Is your flight operation as efficient as it could be? What are the savings that could be made to the cost of operation and where should you be targeting those savings? Andre Fodor considers…
There is no denying that Business Aviation is expensive. Putting aside the acquisition cost of an aircraft, there are plenty more large cost items on an operator’s spreadsheet. As managers and pilots, it’s our job to provide transparent accountability to our principals, curtailing the unnecessary costs as we seek budgetary advantages.
You can imagine my shock, then, as I audited a pre-invoice report for the owner of one Large Cabin jet that was coming to the end of a major inspection and found a ‘Walk Around Inspection’ bill for $75k!
The owner of this jet was generally a meticulous operator, but he had never hired a director of maintenance. Instead he’d chosen to have everything handled by an authorized service center. Since this was a major inspection and the aircraft had been literally taken apart, however, the owner requested my oversight as the project neared its end.
Though I would have preferred to follow the project from the beginning, we reviewed the work orders, sign-offs, work performed and the invoices. Major inspections can run close to the $1m mark, and I always ask for a pre-invoice report and highlight each work order title. What caught my attention was that single line ‘Walk Around Inspection’ item.
The aircraft had been in the hangar for nearly four months. The interior had been completely removed allowing access to inspection areas. The airframe had been jacked-up. And the landing gear had been sent away for overhaul. All the exterior inspection panels were removed as well as some control surfaces.
The jet had sat untouched and alone for days at a time while parts were out for overhaul. What walk-around inspection could possibly have cost $75k?
A discussion with the shop manager followed and I learned the company had a policy to perform a walk-around of all aircraft, every shift. Since there were three daily shifts, the aircraft received a walk-around three times daily.
Moreover, although the aircraft was down for four months we learned that the avionics team on a weekly basis had checked whether the databases were out of date. For this ‘task’ there was an additional inspection fee. Needless to say a lengthy discussion was had with the facility’s management over what constituted normal and acceptable service and what was mere ‘invoice padding’.
In fairness to the facility, all of its policies were outlined in the inception contract which had duly been signed by the aircraft’s owner. Having a professional assigned to this project from beginning to end would certainly have helped guaranty agreement in pricing, equal expectations and a clear understanding of the work scope approval process.
On another occasion, when I reviewed the renewal of annual subscriptions for one of our aircraft I noticed that the data provider was invoicing for a subscription that included Satcom and VHF services. Requesting a report of all datalink usage over the past twelve months, it was evident that all traffic had flowed via Satcom.
A simple adjustment to the subscription would have saved several thousand dollars on unused services. But after asking many questions internally it became clear that nobody within the Flight Department was clear on whether disabling VHF would inhibit certain CPDLC functions for domestic operations.
In the end we chose to maintain the subscription until we were sure that no operational capabilities would be negatively impacted. Nevertheless, we had identified where a cost saving could be made and were proactive in verifying it.
Where to Target the Savings
Cost-effective Business Aviation can never be about the short-cuts an owner/operator might take. Sizable investments in safety, comfort and functionality are necessary. In aviation, however, there’s a rule of thumb that what you don’t pay for now you’ll pay more for later.
Within those parameters, there are opportunities for savings and it’s important to focus on the ‘big-ticket’ items instead of the petty expenses.
For example, if the chief pilot of a large flight department tasked with lowering costs immediately focusses on crew hotel costs, meal receipts and airline tickets, he or she will risk dismantling a well-oiled machine for a relatively small saving.
(As we discussed in a previous article, there is a particularly high turn-over of crew and maintenance technicians in Business Aviation currently. Penny-pinching will do little to alleviate that within your flight department.
A successful manager will see the bigger picture: the areas in which there’s a lack of data gathering or lack of understanding over operational costs. Where are the opportunities for fuel cost enhancements, for example? Could the development of a standard operating procedure addressing the optimal cruise speed (fuel flows) on empty and occupied flights help?
These are but two very significant savings opportunities on a line item that can represent as much as 51% of a flight department’s operations budget. When you know where to look for them, there are some real savings to be made, helping save money in your business jet operation...