Business aviation is not the only segment of the travel industry that’s been beset with challenges in recent years. Airlines and the hospitality services – from hotels to limousines – are facing massive cuts in corporate travel budgets- as doing more with less becomes the mantra of CFOs worldwide. Looking at the approaches taken by such adjacent industry segments can help shed light on how we might better address our own challenges- as well as provide insight into other surprises that might lie ju
Business Aviation is up there with the rest of them.
Business aviation is not the only segment of the travel industry that’s been beset with challenges in recent years. Airlines and the hospitality services – from hotels to limousines – are facing massive cuts in corporate travel budgets- as doing more with less becomes the mantra of CFOs worldwide. Looking at the approaches taken by such adjacent industry segments can help shed light on how we might better address our own challenges- as well as provide insight into other surprises that might lie just beyond the horizon.
While our industry no doubt will recover- however- its future growth is unlikely to resume the linear upward path of the early 2000s.
Last month I sat in on a meeting of the New England Business Travel Association (NEBTA)- a regional chapter of the National Business Travel Association (NBTA). NBTA is NBAA’s counterpart- providing educational and networking opportunities for corporate travel managers and their vendors and service providers. In the absence of a corporate flight department- NBTA members often are charged with securing business jet travel for their companies’ senior management – vetting for safety- reliability- service quality and - of course - price.
In this meeting- a panel of four senior corporate travel managers – some charged with corporate support services well beyond travel – shared steps taken by their respective companies to reduce travel costs. Most reported directly or indirectly to their CFOs- and were assigned to develop their own initiatives to meet required cost reductions. In the words of one manager- “Any cost not directly related to manufacturing- selling- or delivering a product or service to a customer- was subject to review and elimination.”
Indirect costs were centralized- the number of vendors reduced to provide greater bargaining leverage with preferred providers- and strict travel polices enacted – and enforced. No more shopping hotels and airlines for points- Marriott or otherwise. All travel now is to be charged on the company credit card- which provides complete monthly reports to the travel department – not to mention those handsome rebates to the corporation.
And payment of those charges is the responsibility of the employee- to insure timely filing of expense reports – done on line- of course- to speed data collection- analysis and measurement. The goal is to remain on the leading edge of performance- without being on the “bleeding edge” of uncontrolled costs- as that which cannot be measured- cannot be managed. And online expense reporting turns out to be only the tip of the iceberg when it comes to using technology to reduce travel costs.
Years ago- many of our pilots began using Skype to stay connected with family on extended road trips- particularly on intercontinental jaunts many time zones from home. Most laptops today are equipped with builtin video cams. Add a 2.5mm headset jack- download the software- and you’re in business for VoIP (Voice Over Internet Protocol) with video- for far less than the cost of a dialed call.
At the NEBTA meeting- I heard that not only is VoIP becoming the standard for most corporate communications- VoIP with video is replacing many regular face-to-face staff meetings- and webinars are replacing training requiring travel to a central location. The investment in videoconferencing equipment easily meets corporate ROI requirements in reduced travel expenses- as managers from all over the world now meet regularly via video- rather than incur expensive business class airfare.
What became very clear during these discussions is that these moves are not temporary. They are permanent game-changers for privately and publicly held companies alike- fueled by improvements in the speed and capabilities of the Internet. There is no going back to the free-for-all corporate travel in the past. The “…but that was the only room/air fare/rental car available” excuse won’t wash- as the central controls and corporate contracts make subverting in the name of points and miles virtually impossible.
So how do these moves affect business aviation? Curiously- the meeting opened with a story that highlights the strength of our industry in this era of ever-tightening travel controls. The event was hosted at The Lenox- one of the Travel & Leisure Top 500 World's Best Hotels in 2010. Dan Donahue- the General Manager- told of his visit to another fine hotel more than two decades ago- which required ascending a grand staircase of inordinate length. It was the hotel employee at the top landing- awaiting his arrival with a glass of ice water that defined his visit. The need was recognized- anticipated- and provided for- in a very personal way.
And that’s what business aviation can do at its best: provide one-on-one personal service and connection at a level unmatched by VoIP- webinars- or videoconferencing. While costs sometimes can best be controlled by cogent use of technology- that will not replace the need for human contact and face-to- face connections - particularly as the global marketplace expands.
While flight crews may use Skype to stay connected to family- they come home to applaud a school play or concert- and cheer at a Little League game. Building family ties or healthy business relationships requires you to be fully present- as often as possible. And only business aviation enables senior managers to do both.
With more than thirty-five years’ aircraft management- charter and FBO management experience- Gil Wolin is Senior Vice President- Eastern Operations and Communications for Solairus Aviation. Prior to joining Solairus- he served in a similar role for TAG Aviation USA. Wolin is a past director of the RMBTA and NATA- and he currently serves on the Advisory Boards for Corporate Angel Network and GE Capital Solutions-Corporate Aviation. Gil can be contacted at [email protected]