Business Aircraft Ownership: Building the Case

Business Aviation enables companies and individuals to make the most of time. So how much use of a business aircraft is appropriate for you? David Wyndham ponders…

Last month, we discussed the value that using Business Aviation can bring to a corporation or individual. As time becomes of greater economic value, the decision becomes not about having a business aircraft, but how to use this business tool.

According to the company’s most recent regulatory filing, the Board of Directors of Apple, the world’s most valuable corporation, “requires its chief executive Tim Cook to use private aircraft for all business and personal travel”. The stated reason for implementing the new policy is due to “interests of security and efficiency based on our global profile” and Cook’s high visibility as chief executive.

As an Apple stockholder, a user of Apple’s products and as an aviation consultant, my response to the announcement was “It’s about time”.

All individuals who value time - be they corporate CEOs such as Mr Cook or entrepreneurs running their own companies - have many good reasons as well as options for using Business Aviation.

Business Aviation can be accessed via on-demand charter, contract charter, a card program, a specialized card/club program, fractional ownership, timesharing between flight departments, joint ownership or a full-blown flight department. No one form of Business Aviation is superior to another, and all have their strengths. The question is which form is best for the tasks at hand?
 

Business Aircraft Ownership: Information Gathering

How often will Business Aviation be required? Below are some basic recommendations, subject to change, depending on your specific needs.

Aviation usage is usually measured and billed based on hours flown. Depending on the aircraft and the trip specifics such as length and winds aloft, the miles traveled per hour can vary considerably.

One way to estimate flight hours is to review your airline travel. If you fly 150 hours in a year on scheduled air carriers, your business aircraft use probably will be less since you will avoid hub-and-spoke routing. But for first estimates, let’s use airline hours flown.

If you know how many miles you fly per year, say 50,000 statute miles, then you can estimate travel hours by dividing the miles covered by 320mph for trips in a turboprop or by 480mph for trips in a jet. Regional trips totaling 50,000 miles in turboprop airliners might take 156 hours while in jets might take 105 hours. Jets tend to see such a speed advantage on trips over about 200 to 250 miles.

For more accuracy, think about the inefficiencies in your current travel. There may be no direct flights for many of your trips and your connection may be particularly time consuming.

With roughly 10 times the number of airports available compared with locations served by the Scheduled Airlines, business aircraft can take you point-to-point and save you several hours per trip.

That six-hour airline trip might only be three hours by business aircraft. That 50,000 airline miles might end up being 30,000 business aircraft miles, resulting in more time available for what is important to you.

These hypotheticals are generalities, but they are reflective of the time you can save using business aircraft. For a better estimate I recommend that you have someone familiar with your travel requirements look at both trip lengths and aircraft capabilities.

 Business Aircraft Ownership: Aircraft Type

Once you have an estimate of your utilization, the next step is what types of aircraft would be appropriate? This is another article on its own, but following are some general tips:

• How many people will be traveling and how far do they need to go, are the two most important questions for you.
• Will one or two senior leaders be utilizing the aircraft, or will a sales team be transported?
• What size is appropriate for most of your travel needs?

The same questioning applies to range. If most of your travel is of a certain trip-length, that is likely the sweet spot for your non-stop requirement. More seats and more range mean a bigger aircraft that costs more. Fortunately there are many options and different sizes of aircraft available, so the challenge is determining the best overall solution.

A consultant or other aviation-skilled person can be a help with determining your true needs.

One client I worked with traveled from Northern California to Colorado one to two round trips per month. His one-way trip was just less than 700 miles and would take about 1.4 hours by jet. Doing 24 round trips per year required about 68 flight hours. Another two times per year he would travel to East Texas, adding another 14 hours by jet.

The Colorado travel was with two passengers and minimal baggage. Given the seating and range, both a turboprop or light jet were good options. The Texas travel was better suited for a jet. As my client has used charter and flown on both jets and turboprops, his preference was for the speed of the jet.

His need of about 82 annual hours and relatively short trips made it easy to recommend the type of Business Aviation that would satisfy his travel needs.

Moving to Ownership Type…

When travel needs are examined, the next step is determining how Business Aviation will be accessed; will it be via charter or whole ownership, or some form of delivery between those two options? Next month we will discuss various methods for accessing Business Aviation and determining what form of business aircraft use is right for you.

• Read more on Business Aircraft Ownership
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• Find Turboprops for Sale