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LOW-LEVEL BUY-INS

Did your last airline trip do it for you – or do it to you? The inventory of lost time flying with the airlines is the stuff of modern legends: an hour getting through security – after the frustration of just getting a boarding pass and your bag checked.

Dave Higdon   |   1st August 2011
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Dave Higdon Dave Higdon

Dave Higdon writes about aviation from his base in Wichita Kansas. During three decades in...
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Buying In To Business Aviation:
There’s a lot more to BizAv than Jets.

Did your last airline trip do it for you – or do it to you? The inventory of lost time flying with the airlines is the stuff of modern legends: an hour getting through security – after the frustration of just getting a boarding pass and your bag checked.

This doesn’t even touch on the likely possibility of a couple of undisclosed bag fees- an overweight fee (for one bag barely overweight); and the sandwich you had to buy… And that’s before they bumped your bag because (wait for it) luggage pushed the small jet over its take-off weight.

For some- airline-flying stands as a price-value disappointment unequaled in modern business. But what is your alternative? Did you ever consider a company aircraft? It may well be that your company isn’t positioned to move into a jet of its own - but the variety of airplanes useable for business is enormous. It’s something of a modern-media myth that the Business Aviation arena encompasses only the multi-million-dollar jets you see lined-up across from the airline terminal.

As a matter of fact- Business Aviation isn’t an airplane. Business Aviation is a practice: Namely- the use of a transportation tool by a business- and flown for its needs. As the National Business Aviation Association recognizes in its Light Business Airplane outreach- thousands of business people use airplanes that are not jets- and not even turboprops. Many use piston airplanes - some of which are owner-flown- while others are flown by a professional crew.

Airplanes as simple and straightforward as a Cessna Skyhawk or Piper Cherokee- or as complex and high-performance as a Mooney Ovation- Beech Bonanza- Piper Comanche or Cessna 210 Centurion - all are used for Business Aviation purposes. All are single-engine piston airplanes with cruise capabilities ranging from 135 to nearly 250 miles per hour.

Others may use a twin-engine piston- while still others may fly a single- or twin-engine turboprop. And then- of course- several thousand companies do use jets. With such a broad spectrum of aircraft used in the Business Aviation arena- the chances are that an airplane awaits you out there- one that will meet your needs- help you accomplish business missions- and work within your fiscal structure.

‘THE SKYHAWK AIRLINER’
You- or your company do not need seven- or eight-figure-profits to afford to own and operate an airplane; you don’t even need six figure profits. That’s because for every need level and every matching budget- the General Aviation fleet holds a solution to match.

Frankly- the buy-in for Business Aviation doesn’t require a rich company or individual – just a smart- savvy one… one interested in never again gracing an airline terminal. Consider some relatively simple- wholly affordable solutions.

Cessna builds arguably the ultimate in the simple airplane- the nearly ubiquitous 172 Skyhawk. More Skyhawks have been sold than any other airplane ever made - to date nearly 45-000 have been delivered since production started in 1956.

All the while- Piper manufactures descendants of its Skyhawk competitor- the PA-28 Cherokee which came along five years later in 1961. Now represented in production by the Piper Archer LX and Archer TX- various PA-28 models remain popular and capable – just like Cessna.

The point of the above? Your businesses can use these models for all the missions you normally associate with Business Aviation: personal and personnel transportation; materials hauling- and more.

Distance and load will limit the level of utility- but for business trips up to about 300 miles one way- both beat driving the same trip hands-down – and you probably can’t even use the airlines to fly to the cities you need to visit.

This writer has on several occasions chartered a 172 or PA-28 from FAR 135- approved operators for similar missions. Indeed- the FAR 135 charter-company’s airplanes were single-engine piston airplanes- four seats- fixed landing gear- fixed-pitch pistons - and those airplanes certainly earned their keep! (We note this to dispel any inkling that a business airplane has to have a turbine engine- pressurized cabin and an executive interior.)

It is use that determines categorization. It is mission that determines what works for your company. Business Aviation is very much a tailor-fit solution depending entirely upon the needs of a specific company or individual.

