Upsizing the Flight Department

One of the factors contributing to Business Aviation's growth comes from existing operators with single aircraft who need more lift than one airplane can provide.

Ownership

Dave Higdon | 4th November 2014

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Dave Higdon

Dave Higdon is a highly respected, NBAA Gold Wing award-winning aviation journalist who has...
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And as companies grow many find themselves shortchanged by operating only one airplane. They need access to more destinations and more missions, serving more people needing more transportation. So how does a company set about upsizing its Flight Department?

Savvy operators tend to turn to outside sources initially to fulfill the initial extra demand. Longer term, however, these companies often decide that charter or lease fails to meet their needs – whether operationally, financially, in terms of reliability, or because of security and confidentiality issues. The logic varies from one operation to another, but existing aircraft owners generally understand that ownership yields the biggest benefits.

When the lines cross between financial and flying needs, companies find their best long-term solution is a second aircraft. The question of exactly which aircraft offers an infinite variety of answers, each involving answers to myriad questions about the variations in a company's needs.

So while the scope of this article can't speak to model specifics, it can offer prospects a glimpse of the factors to consider when weighing the value of a second aircraft (or more) for the operation. We also stop short of listing the factors that drive the decision to expand the fleet. Those differ as infinitely as any other part of the process. Note, also, that we address only Part 91 operations. The regulatory considerations applicable to charter operations – even when owned and operated by the company that owns the aircraft – move these issues up several significant levels.

Finances

Acquiring a second aircraft won't necessarily simply double whatever fiscal issues the current aircraft brings: Some will be the same, others will differ; although matching aircraft types and models may bring some economies of scale where training and maintaining come into play. If you’re buying pre-owned, the amount of depreciation available bears weight on the transaction - while finance charges remain deductible, available depreciation can vary depending on how the prior owner treated the aircraft on its taxes.

All the financial issues should fit into the company's available resources - purchase, operation, maintenance and crew costs – so adding an airplane that strains the company books may indicate a questionable aircraft choice, or questionable decision to add another aircraft in the first place.

Fortunately, the Business Aviation community offers numerous practitioners in the arts and sciences of predicting the specific flight-hour costs of an aircraft's use. The tax accountants can identify any available benefits. And, as one aviation-focused accountant shared, tax benefits may come from buying a pre-owned aircraft and investing in upgrades to improve the cockpit, cabin and/or performance. Those improvements are all game for depreciation claims.

Staff Impact

Again addressing only Part 91 Operations, depending on the structure of the flight department and the planned use of the added lift, adding an aircraft will at the least require depth to be added to the company's qualified flight crew. Even if existing staff qualify to operate the aircraft (a distinct possibility in this community), increased flight hours of operating more than one airplane will grow significantly.

Appropriate training and ratings must apply, of course. And that may be an expense worth factoring – particularly if the crew being trained must travel to receive their training and ratings or endorsements.

Flying plans influence staff planning: For the majority of business aircraft, domestic operations dominate within the United States; for a growing population, however, international ops are an increasing factor. Again, appropriate training and documentation must apply; a passport and a check to assure the boss that any newly-hired crew won't get stopped by CBP because their name adorns a no-fly list somewhere. This isn't generally an issue domestically, since American citizens enjoy the freedom to move in interstate travel free of state border checks. The moment you plan to fly beyond those borders, however, that house must be in order…

And while we're thinking internationally, one of Business Aviation's more surprising growth areas involves the BusinessLiner segment. Purveyors of these airliner-come-corporate-jets confess they're thrilled at the expanding popularity of their wares. That popularity also does good things for the employment prospects of Business Aviation pilots and cabin crew.

Those long-legged aircraft along with the ultra-long-range and large cabin purpose-built business jets need more crew than domestic, even transcontinental operations. When a jet can spend 13, 14, even 15 hours aloft, clearly, a single crew set would be working an inordinately long flight and duty day. This is where crew issues become more significant for expansion at the upper end of the fleet; where supplementing both flight and cabin crew numbers is the only answer.

Conversely, adding an aircraft with a type-rating common to the existing aircraft can significantly simplify crew issues, which brings us to the final personnel issue: cabin crew. While Part 91 gives operators a degree of latitude and flexibility that neither Part 121/Part 135 flying enjoy, Part 91 still speaks to the needs for cabin crew when passenger numbers move up to levels comparable to commercial operations.

