Operational Improvement Tips for Your Flight Department

Is your Flight Department operating as efficiently as it could? How well defined are your budget and administrative processes? Aviation Director Andre Fodor shares some tips and tricks he’s learned over the years…

Andre Fodor  |  12th June 2024
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    Andre Fodor
    Andre Fodor

    With a focused approach on global excellence and creativity, Andre Fodor has managed flight operations...

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    What important operational improvements to make in your Flight Departm

    There is no doubting that everything in aviation is expensive. As if I needed it, I recently received a reminder of this when my personal airplane went in for its annual inspection.

    As the inspection progressed, the list of findings slowly grew to several pages in length, and now I find myself in the middle of a project which far exceeds my planned budget and timeline. It’s so often the case in aviation for the unexpected to happen. The inspection of my airplane accelerated into a full-blown project! 

    Corporate Flight Departments play pivotal roles in facilitating convenience, comfort, and bridging connections. This means we must focus on operational excellence, managing people, budgeting effectively, and managing finances strategically. In short, we must operate in ways where we anticipate and expect the unexpected.

    Operational efficiency requires a holistic approach from all personnel in their roles within the Flight Department, whether relating to fleet management, crew scheduling, maintenance, safety, or customer service.

    When we focus on enhancing each area of the operation holistically, we not only achieve cost savings but improve the quality of service we offer while ensuring we comply with all safety and regulatory requirements. We function with excellence, frugally. 

    To achieve optimal results requires a strategic approach integrating financial considerations into the decision processes. However, it is important to avoid penny-pinching for the sake of it since this adversely impacts the service and team morale of the operation.

    How Well Defined is Your Flight Department’s Budget?

    A well-defined budget serves as a roadmap for allocating your resources efficiently while keeping the focus on the big picture. I was once asked to audit a fairly large Flight Department. The Chief Pilot’s Principal had asked for a reduction in operating costs and, naturally, my first question was to ask what had been done so far.

    The Chief Pilot told me he had instructed his pilots to stay in cheaper hotels and reduce their restaurant bills. The answer surprised me!

    Next, I asked about the Flight Department’s fuel purchase initiatives and learned that they paid retail, using a credit card. (Thanks for subsidizing everyone else’s fuel discounts, sir!) I was puzzled.

    Why would a Chief Pilot be so quick to negatively impact the quality of life for his trusted crew? Hotels and meals were only a small percentage of that Flight Department’s annual budget. What prevented him from tackling fuel purchases, which equaled 51% of his budget?

    The simple answer boiled down to the fact that he had no budget overview, hence no vision of where meaningful cost cutting could be undertaken.

    How to Refine Your Flight Department Budget Properly

    When developing budgets for flight operations, it’s essential to consider fuel costs, maintenance costs, crew salaries, insurance premiums, and administrative overheads.

    You need to know the percentage each cost area contributes towards your total budget. Establish an average annual total hourly usage to arrive at an approximate and accurate hourly cost. By forecasting expenses, Flight Departments can avoid cost overruns and maintain financial stability while targeting the correct areas for cost cutting in order to meet their budgeting goals.

    Effective budgeting enables you, as a manager, to prioritize the investments you make in technology, training and infrastructure upgrades. For example, investing in advanced cockpit avionics systems can improve safety, reduce fuel consumption, and enhance operational flexibility.

    Weighing the possible cost savings against the upgrade cost will enable you to intelligently assess the benefit of making the upgrade. Or, allocating funds for recurrent training programs and professional growth and development, you can ensure your flight crews remain proficient and well trained in handling different situations. 

    Investing in your team is always a winning proposition, but you will be able to offset those training expenses by cutting costs more appropriately elsewhere in the Flight Department.

    Financial management also involves optimizing cash flow, managing debt obligations, and maximizing investment. Some of the big challenges we face are fluctuating fuel prices, new regulatory compliance costs and technological upgrades such as internet connectivity. Some of these are foisted upon us by end-of-life, obsolete technologies needing replacement.

    To mitigate the financial risks, flight departments should plan ahead, maintaining adequate liquidity reserves and implementing risk management strategies, such as planning and preparing for major inspections.

    Foresight is an essential part of successful Flight Department Management. Don’t hesitate to engage experts to help you make the best decisions.

    How to Become a Tax Expert in the Flight Department 

    Taxation is another critical aspect of financial management that affects corporate aviation flight departments, but we can’t all be tax experts, right…? 

    Tax laws and regulations vary across jurisdictions, and Flight Departments must stay abreast of changes that impact their operations. By leveraging tax planning strategies, flight operations can minimize their tax liabilities while maximizing after-tax profits. So, it’s worth knowing a thing or two in this area.

    Working with an industry tax specialist, structuring aircraft ownership through leasing arrangements, or establishing Special Purpose Entities (SPEs) can result in long-term tax savings for Flight Departments. And bonus depreciation allows for large first-year depreciations on aircraft acquisitions. 

    Equally, compliance with tax regulations is essential if you are to avoid penalties and legal ramifications of noncompliance. So, it’s imperative for Flight Department Managers to maintain accurate records of business activities, expenses and aircraft utilization to support tax filings and audits.

    Again, engaging qualified tax professionals or aviation consultants can help you navigate complex tax laws and identify opportunities for tax optimization. Managers are liable for fraudulent record keeping, so make sure your records are always accurate.

    Are the Administrative Processes of Your Flight Operation Streamlined?

    Implementation of technology-enabled solutions such as flight planning software, maintenance tracking systems, and electronic logbooks can streamline administrative processes and improve data accuracy.

    Similarly, encouraging a culture of continuous improvement through employee training, feedback mechanisms, and performance metrics enhance operational effectiveness, while giving your team a measuring stick.

    And collaboration with industry partners, regulatory agencies, and professional associations fosters knowledge-sharing and promotes industry standards (after all, no Flight Department is an island). By staying informed and actively engaging with stakeholders, Flight Departments can adapt to changing market dynamics and position themselves for long-term success.

    Thus, making operational improvements in corporate Flight Departments requires a multifaceted approach. By focusing on efficiency, cost-effectiveness and compliance, they can optimize resources, enhance service quality, and achieve sustainable growth. 

    Through strategic planning, innovation, and collaboration, corporate Flight Departments can navigate challenges and capitalize on opportunities in today's competitive landscape. But remember, your operation is only as good as its people. Take good care of them!

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