Beechcraft Bonanzas- Piper Mirages and Cessna 206s may seem more attractive as business aircraft because they fly faster- further- and carry more than the entry level piston models- but again use will determine the appropriate categorization for you and your company.

Experienced business operators know the key remains allowing the mission to determine the extent of capability a would-be business aircraft operator needs. With this in mind- we’ll look at identifying parameters that help drive aircraft need.

REGIONAL LOOPS VERSUS NATIONAL CIRCUITS
The longer the distance of your average business trip- the more important speed will become. An acquaintance with a need to visit several cities surrounding his home-base in Wichita on business every month found that driving was doable and flexible- but was certainly not cheap when he considered the value of his time wasted behind the wheel.

Oklahoma City- Tulsa- Denver- Kansas City- Omaha and Dallas: In the course of a month he wasted 12-14 days a month primarily due to the drive-times. The trips ranged from 250 miles to 550 miles – one way.

“Airlines do serve Dallas and Denver from Wichita- but who can afford to pay those fares two or three times a month-” he asked. After engaging in a lengthy conversation with a couple of owner/pilots- this acquaintance (Bill) was ready to consider upgrading his travel options with a small plane.

“My accountant worked with me on the trip costs- versus the impact on my time – and she gave it a value commensurate with what my company pays me-” he outlined.

“We looked at a couple of solutions: charters or - what we ultimately decided was smartest - a company-owned- company-flown airplane.”

He and the accountant developed a five-year budget plan for a plane and a pilot – “I became the pilot to make the budget work-” Bill recalled. “I was doing the driving- and I would do the flying.”

Bill then got in touch with an airplane broker- further refining the money into a list of mission-suitable- financially-viable candidate aircraft. The airplane sought had to work on three primary levels to be considered:

• First: it had to be fast enough to make Bill’s longest trip – 550 miles – no longer than an overnight trip- and the others all day-trips;

• Second: it had to be approachable for a rookie pilot and instrument-flight capable. But getting the speed meant few fixed-gear choices (neither of the fixedgear options with the speed needed fit the budget);

• Third: it had to fit an operating and purchase budget of about $80-000.

“When they told me the number of aircraft that we could afford my heart sank-” Bill told me. “I just knew you had to be rich to get a good airplane- and figured nothing would work for that little money.”

He learned a lot from the broker- and they finally narrowed the search to a suitable model with numerous examples available: the Beech Model 33 Debonair. Before long- the broker- a maintenance technician with inspection authorization- and the would-be owner were on their way to look at a mid-1960s Debonair with a solid- low-time engine and enough accoutrements to get him into instrument flying. The following week- the broker- the Debonair- its new owner and his flight instructor picked up the new plane.

“I got my first two hours in my new plane flying a dual cross-country mission back to Wichita-” Bill outlined. With just a few hours more the new owner soloed in his Debonair; the CFI started flying work trips with him – Omaha first- then Kansas City- Dallas and finally Denver. “At 55 hours and five weeks after we got our Debonair- the examiner handed me my temporary ticket…then we started my instrument training.”

That was four years and 300 hours ago. Today- this small-business owner has only driven a trip twice- both times when the Debonair was down for maintenance – but none since renting a Beech Bonanza when the Debonair is not available.

“The little airplane gave me back half my life- and the overall costs - factoring my time saved - is less than driving. I wouldn’t have believed that five years ago.”

TO MAKE A CHOICE- FIRST DEFINE A NEED
Bill picked a plane that worked for a specific set of trips that he regularly drove: Oklahoma City- Tulsa- Denver- Kansas City- Omaha and Dallas. What they had in common was their relative proximity. He could drive from Wichita to Kansas City or Oklahoma City- do business and return home late the same day.

Traveling to Dallas- Tulsa- Omaha and especially Denver- tended to run into a second- sometimes a third day. The Debonair made them all day-trips- though adverse weather or meetings occasionally push the trip into a second day.

Best of all- the Debonair fit Bill’s specific budget. The calculations Bill and his accountant applied took into account restaurant tabs- hotel bills- fuel- auto wear-and-tear and his time spent driving the distances.

