What could you be doing to keep the operating costs of your flight department down? Dave Higdon spoke with a variety of operators to piece together a picture of the industry best-practices…
The tips and tricks of operating a business jet vary. Whether using airports with lower fuel prices, avoiding FBOs with excessive ramp fees, or learning which airports and FBOs make the extra effort to save you money and time, you’ll find a variety of avenues to explore.
The ideas will have varying impact on your operating costs - from the simple practice of flying a cleanly polished aircraft, to paying a negotiated contract price for your fuel. Nevertheless, the collective goal is to gain the greatest overall benefit to help manage costs on a long-term basis.
Although achieving the lowest costs on every flight faces an inherently ‘aviation’ challenge (namely facing costs that vary according to the part of the country the airplane happens to land in), many aspects of operating costs are subject to cost-control practices common to other businesses.
Each cost-saving suggestion should be taken up by the operator with an intent to audit and confirm its effectiveness.
Given the many variables at work in business flying, you may find that your practices do save money for the company or owner. But other expenses may offset the impact of the savings on your total operating costs. In other words, success in some areas doesn't guarantee overall savings.
For most operations, confirming the impact will take multiple billing cycles to build up a broad record of operational costs under any new regimen. Six or more months in a new program should show its impact on costs.
With the above stipulated, following are our three top tips for making savings when operating your business jet.
Tip #1: Fuel Cost Management
Modern turbine aircraft fly far more efficiently than their predecessors of two or three decades ago. The differences can be as much as 40% less fuel burned compared to the powerplants of the 1970s and 1980s.
Despite these efficiency gains, fuel costs continue to constitute as much as two-thirds of an aircraft's variable operating cost and illuminates the importance of employing best practices in the selection of fuel vendors. This is particularly the case where the airport gives operators a choice of fuel dispensers.
Pilots and owners employing the best practices in fuel selection seldom find a one-program-fits-all solution. As one contract pilot told AvBuyer, “It's best to use more than one solution because not every airport will offer every program or every fuel brand. There are savings available by using the program or card that's the most-advantageous for that particular stop.”
Two or three fuel cards and program membership for the FBO chains visited the most should suffice. The broader the chosen program’s reach the better the benefit for the operator. As a practice, pilots and operators polled for this article recommended using no fewer than three different fuel-program types.
Several added that FBO programs and those of the fuel companies often offer side benefits with further economic value. “You can't know all the benefits you could be using if you never read the mailings or the bills,” one pilot explained.
“The card may well offer benefits beyond the fuel savings. For example, the program we use provides savings when using specific catering and cabin-service companies, adding to the potential value of our savings.”
Tip #2: Pre-Paid and Hourly Maintenance Programs
Hourly maintenance programs are discussed in depth elsewhere within this edition and exist in various forms – from third-party tip-to-tail programs covering every aspect of business aircraft maintenance, to OEM-run programs tailored to specific elements of an aircraft, including its engines.
The ultimate thing the operator gains is predictability; budget stability. The programs vary in their scope and coverage but share the same basic structure: Operators report their monthly aircraft usage and pay a fixed, hourly fee toward their maintenance needs.
Then, when a need arises, the operator can contact the maintenance-program administrator and arrange for necessary work to be done by the program's pre-approved people – or at a shop approved by the program administrators.
Part of the appeal of these programs is how they can function as de facto warranty programs for aircraft that are out of warranty. But there's no question that the major appeal stems from the predictability of maintenance costs – insulating an operator from the shock effect of a sudden unplanned maintenance event.
Tip #3: Always Consider Alternative Lift
Finally, the most efficient flight operations tend to weigh whether the company airplane provides the best option for each trip. A relationship with a charter operator can provide the baseline cost to apply to any given trip.
Considering whether to use the company airplane is a fair question where minimizing operating costs is concerned. Depending on the length of the trip, the stops required and the personnel load, the company aircraft may not always be the most cost-efficient option, which could be a step up or a step down in aircraft range, size and capability.
One size seldom fits all, where Business Aviation is concerned. The airplane selected should represent the best fit for the majority of your mission needs. A relationship with a charter or fractional ownership provider with fleet aircraft available to fulfil your remaining needs will help save on your operating costs, ultimately.
The three tips highlighted in this article are not the only three cost saving tips to reduce operating costs. Each flight department develops its own set of practices, and there are almost as many tips as there are operations.
Ultimately, as highlighted by the three tips in this article, diligence, effort and carefully selected relationships in key areas will ultimately help achieve the goal of keeping your flight department costs under control.