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A Saga of Success III: A Company’s Results While Using Business Aviation

Posted on: May 20th, 2013 by Pete Agur

Part III which concludes a three-part series that tracks a company’s use of Business Aviation. 

The following are real results of one company’s use of Business Aviation from launch, 18 years ago, to today.  The company and its executives are de-identified to maintain privacy.

Case Status

The Board approved the acquisition of a light jet in support of the business plan of their new CEO, Phil.  They hired him to transform the company from a mid-level player to an industry leader with revenues in the multiples of its historic highs.

Phil’s strategy was to grow the business by entering new territories.  That is where the airplane came in.  Small teams of corporate executives and sales folks could conduct concentrated and highly effective roadshows in first and second tier markets.  He also intended to use the aircraft as a tool to drive a significant shift in the company’s culture to one of high touch and creating even higher service value while continuing to manage costs.

Plane Practice

It was important to Phil for the company to enter into Business Aviation in modest increments.  He wanted the results of what Business Aviation could do for the company without the distraction of misunderstandings about his intent.  With that in mind, he selected a used light jet with an excellent pedigree as their first airplane.  This choice kept the capital and operating costs down and avoided any appearance of excessive “ramp presence.”

To inaugurate Business Aviation services, Phil conducted a C-suite meeting.  During that session Phil talked through how he wanted the aircraft to be used, creating the foundation for their Business Aviation Usage Policy.

  • The authorizers for aircraft use would be any of the six senior executives.  This level of oversight pre-empted the need for a charge-back system to meter demand.
  • The aircraft would be available on a best-impact-for-the-business basis.  That meant trips with a higher benefit to the enterprise would have first priority.  Phil confirmed he would change his schedule to accommodate high-value trips for other passengers.
  • Anyone using the aircraft was encouraged to take additional team members along.  This improved the impact of the trips and shortened the business cycle.
  • All senior executives were challenged to add rising stars to their travel teams.  This would broaden and accelerate the development of the organization’s leadership team.

To put it gently, with Phil’s oversight, the addition of aviation services to the company’s internal resources made a dramatic and permanent impact.  But, not everyone bought in right away.  A few months after the aircraft was put into service, Phil asked me to have a conversation with his CFO.  The previous week, the CFO had a one-day conference in a city 400 miles away from home base.  He wanted to take four members of his staff, so he rented a van and drove the eight hours each way.  His logic was the out-of-pocket costs of the van were much less than using the airplane.  Phil explained that if this CFO valued people’s time so little, he could find a new CFO.  The next day I met with the CFO in a small conference room for about 30 minutes.  I told the CFO that Phil had asked me to explain two things: The real cost of people’s time and the career opportunity associated with his current thinking.  The CFO immediately became a huge advocate for the airplane.  All humor aside, years later he took the time to tell me how much of a Business Aviation advocate he had become based on his personal experiences and observations.

Since then the company has accomplished its growth goals, and much more.  As their business footprint and volume expanded, so did their Business Aviation services capabilities.  Today they have three airplanes that routinely blanket North America and several international destinations.  And the impact of those efforts is telling:

 

  • The company’s growth over the past 18 years, in millions, has proceeded as follows:

Year                       Total Income               Growth                   Net Income        Growth

1994                      $510mm                                                        $51mm

2011                      $1,392mm                     273%                       $278mm           545%

That is an average compounded growth rate in revenues of over 6% per year and a compounded net income growth rate of about 10.5% per year.  This growth is an even more amazing achievement considering much of it has occurred during the most difficult financial period in modern times.

The company has achieved two other significant goals Phil established:

 

  • Phil knew he needed to attract top people to work with him to pursue his aggressive business objectives.  And he did not want to burn those people out.  He pushed them to use the aircraft to be home with their families as much as possible.  As a result, he developed a senior leadership team that is the envy of the industry, and that team has had very little turnover.

 

  • The company became a deeply appreciated community citizen.  They are repeat recipients of top “Best Places to Work” awards, reflecting the culture within the company.  Of even more importance to many, they are leaders in a variety of outreach programs like Make a Wish, Habitat for Humanity, Special Olympics and many others.

In Conclusion

As Linda Ellerbee says, “And so it goes,” 18 years ago this company began the use of Business Aviation in pursuit of their goals.  Today they are on the journey to achieve even more.  Phil has retired.  His successor has amped up the flying.  And Phil’s saga of using Business Aviation for success continues.


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