Within most of the material that has been written about the set-up of a new corporate (or even personal) flight department- the information is geared towards the needs and concerns of the Chief Pilot- Director of Aviation or Human Resources Department.
A CEO’s Guide:
Staffing and managing your own flight department.
Within most of the material that has been written about the set-up of a new corporate (or even personal) flight department- the information is geared towards the needs and concerns of the Chief Pilot- Director of Aviation or Human Resources Department. Little has been written as an aide-de-camp specifically for the CEO- or individuals who wish to leave the airline- charter or fractional world that they are used to- and instead take control of their own air transportation by purchasing or leasing their own aircraft- either to completely replace their current travel arrangement- or to supplement it. It is hoped that this article might bridge this perceptible gap a little.
To be in a financial position to own or lease your own private jet aircraft- places you into an exclusive group that statistically equates to one in every 40-000 people. Unless you have been fortunate to have inherited or married into your wealth- it is highly likely that you can be classified as an Entrepreneur- meaning: ‘One who creates a product on his own account: an individual who starts his/her own business; one who organizes- manages- and assumes the risks of a business or enterprise.’
As an entrepreneur you are eminently qualified to set-up and command your own flight department. However unless you have a background in aviation you may easily become annoyed and confused by the jargon and possibly even the attitudes of some of the people that you meet.
Aviation can feel extremely intimidating to an outsider. Especially if your entire aviation experience to-date has been gained as a passenger flying on the airlines. You are a half step ahead if you have a friend or family member who owns and flies their own ‘little’ aircraft- but even then- the caring and feeding of a jet- and the infrastructure necessary to support its safe and reliable operation is vastly different from the experience and knowledge gained as the owner of a small light aircraft. It is highly unlikely that your friend is properly schooled or sufficiently experienced to advise you in this endeavour.
THE FLIGHT DEPARTMENT
The National Business Aviation Association (NBAA) states: “...The purpose of the corporate aviation department is to provide safe- efficient and convenient air transportation to assist in achieving the mission and goals of the company. The aircraft is the strategic tool used in fulfilling that role. The corporate aviation department should be viewed as an integral and strategic element of the corporate structure- regardless of the company’s primary functions. A manufacturing firm depends heavily upon its production facilities and personnel- but would not be able to function without its administration- sales- research and other essential departments. In the same manner- the aviation department provides a variety of transportation and communication functions- which- once instituted- become indispensable to the company’s operations.”
A flight department can be set-up in a multitude of different structures. The simplest form is when you hire just one pilot- who in-turn orchestrates and runs everything for you- and directly reports to you.
Alternatively you might elect to build your own private flight terminal- storage- fuelling and maintenance facility- staffed by an entire company of employees. The only limitations facing you as to how you decide to set it up are imagination- time and money.
Regardless of how you choose to move forward with what you envision to be the ideal structure- you will need to employ an expert from within the corporate aviation industry who can guide and steer you through the jargon- and temper your reaction to what in many cases- may appear as the best way forward- but would end up being a costly- and possibly dangerous endeavour- if you elected to try and go it alone.
THE EXPERIENCE TO DATE…
For the purpose of this article- I will define your current experience as follows:
• For the past four and a half years you have been a satisfied user of a first-class fractional ownership program.
• You have grown to rely on the efficiency of business jet use- but you could use more hours than what your existing program allots to you.
• The easy way forward would be to ‘Re- Up’ your existing share and possibly increase your ownership stake. Alternatively you have friends who own their own jet- and they are extremely happy with the total flexibility that their outright ownership affords them.
• You have gone as far as calling some of the aircraft manufacturers that advertise in the business press. They have loaded you up with glossy brochures and a plethora of detailed reports and analysis that they believe proves that their jet is the best for you.
• You have even accepted and taken an evening dinner-demonstration ride and liked it very much. But you couldn’t allow yourself to get serious about buying yet- as this part of the transaction appears that it will be fairly easy- and foolish if you have not gotten all of your other ‘ducks in a row’ before the negotiation- color- fabric and options selection commences.
Let me tell you- this natural sense of caution is very wise at this early stage. Choosing the right aircraft model is a lesson in technical compromise. You may like the size and layout of one aircraft model- but after some research you discover that aircraft can’t make it out of the mountain airport in the summer- where you own a key factory. Another might be able to make the flight out- but due to performance weight loading constraints- once airborne you will not be able to make it back to your home airport without stopping for fuel.
Talking aircraft performance figures might be captivating at the beginning of the process- but you will quickly tire of it when you remember that you have a business to run and the airplane business is taking up too much of your money-making time.
This is the point that you should hire a business aviation consultant/adviser - perhaps a pilot- a broker- or a management company - who can then handle the analysis for you- ultimately providing you with a simple two- or three aircraft choice to make at the end of this necessary technical process.
This article assumes that you hire the broker to do your dog-work for you. This is because a professional aircraft broker will be able to provide you with total anonymity to the marketplace while ensuring that you have the best market savvy person working on your case- who is aloof from the need to satisfy a specific charter market- or has a desire to push you towards an aircraft that they have always wanted to fly. With the fee agreed upon- it will be the brokers’ job to simplify your choices so you can make a balanced decision.
