Having established the ‘Value Proposition’ in relation to building the Boardroom business case for utilizing a business aircraft- we arrive at the next developmental step in the process: the ‘Mission Profile Analysis’.
Jay Mesinger is the CEO and Founder of Mesinger Jet Sales. With over 40 years’ experience in the... Read More
BUYING A BUSINESS AIRCRAFT Three steps towards building the Boardroom or personal business case
STEP 2: The development of the ‘Mission Profile Analysis’. Having established the ‘Value Proposition’ in relation to building the Boardroom business case for utilizing a business aircraft- we arrive at the next developmental step in the process: the ‘Mission Profile Analysis’.
The first and formative step towards owning and operating a company aircraft - assessing the ‘Value Proposition’ - allows the Boardroom participants and trusted advisors to vet the value of owning and operating a business aircraft- thereby giving Directors and counsel confidence to proceed with further analysis on the subject.
We weighted the value along traditional thought processes: ease of travel- security- time-savings and lifestyle. Once this value is established at least in your mind- if not the Boardroom as a whole- the decision to use Business Aviation must be carried to the next step.
How much will it cost to reap the perceived value? This article will answer that question.
The next step- here referred to as the ‘Mission Profile Analysis’- will focus the team on the process of choosing the best potential aircraft to meet the company’s needs.
The development of the Mission Profile is like creating a recipe for a meal. Without considering the number of people dining- or taking into account their specific dietary needs there may be too much of the wrong ingredient- or too little of what would make the meal perfect.
The same is true when determining the right business aircraft for your corporate or business application. What begins seeming like an over-simplistic exercise ends yielding the analytics necessary for the decision-making process- which is now supported by facts- and is defendable to shareholders and financial strategists- who- looking only at the financial outlay- may question the wisdom of utilizing a business jet.
The development of the Mission Profile begins by assessing and building the annual hours-flown equation- and determining which category of business aircraft will fit the mission. Setting up this analysis requires you or the group to consider past travel use as well as future needs - potentially factoring fluctuating business markets such as international growth- or the corporate decision to allow greater depth in use by authorizing associates more access to the company’s aircraft.
Once all those who will have access to the aircraft have been interviewed- their input is committed to a form listing city-pairs regularly travelled- and the frequency those city-pairs will be visited annually.
Flight plans can then be created by either the aircraft sales professional helping in this process- or if this work is not being done to facilitate a first-time acquisition but merely a fleet transition analysis- the flight department can prepare the flight plans based on these city-pairs.
Once each of these plans is created- they will yield the flight-time between the cities and the frequency each pair will be travelled annually. Also- this study will provide the team with the proposed annual use of the aircraft and provide the analyst with the necessary data to present to the management team- thus enabling decisions to be made regarding size and capability of the aircraft being considered.
It is at this point that decisions about requirements for range and cabin size can begin to be formulated.
THE 70% RULE One rule we generally apply in strategic planning is that an entrepreneur or company should buy a specific type of aircraft based on 70% of the projected use. If 15% of the proposed use is international travel and 15% is domestic travel- but 70% of all trips are two hours (or less) in flight time- the target aircraft should effectively hit the mark of the two-hour flight requirement. On the other hand- if long-range flights between countries constitute the majority of your travel needs- an aircraft with greater range and cabin space would be desirable.
If you buy an aircraft based on your 30% travel needs- you would probably be overbuying - and costs to buy and operate may outweigh the proposed value of the company aircraft.
Consider cabin size also using the 70% rule. You must bear in mind the number of passenger seats for that percentage of use- as well as other comfort and cabin needs: For example- galley- lavatory- segmented work areas and stand-up cabin features must all be taken into account when building your shortlist of candidate aircraft to fulfil your travel needs.
Soon the categories of aircraft that can be considered become well defined. Small- medium or large cabin aircraft will need to be sorted through- matching the 70% rule with the available aircraft choices.
FACTORING GROWTH ESTIMATES Since buying and selling aircraft have distinct costs- some thought about your company’s growth estimates for the next three-to-five years should be considered carefully at this juncture. Given the training costs- brokerage commissions as well as staffing requirements- changing aircraft frequently should be avoided.
Once the category of aircraft has been chosen- the Board or advisor-team can begin the final step in the analysis: development of the budget for purchase and operation- not only including capital costs for purchase- but also modernization and upgrade costs throughout the ownership period.
Over the following pages- we will turn our focus on helping the trusted team shape the budget for purchase and operation - and finally make the decision regarding aircraft ownership- as well as review other options available.
If you are ready to explore the following step in this series- then there is no doubt about the Value of Business Aviation to you- but there may be other logical methods of creating the delivery of that Value.
Charter- Fractional Ownership or Leasing will be explored to establish the best solution for you and/or your company to begin enjoying the incredible world of Business Aviation. Each of these tools is designed to offer vision and balance to maximize your ultimate success.