
	David Wyndham of Conklin & de Decker Information and Consulting firm

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Stay Competitive Keep your aircraft flying
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Stay Competitive - "Keep your aircraft flying"

By David Wyndham

As we head into spring, we are seeing crude oil prices easily staying above $100 per barrel. Certain sectors of the economy are soft. If your company aircraft operation is being hit twice: high fuel costs and a decline in profits (or increased losses), you may be inclined (or directed) to cut back on flying. This is bad for two reasons.

Reducing your flying hours drives up your average costs. A light jet that has a variable cost per hour of $1,750 will cost $700,000 to fly 400 hours per year (fuel & maintenance reserves). With a typical fixed cost of $400,000 per year, the annual operating budget is $1.1 million, or $2,750 per hour. Reducing your flying 15% to 340 hours annually gives you variable costs of $595,000 plus fixed costs remain a constant $700,000 for a total operating budget of $995,000 - only a 9.5% reduction. Plus your average total hourly costs increase to $2,926 per hour.

Reduced flying may make your operation seem less important to the company's mission. The effects of the reduced flying on the budget are immediate, but the potential loss of business from reduced productivity and reduced contact with customers or vendors won't be direct and won't be noticed for months.

You want to be proactive for your company. Here are three ways to stay competitive by marketing your services even harder than ever.

Remind folks of the time saved. Airline travel delays were lousy last summer and this summer might be worse. Spend six hours on the ground watching thunderstorms rip apart the airline schedule and you'll know what I mean. Longer delays mean even greater time savings for the people who fly on your business aircraft. Put together some metrics from 2007 and 2006 showing the estimated time saved. The US Bureau of Transportation Statistics lists US Airline On-Time Statistics if that is a help.

Remind your executives how much more productive they are. Not only by the time saved, but by how productive they are in the safe, quite, private cabin of your business aircraft. You can do this again by publishing in-house statistics, quoting studies, and by doing an in-house survey asking how much time and how productive your passengers think they are by using the company aircraft.

If the aircraft is reserved for "C-Level" executives only (CEO, COO, CFO, etc), see if you can expand the access to the company aircraft by one-tier lower executives. It's not just the CEO who can use a few quite hours in the aircraft to really work and think. What about your sales teams or new product development teams? If you don't already use the company aircraft for some of these functions, I'd recommend that you seriously consider it. Finding new opportunities isn't easy and the aircraft gets your people out with your customers.

As a possible fourth way to be competitive, evaluate putting your aircraft on someone's charter certificate. If your aircraft is under-utilized or has a predictable schedule, you may be able to offset some of your costs with charter revenue. When not used in-house, your aircraft would be available to a charter company who would sell hours on your aircraft and pay you a portion of the revenue. There are a number of considerations here, not to mention the possible cost of Part 135 conformity, inspections, and increased wear and tear by charter customers. It can and does work for folks, so it may work for you.

There is no easier and more productive time machine than the aircraft, if used wisely. Get out there and market your services harder than ever. Focus on the positive results business aircraft bring, and let them know you are on their side.

Globalair.com would like to ask you a few questions; we would appreciate your commenting.

Are fuel cost cutting into your flying?
What are you doing to keep your aircraft flying?

We all gain by your experiences so please share.

Other related information:
Average fuel cost nationwide (by region): http://www.globalair.com/airport/region.aspx

Replies	From	Date Posted
Stay Competitive Keep your aircraft flying	David Wyndham	5/1/2008 8:55:09 AM
Stay competative	Walt Fricke	5/2/2008 10:49:26 AM

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