“We picked the Debonair because first and foremost it met our mission guidelines- as well as budget-” Bill recalled. “Now I’m doing business in new places because the Beech can get me there cost-efficiently – and that’s key to me deciding to expand in those areas. Know your mission first.”

Had Bill’s needs been further away- or required carrying a lot of equipment- another solution would have been needed. For trips of 500-600 miles to work in a day- a cruise speed of about 180mph would be needed to keep travel times comfortable. At such speeds- Dallas from Wichita shrinks from more than five hours behind the wheel of a car to less than two hours in the cockpit - and the round-trip time tallies lower than the one-way drive. Three miles per minute (180mph) shrinks the country significantly.

Speed is less important for shorter trips- and lowering the speed can make the purchase even less expensive. While Bill spent $75-000 to buy his 155-knot (179mph) Debonair- earn his license and upgrade the panel with a IFR GPS- a Cessna 182 (fixedgear standard- offering a cruise of 140 knots- or 161mph) would cost less- with a lower maintenance load- lower insurance costs and good payload. It would also cover the same trips in just 10 percent more time.

If 700-1-000-mile trips are more regular for your situation- a turboprop might be a better solution. Something that can cruise 225 to 250 knots brings those trips into the same time-saving realm as the Debonair for Bill. Older Beech King Airs- Cessna Conquests- Piper Navajos- early Pilatus PC-12s and TBM 700s are on the market from under $0.5-$1.5 million. Be mindful that beyond the mission parameters- the budget and flying skills required also increase with performance and the number of engines.

If a jet is required- prices can run from under a half million – albeit the older and lower-cost options may also carry operating and maintenance costs much greater than a higher-priced option.

A consulting company- such as Conklin & de Decker (www.conklindd.com)- can be invaluable in helping pull together a cost spreadsheet for pretty much any airplane that interests you. Purchase price- insurance- operation and maintenance costs are somewhat predictable- and absolutely they are numbers you need in hand to make an informed choice.

WHO FLIES?
Of course- not all would-be business aircraft owners want to also fly their own airplane. The lack of a license does not preclude putting an airplane on the company ledgers. Pilots with commercial ratings can hire on as contractors to fly the needed missions- legally paid as contractors under IRS and FAA rules- and provide the owner with some direct input into the plane’s needs and condition.

Contract pilot costs vary: a pilot trying to build time may want less than a more-seasoned veteran who already holds all the ratings and skills needed to work a wide array of business aircraft cockpits. The biggest benefit of hiring out the flying to a contractor (or- if it works an employee) with the proper certificate and sign-offs- is the freedom of the owner to work en route. Conversely- some business owners enjoy the challenge- sense of satisfaction and cost benefits of qualifying to fly their own company airplane.

“The time flying to-and-from an appointment is therapeutic for me-” said Jeff- a real estate businessman who owns a small jet – his second turbine-powered airplane. “It lets me clear my head of the earthly concerns as I focus on the flying and- once up at cruise and on the FMS (flight-management system) I can proof contracts- work on notes or ideas- or brainstorm things I need to do after the trip.”

WEIGH YOUR PLANS WHEN PURCHASING
For Bill- the next step-up will be to a higher-power airplane- one that cruises closer to four miles a minute- to better manage his new- longer-distance trips.

“Brokers have approached me with pitches for piston twins- but the costs don’t work – and I’m not all that interested in taking on the higher demands of flying a twin.”

How about a turboprop? “I- looked at a JetProp DLX (converted Piper Malibu Mirage) and have to admit- it has its appeal - but business will have to get a lot better for the numbers to work-” he added. Single-engine airplanes demand less of pilots than twins- and twins add the expenses of feeding and maintaining two powerplants- regardless of type. Turbines- meanwhile demand more precision and are less tolerant of sloppy-flying because of the higher altitudes at which they fly. And many a turbine airplane requires a second pilot on the flight deck.

So- as noted above- start with the mission- a budget and a plan for who will fly. Consult with authorities- and consider cutting down on your travel frustrations by adding an airplane to the company ledger. The least you have to gain is time!

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