Sensitizing Staff to the Relative Costs of your Aviation Department
How can Flight Department Managers be effective in setting the rules for their department’s staff expenditures? Andre Fodor reflects…
My first opportunity to manage flight operations occurred in Africa while working for the United Nations. Within that role, I was responsible for aviation activities in Kuwait and Iraq just after the Gulf War. The role was not without its challenges – this was a multi-national team with major cultural differences and many operational complexities.
One of the significant challenges concerned finance management. The UN flight operation employed pilots and technicians from nations where cash was the only acceptable form of payment. Furthermore, some required payment in their home nation’s currency.
Owing to the diverse cultural backgrounds within that flight operation, there were many expectations that required considerable attention to financial issues. Although few flight departments will be as culturally diverse as the UN’s, effective management of any department requires a firm grasp of the business’ economics.
Balancing Expense Reports
Balancing expense reports can prove an ongoing challenge to the Flight Department Manager. The quality of life of the team is very important, considering the lengthy periods of time that can be spent away from home and family. Thus, choosing quality hotels with good amenities, while remaining compliant with the company’s prescribed travel policies, can be a skill requiring careful honing.
One becomes sensitized to different types of accountability during one’s flying career. In one extreme case my expense reports would be returned, graded with a stamped happy (or sad) face depending on the analyst’s satisfaction with my expensing activities and tipping practices.
Seeking a different approach to expense reporting, in my department each person is responsible for preparing their own expense report and also approving it.
The rationale is that if the employee is trusted to operate our aircraft and fly the company’s most senior executives, they can be equally trusted to manage their operational expenses. Yet, to my surprise, this too is less simple than expected.
Responsibile spending comes from people who are sensitive to the value of money. I’ve witnessed a flight crew member giving away a company-provided voucher for a hotel meal to a complete stranger, only to pay for the same meal using the company’s credit card. Another crew-member believed it to be reasonable to reclaim the rental charge of a chaise lounge chair at a beach in France on his expenses.
In both cases, the team member displayed difficulty in distinguishing the difference between a business expense and a personal expense. Flight Department Managers need to be very clear about the difference if they are to extend trust to department employees over expense claims. A vital part of our job is to provide clear guidelines, and then audit a sample of the reports.
Occasionally, corrections will be required, and the team will need to be redirected toward compliance with company travel rules.
Altering Staff Perspectives
Crews might see a wealthy principal spend large sums of money, while simultaneously being exposed to the high costs associated with the running of an aircraft. If the crew is not able to understand the difference between the personal wealth of a principal and their own obligation to efficiently manage the flight department’s expenses, it will become a challenge to stay balanced.
An aviation mentor once observed how his pilots – who proved remarkably finance-savvy on their own expense – became different people on assignment, using the company credit card to dine on expensive steak dinners every evening.
His attempts to sensitize the crew failed, so he placed the crew on a per-diem allowance, allowing the crew to keep money not spent.
Maintenance and ground operations teams can play an important role in expense control, too. Having the right Director of Maintenance will enable a flight department to optimize expenditures and achieve great value. By utilizing in-house skills, used equipment can be purchased and then refurbished like-new.
Being a steward of someone else’s money requires respect and sensitivity. We are expected to treat their funds as though they’re ours. As Flight Department Managers, we can set the rules for the department’s operations and the way money is spent.
Without the right people in your team, these guidelines can become an enforcement nightmare. In essence, choose your team wisely and provide high-quality coaching. It will pay off handsomely in the long-term.