One operator reminisced of the time his company considered taking on a former twin-turboprop airliner with excellent speed capability. “We talked about refurbishing and refitting the interior to seat 22-23 from 30 and then operate it as a corporate shuttle,” he explained. “Our pilots came from our employee ranks; no public carriage – Part 135 capacity wrapped in Part 91 simplicity.

“Then we came across Part 91.533. For the boss, that was us running aground while trying to put people on a beach. It killed the idea there and then.”

A look at Part 91.533 Flight Attendant Requirements will show the root of the boss' problem:

(a) No person may operate an airplane unless at least the following number of flight attendants are on board the airplane:

1. For airplanes having more than 19 but less than 51 passengers on board, one flight attendant.

2. For airplanes having more than 50 but less than 101 passengers on board, two flight attendants.

3. For airplanes having more than 100 passengers on board, two flight attendants plus one additional flight attendant for each unit (or part of a unit) of 50 passengers above 100.

(b) No person may serve as a flight attendant on an airplane when required by paragraph (a) of this section unless that person has demonstrated to the pilot in command familiarity with the necessary functions to be performed in an emergency or a situation requiring emergency evacuation and is capable of using the emergency equipment installed on that airplane.

Source: http://www.ecfr.gov/cgi-bin/text-idx?node=14:2.0.1.3.10#se14.2.91_1533

So you can now tell your colleagues that those Business Aviation cabin crew coming out of those large-cabin BusinessLiners serve several purposes – and aren't just another perk or luxury…

Room in the Inn?

Of course, business airplanes – even those flying at the upper limits of average hours – still spend less time flying than on the ground. The chances are that the bulk of those hours (8,760 hours of any non-Leap Year) are spent at the aircraft's home base. Without turning this into an article on the relative aircraft health, safety and security benefits of hangaring, we'll leave it as a given that companies seldom prefer the money savings of ramp parking over the rent and ground-handling costs of a nice dry hangar.

The inability to hangar a second aircraft at the existing home field may be a temporary issue solved by time; at some airports, however, it may be a long-term issue waiting on someone else to move out, or for the airport to invest in more hangar space.

Then there's the issue of airport access to that new airplane; making sure its performance allows routine use of the home field should be an early part of the analysis.

Second-aircraft prospects may find their best solution lays in relocation to another, hopefully still-convenient, facility with space for both airplanes on the one field – or to use a runway better suited for the new airplane. Of course, the perceived inconvenience of basing two aircraft at two different fields may not pose a problem at all, depending on their proximity and how the company fills the aircraft seats. But hangaring also has a parallel issue when it comes to convenience and accessibility.

The Wrenching Experience

Maintenance… Part 91 aircraft, particularly highly sophisticated business-turbine hardware, require some attention on a regular basis. For one, merely keeping the software in avionics systems up-to-date may entail a visit to a shop. Then there are engine checks, the prospect of maintenance bulletins or airworthiness directives (ADs), and the unavoidable annual inspections required to keep the aircraft safe and legal.

If the home field offers expertise in the specific aircraft's systems – engines, avionics, airframe – the expanding operator is pretty much home free. But most airports don't boast a specialized service center, avionics tech shop or engine-overhaul facility.

Here's where enrollment in an hourly maintenance program begins to hold its strongest appeal; the provider can help the expanding operator identify the best shops for the aircraft's needs – and point the operator in their direction, if not already linking up shop and owner.

Maintenance considerations may also influence buying decisions. And, again, an operator already flying a specific brand may find adding a second airplane from the same company provides critical mass to reduce maintenance costs and training.

Getting It Right

The one thing we avoided here is advice on making the model choice. As noted, the variations offer infinite combinations to weigh. One element remains unchanged, regardless of the model: whether you’re adding a second, third or thirteenth aircraft, match the machine to the missions envisioned.

The best answer may be a second type of what the company already flies – a cost saver. But the best answer may be something smaller or larger...or with extra range, or better runway performance for increased airport access options. The answer to the key questions always comes down to finding the best match to the mission needs and company resources - at least, until mission needs or resources change again, and a third (or different) aircraft is needed to maintain the match. Then the company executives can repeat the process, weigh the factors and find a new best match to help keep the company growing.

Read more about: Buying Jets | Flight Department