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BUYING A BUSINESS AIRCRAFT
Three steps towards building the Boardroom or personal business case

STEP 1: ‘Value Proposition’ and the business aircraft
There are many different mission requirements among Business Aviation users. If you are considering taking advantage of the benefits of a business jet for your travel needs- you should be fully versed on your mission requirements first. The following three-step guide offers some key advice to help you identify your exact corporate or personal travel requirements- and subsequently enjoy the full value of your business aircraft.

The very fact that you are reading this series of articles shows that you appreciate the time-value solutions in the business world. You will already understand the importance of moving through life securely- safely and in style- while staying ahead of your competition- and in front of your customers.

Maybe those factors alone would be enough to persuade you of the value in utilizing or owning a business jet. If- however- you need more data to make the proposition have value- the following pages are designed to do just that: establish the value proposition; help anticipate and define your use of a business aircraft through Mission Profiling; and finally understand the options available to you in Business Aviation.

In the last several years the decision process for companies or individuals considering buying and operating business aircraft around the world has changed dramatically. This is due in part to the high cost of owning business aircraft- along with other issues specific to the region where the company is located- ranging from complex tax and use components- to regulatory barriers- or the sheer logistics associated with owning a business aircraft.

Decisions that once were driven by emotion (i.e. the look and feel of an aircraft) now take place in the Boardroom- or with the counsel of trusted financial partners- where emotions are not the driving force behind a buying decision.

Similar to those involving other important capital investments- today’s decision process is more sophisticated and business-oriented.

There are many different aircraft models available on the market that satisfy an equally diverse range of company or personal mission needs- so the selection process can become very confusing unless your decision-making follows a focused path.

To aid Board Members and financial consultants considering buying or utilizing a 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 blends together to give the advisors vision and balance in its decision-making. The following paragraphs address Value Proposition. Steps Two and Three (over the following pages) will deal with Mission Profile Analysis and Budget Preparation respectively. Together these three topics will give the reader insight into the process- and an idea of how to use these tools to build sound fiscal success.

As an aircraft broker with fifty percent of my business being on the acquisition side- I have been able to utilize my process skills in Boardroom meetings to help clients make the best decisions to meet their needs and goals. Often the first telephone 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.

Typically they have little background knowledge other than a feeling that “having our own business aircraft may make a difference”.

Answers to the following points become crucial in building the Boardroom business case for just how financially sustainable business aircraft utilization will be:

• How can I evaluate the differences between owning- chartering or leasing an aircraft?
• Who internally will be most impacted by these differences?
• How will a corporate aircraft increase shareholder value?
• How can I quantify the relative benefits?

DIFFERENT SHAPES & SIZES
In the information-gathering stage the questions are all the same. What becomes interesting is how the individuals or companies begin to elevate the answers differently internally. The outcome is ultimately derived by the sum of these elevated 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 individual’s or corporation’s considerations of time- efficiency- industrial security and frequency of travel to areas of the world where commercial airlines do not go- do not have regular scheduled flights- or where scheduled service is overly time-consuming.

Using Business Aviation- travel time can be time well spent for discussing important business issues with associates- without concern that company strategy will be mistakenly overheard by strangers- or that valuable time will be wasted waiting for connecting flights.

Looking at areas of the world where this type of specialized travel has been in place for years can help you understand the immense value and benefit of Business Aviation. In the United States- alternative travel solutions have been a part of business culture for over 60 years- and many of the infrastructure- regulatory as well as operational challenges faced there have been overcome during that time.

These and other mature aviation markets enjoy a greater certainty of airspace use and airport access. Many of the emerging global markets are still struggling with these issues- though.

Also- the Value Proposition must be defined - in part - by understanding the areas in the world that your operation- or travel patterns will take you. If you are traveling to parts of the world where airport and airspace access is broad and largely unrestricted- the value will be easier to attain.

Therefore- the Value Proposition must first be carefully examined to identify the greatest benefits to you as an entrepreneur- or to the company’s shareholders 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 and ask yourself:

• Using your current method of travel- are you missing critical business 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 you or 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?
• Are you wasting your own most precious asset—your time?

If the answer is yes to even one of these questions- then the Value Proposition is starting to take shape. Next- we will address the Mission Profile Analysis.

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