TOO LITTLE- TOO LATE

Corporate Aviation’s tepid response The great billionaire investor Warren Buffet once said- “It takes 20 years to build a reputation and five minutes to ruin it.”In the case of general business aviation- it seems it took even less time than the five minutes Mr. Buffet quoted. General Aviation- along with some of the other more severely affected industries such as real estate- banks and autos can trace most of their crisis moments to a specific date or occurrence; be it the ...

Interviews & Case Studies

AvBuyer | 1st September 2009

Back to articles

AvBuyer

The AvBuyer editorial team includes Matt Harris and Sean O'Farrell who contribute to a...
Read More

“TOO LITTLE- TOO LATE”
Corporate Aviation’s tepid response

The great billionaire investor Warren Buffet once said- “It takes 20 years to build a reputation and five minutes to ruin it.”

In the case of general business aviation- it seems it took even less time than the five minutes Mr. Buffet quoted. General Aviation- along with some of the other more severely affected industries such as real estate- banks and autos can trace most of their crisis moments to a specific date or occurrence; be it the collapse of Bear Sterns on March 16th rattling the real estate bond markets; Lehman Brother’s collapse on September 15th heralding in financial Armageddon; or the credit markets freezing up in October which brought the auto industry to a standstill. All these events were watershed moments on the way to the largest financial meltdown since the Great Depression. No industry would go unaffected- least of all general aviation whose business can be directly tied to corporate profits.

It’s quite ironic- then- that general aviation can trace its ‘death knell’ not to a specific date of its own- or even to an event of its own making- but to just another mismanaged milestone along the Big Three automakers precipitous decline over the past forty years. That fateful day was November 18th- 2008- when the Big Three paraded their respective CEOs in Washington before Congress to ask the federal government to hand them $25bn in relief funds to correct nearly forty years of gross mismanagement and ineptitude.

Anyone watching those congressional hearings can pin the exact moment down to the minute Rep. Brad Sherman- D-California- pressed the private jet issue- asking the three CEOs to 'raise their hand if they flew here commercial”- further asking them to raise their hands if they had plans to sell those jets. The stunning display of utter bewilderment on the faces of those CEOs leaves little doubt as to how the auto industry got into this mess.

Anyone watching this public display of whip-lashing would have loved to have seen just one of the three CEOs get up and say- “Congressman Sherman… we got here the same way you did - and unlike you- it didn’t cost the taxpayers a single dime”. Sadly you cannot bite the hand that may potentially feed you billions of dollars in relief. Nor can you stick your hand out of a $40 million dollar jet holding a tin cup!

It would be easy to blame this watershed event on our industry’s woes- but to do so ignores the fact that -in my opinion - as a community we failed to adequately combat the public backlash that would ensue from these meetings in the couple of weeks following. Like frozen deer caught in the headlights- our industry stood by helpless in light of the oncoming political freight train. Not only was it a case of “too little too late”- but the message wasn’t clear enough: it wasn’t until February 17th that the NBAA’s “No Plain- No Gain” campaign was announced.

There were of course sporadic ads and print campaigns defending our industry but in my opinion- most either lacked a clear commitment to educate the general public or in many cases failed to even reach the public. All sorts of print media appeared in the business aviation periodicals we all read- but wasn’t this a case of “preaching to the converted”- rather than reaching an uneducated public that was being misled by politicians? To my mind- other articles sent the wrong message.

I remember reading one advertisement claiming that general aviation is important to the United States because it employs 1.2 million people and contributes $150 billion a year to the economy. That is- of course- highly relevant to those of us whose livelihoods depend on this industry- but I’d argue totally irrelevant to 99.9% of the rest of the country.

Not convinced? Think GM and Chrysler: there is very little sympathy from tax-payers these days with regards to the eventual estimated $150-000bn you and I will have spent to save the jobs of a few thousand auto workers who’s Unions stood in the way of our companies being able to compete with the more efficient- and better-run foreign car companies. Essentially- none of us really care if the US auto industry survives- because it does not personally affect many of us- and one might argue that the same is true of the public’s perception of general business aviation.

A better use of advertising space would be to show the average- everyday American how the use of a corporate jet impacts their daily lives - something I believe we- as an industry have generally failed to do clearly.

Take the following hypothetical failure of your local power grid somewhere in the desert of Nevada as an example. The repair requires five engineers and heavy tools to carry out the repair. The use of your utility company’s private jet lands the engineers within a few miles of the power grid failure within just 45 minutes. Two hours later the repair is done- and 800-000 people located in California consequently barely even notice that they have been without power while they were out at work.

Now let’s replay the power failure with our engineers utilizing commercial aviation to reach the power grid: essentially- hours of standing in line at a commercial airport- and then landing at another airport some 150 miles away from the grid immediately adds a lot of time to the repair. Factor in the need to take a rental van for another three-hour drive from that nearest-convenient commercial airport hub- and the problem of how to transport the necessary equipment and parts needed to the destination (if toothpaste is considered a possible explosive substance you’ll have problems getting a TIG welder through security at LAX)- all told- the commercial route ends up adding at least a day (maybe more) to the same repair.

The result is nearly a million angered customers who are without power during this time; millions of dollars in lost revenue for local business; and a big impact on the company’s shareholders- as earnings take a big hit. Suddenly a $20-000 jet ride looks very economical!

My belief that both a lack of clarity and the absence of the correct medium to reach the general public created our current press relations nightmare: recently (this past June)- Rick Santuli- the out-bound CEO of NetJets in a lengthy 10-minute interview on CNBC achieved what hundreds of media snippets here and there were unable to parlay to the general public... Nothing he said was particularly earth-shattering and much of it had been said here and there over the previous eight months- but here was someone who clearly and concisely- and even more importantly in front a national audience on cable TV which reaches an estimated 12 million homes over the lunch hours each business day- was able to paint the positive picture we all know is accurate.

I rue the fact we couldn’t have just had him give this interview on any of the three big networks a few days after the CEOs of the Big Three automakers got whipsawed.

In recent weeks we have seen public backlash and anxiety over the huge role Government is attempting to impose on our private economy. We are seeing the beginnings of a reversal of public opinion shifting back to private enterprise and away from the Federal Government’s power grab.

As this shift takes place it is imperative that general aviation quickly and concisely repairs its tattered image in the public eye. In reference to Mr. Buffet’s quote that I opened with- we do not have twenty years to build our reputation again.