- 21 May 2020
- Andre Fodor
- Flight Dept Mgt
To ensure customers are not let down it is advisable to have back-up options available, including the use of other operators to help you out, as Andre Fodor explores...Back to Articles
When does supplemental lift prove most valuable, and what option is best to meet your flight department's needs? Andre Fodor discusses...
One of the most interesting corporate aviation missions I was part of happened while I was a United Nations pilot stationed in Africa. A peace agreement was to be signed following months of negotiations. The multi-part agreement involved warring factions, neighboring nations and some unofficial militias.
Due to the complexity of the agreement and the historical distrust between the factions, a very strict and specific sequence of events entailed the signing of this pact at each seat of government. Adding to the challenge, because of an obscure international law the U.N. determined that everyone had to sign the document within a twelve-hour period.
This made our role of airlift critical to the success of the endeavor, and to the future peace of the region. In recognition of the importance of the task, we placed backup aircraft and crew at critical locations to assure continuity should an aircraft or crew fail.
That contingency plan paid-off after the primary aircraft suffered an engine malfunction due to foreign object ingestion. The back-up aircraft completed its mission and the deal was signed in the required time-period.
Years later, working as a demonstration pilot for a major aircraft OEM, I would often be asked about aircraft reliability by prospective buyers. It was important to educate the buyer that the expectation of having 100% dispatch availability will only ever be possible with purchase of the right aircraft for the mission, plus a form of supplemental lift in place.
I would explain that even without any unscheduled maintenance issues, aircraft undergo inspections and scheduled maintenance that eats into their availability.
That is especially so when aircraft age and inspections take longer to complete. A wise flight department will anticipate these interruptions and have a ready solution lined-up.
Building the Case for Supplemental Lift
While it can be awkward to discuss supplemental lift with the company principal, most chief pilots that I know also oppose having somebody else do their flying. They fear that it could lead to their aircraft being sold and jobs lost. In my experience, this fear is mostly unfounded if the flight department is committed to excellence.
The reality is that companies wholly-own aircraft because they want full ownership and control of their schedule. Whole ownership comes with the expectation of unequaled service, however. When focused on excellence, a flight department should have little to fear when supplemental lift is needed to fill in sometimes.
Moreover, successful people react well to tangible data. Preparing a planogram depicting how scheduled maintenance and unexpected AOG may impact aircraft availability will help clarify the case for supplemental lift.
And if the aircraft is being used as a critical business tool, your company’s strategy team should provide data helping quantify the need.
Of course, there can be other reasons for supplemental airlift, too (such as when corporate guidelines do not allow the company’s leadership team to fly together).
Having established and agreed the need for supplemental lift, the question turns to the type of supplemental lift that best fits the need. Charter, Fractional Ownership and Jet Cards are all appropriate options, and we’ll look at the pros and cons of each here…
This form of airlift provides a couple of components that can be attractive. For example, you actually purchase ‘real estate’ in the form of a percentage of an aircraft with fractional ownership. This has a resale value, a depreciation component and management costs.
The fractional ownership provider manages the experience, and a Master Interchange Agreement gives you the ability to fly a network of other aircraft within their fractional fleet.
By owning a fraction of the aircraft, you’re assured of a set number of hours’ utilization per year. And because you are an owner, typical call times are shorter - giving you more flexibility in the case of a last-minute AOG. However, you’ll also pay an hourly cost to fly and a monthly management fee.
Fractional owners will typically pay higher hourly costs (than charter users), but there are no positioning fees.
For those with a good idea of their annual hourly usage requirement, and the need of an asset to depreciate for tax purposes, fractional ownership could be a good supplemental route to take.
Jet cards are essentially a sub-product of fractional ownership companies. These work like debit cards where you pre-pay for a certain number of hours. Because of large fleets, fractional providers have an inventory of unsold shares that can be used for jet cards.
Unlike fractional ownership, however, you will have longer call-out times, less access to aircraft during peak periods, and higher utilization fees and a fuel surcharge. Similar to fractional ownership, though, there are no empty-leg positioning costs, thanks to the critical mass of the provider’s fleet size.
You should be aware that if you use a jet card, though, the hours you purchase have an expiration date – so you need to be sure you use what you pay for, otherwise you will lose those pre-paid hours.
To reliably use ad hoc charter as a supplemental lift solution, you will need to develop a relationship with a broker that has a thick list of contacts. Sourcing charter on a last minute basis can be challenging, and charter companies can often be limited to operating regionally, servicing the area where their fleet is based.
Having a broker with the ability to source from other operators is essential to finding a flight when you’re far from the home base with an AOG situation (for example).
With charter, you must do your own due diligence, ensuring the operator, aircraft and crew are legal. Moreover, you will need a form of secured credit for funding last-minute charter. And, finally, keep in mind that you pay for all repositioning legs until the aircraft returns to its base.
Supplemental lift is yet another tool in the arsenal of an effective aviation manager, and should be incorporated into the annual budget with its use identified in your flight department’s standard operating procedures.
It is not there to replace the flight department. It is merely, but vitally, a complementary tool helping you meet the demands of high-end private aviation transportation services.