Once the aircraft model choice has been made- the list of suitable pilot candidates is much easier to whittle down- because you can concentrate on hiring a pilot who is rated and experienced in the make and model that you have selected. Of course you might end up hiring a pilot that needs to go to school on the aircraft before he/she can fly it for you- because your hiring decision transcended the need for a specific type rating because a candidate’s personality was a bigger factor.
If you do try going it solo in setting up your department- please be aware that if you place an advertisement for a pilot without someone to front the responses that the advertisement will generate- you will become buried by the sheer number of applications that you’ll receive. Yet again your broker should handle this for you- so you remain free to get on with your own business.
Most successful entrepreneurs are driven by a passion to work and win. Often a 24/7 ethos develops into being the norm. Fools are rarely suffered- while any direct employee who does not mirror the bosses own ethos- will not remain in the entrepreneurs employment for long.
Once you establish your own flight department- your working philosophy will most likely be tested to the point of ultimate frustration. I am not in any-way suggesting that pilots are less driven or committed to their tasks as you are - but their working environment is probably going to appear alien to you- and you will most likely feel agitated because the way that you may see it- is that you are having to pay for pilots who only work eight or ten hours a week- while the rest of the time they are off enjoying the pay-check that you increasingly grudgingly provide them with.
Wrong! You are way-off if you take this view! Allow me to explain:
UNDERSTAND THE PILOTING PROFESSION
The piloting profession is intensely regulated by both the Federal Aviation Administration (in the US) and also the Insurance Companies. Safety- knowledge- experience- ability- aptitude- physical fitness- mental acuity- eyesight- and judgement are under constant scrutiny and test.
In addition to vigilantly maintaining their certification to fly- the job responsibilities of a chief pilot/director of aviation will include all of the following tasks- and possibly more:
• Fly the aircraft
• Formulate budgets
• Operate within the constraints of the annual budget that you set for them
• Decide or influence new purchases
• Approve bills and invoices
• Decide on the FBO/Fuel Seller that are used at each destination
• Set-up destination transportation (if required)
• Arrange for training of aviation department staff
• Supervise aviation staff
• ‘Hire and fire’ aviation staff
• Maintain flight logs
• Oversee maintenance logs
• Select engine overhaul firms
• Select completion center firms
• Set schedules
• Select galley provisions
• Advise on other aviation and travel matters
• Manage and/or facilitate air travel security matters.
Add to this the fact that when you are away with the aircraft- especially if you use the aircraft for frequent weekend trips to various properties that you own- your employee crew are away from their families and are having to deal with the stress and friction that long or regular absences incite in their loved ones.
Making your pilots come to your office everyday that they are not flying for you- might curtail the feelings of reproach that you have- but you ultimately might be maligning and unnecessarily running roughshod over people that truly don’t deserve it. If later on you find that you are unable to keep pilots on your payroll longterm- it might be time to reassess your attitude towards the working regime of your pilots.
If you hire your broker and your pilot before you buy- you will be laying a strong foundation that will fast-track your fledgling flight department to immediate success- while reducing your potential headaches to none.
PICKING AN ENTITY
As well as selecting the right aircraft- you will need to decide on what type of entity you will own and operate it under (liability and tax issues abound here); under what flag (registration) you will fly under; where you will house (hangar) it; who will insure it for you; and who you will allow to use it within your organization or family; who will be overseeing the flight department for you; who will communicate your desired flight schedule to the flight department; and who will be reporting back to you with flight department business.
Again most- if not all of these issues can be addressed from the paid advice that your broker will provide you with.
WATCH THE BALANCE SHEET
Once all of these operational positions have been filled- you will still want to keep a close eye on the balance sheet of your new flight department- using the valuable experience that you have already gained by incurring and settling the monthly costs that you have had as a fractional owner. Outright ownership of your own aircraft within your own organization should best your previous cost model from a dayto- day operating cost or per-flight-hour standpoint. Your debt service or loss of capital will obviously be much higher though. Make sure that your chosen flight department manager is fully versed and proficient in cost analysis- budgeting and reporting.
The flight department manager does not have to be a certificate pilot. Many contemporary flight departments are choosing a manager who is skilled and certificated within the aviation maintenance field instead of flying. This is logical when you consider that your maintenance person will spend much of his/her time at the hangar office- and therefore is able to act as the base manager for the entire operation.
Having to work on the road- in a hotel on a lap-top and with a mobile phone is considerably less efficient than being in the same office with a desk-top computer and land-line. This concept definitely provides ‘food for thought’ which is worth exploring if you plan on setting up a self-contained flight department in your own private facility.
Having a manager who has successfully passed the NBAA’s Certified Aviation Manager (CAM) program is a definite advantage- as that individual has achieved a known management standard and is fully qualified to lead your department.
Next month- we will consider an ‘Aircraft Owner’s Bill of Rights’ that I created for new owners that hire me to be their broker. In each case- the document should be tailored to make it fit for the owner that it is to apply to. The purpose of this sequel will seek to establish acceptable expectations for a CEO to have of his/her Flight Department staff- and also offer a checklist for Flight Department staff to brush up on their work-ethos and better position themselves for consideration for work in a new Flight Department.
If you have any questions regarding this article- or would like to receive some free advice- you are welcome to contact Jeremy at JetBrokers- Inc. at +1.636.449.2833- or email: [email protected]