sum of these weighted answers- though the thought process is the same.

Value comes in all shapes and sizes. It is defined differently by everyone. It is often weighted on the corporation’s considerations of time- efficiency- industrial security and frequency of travel to areas of the world where commercial airlines do not go or do not have regular scheduled flights. Getting out ahead of your competition- being in front of your customer and servicing the needs of the customer are all perfect markers for value as well.

Therefore- the Value Proposition must first be carefully examined to identify the greatest shareholder benefits based on a combination of time value of money and time value of personnel. The most logical way to begin the analysis is to look at the current method of travel for you or your company:

• Using this current method- are you missing critical opportunities?
• Is your access to important growth areas for your company or product limited?
• Are you simply spending too much time getting to the places in the world where you desire to go?
• Are your personnel finding excuses for not traveling due to the difficult airline connections?
• Are you wasting your company’s most valuable asset—the productivity of your key employees—by inefficient travel?

If the answer is yes to even one of these questions- then the Value Proposition is starting to take shape.

 

Read more about: Mission Profile | Value Proposition

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