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Business Aviation: 2,080 Reasons Why! Beating the Twin Tyrannies of Time

Posted on: September 29th, 2012 by Pete Agur

Business Aviation: 2,080 Reasons Why!  Beating the Twin Tyrannies of Time

 

By Peter v. Agur, Jr., Managing Director & Founder

The VanAllen Group, Inc.

 

There are two tyrannies of time.

 

The first tyranny if time is that it is non-renewable.  Once time goes by, it is forever gone.  “Benjamin Franklin, a fine friend ofFrance, said it well, ‘Lost time is never found again’,” reports John Rosanvallon, President of Dassault Falcon Jet.

 

“Companies can authorize overtime for hourly employees.  But, when a company wants overtime from executives it is not available” continued Rosanvallon. In other words, they mortgage themselves.

 

With that thought in mind, I asked a number of business leaders if their companies could buy more of their time.  Each person responded they were already giving their all.  In fact, some of their reactions were pretty strong; “If you can find me more time I can use I will give you $5,000,” popped entrepreneur Jim Rice.

 

The second tyranny of time is its relative speed.  It seems we are trying to fit more into each hour, yet each hour is going by faster than ever before.

 

The twin troubles businesses face with time are (1) there is not enough of it and (2) we are all trying to get more out of what time there is, professionally and personally.  So, how do you improve the quantity and quality of your time?

 

Thousands of companies inNorth Americahave discovered their answer: Business Aviation.

 

Creating Time

How can business aviation “create time?”  How can it improve the quality of time?  Business Aviation often gets the job done quicker and better.  This produces a surplus of time that can be used in other ways.  The improved quality of time occurs when you can enhance your productivity.

 

How much time can you create using business aircraft?  For starters, 7-10%.  Most manufacturing organizations would love to gain 7-10% improvement in productivity.  Yet, manufacturing rates have a relatively constant impact on the bottom line.  But improvements in the productivity of your company’s deal makers and business leaders cause a leveraged impact on the business in both the quantity of business done and the reduced cycle time to do that business.

 

Are the 10% time savings real?  Recently one business executive maintained a log of his trips for a two and one-half month period.  He compared the time he actually traveled on the airlines to time he would have taken on a typical business jet.  He flew 31 airline legs that required more than 84 hours to travel door-to-door.  The business jet would have taken about 47 hours for the same trips.  That is a saving of nearly one-week of travel time (37 hours) during only a ten-week period.  Or put another way, he could have gained about 10% in his time available to do other things besides just “getting there.”

 

“According to a July survey of senior management executives conducted by the Wall Street Journal, their average number of annual business trips involving air travel is 49.  That is a lot of days out of the office and potentially away from one’s family.  A business jet can improve the efficiency of these trips, thus decreasing the number to total days away and potentially nights away as well,” says Rob Gillespie, president of Bombardier Business JetSolutions.

 

As an example, a major utility company recently polled its top executives about their use of the company’s airplanes.  One of the questions was, “How many overnight stays can you avoid using the business aircraft rather than the airlines?”  Their answers averaged 17 nights away saved per year.  A workweek includes five days and four nights.  This group of people indicated their business aircraft saved them more than a month’s worth of overnight stays.  That reduction in staying away translates into huge professional and personal gains in time in the office and at home.  In this case, about 9%.

 

Using time well

A common misunderstanding about business aviation is how it is used and by whom.  Business aircraft are rarely used to replace airline travel.  In fact, companies that use business aircraft are also the largest users of airline services. To accomplish their goals they use a blend of public and private modes.

 

When should you use Business Aviation?  When the airlines cannot do the job better.

The following are some of the typical guidelines used by companies in deciding when and how to use their business aviation resources:

  • If you absolutely, positively have to be there and the consequences are big, use Business Aviation.
  • If two or more of you are traveling and it is going to require at least two airline legs, use Business Aviation.
  • If two or more of you are traveling and you can get the job done in one day instead of two, use Business Aviation.
  • If your destination is within an 800 mile radius, use Business Aviation.

 

Business Aviation resources have the unique ability to fill the duel roles of strategic and operational tools.  They are often used like company fire trucks, getting the right people to the right place to make a major impact for the company and its customers.  The relative benefits of using Business Aviation on just one of those occasions are often reported to be worth the entire Business Aviation annual budget.

 

But when the aircraft is not being used to get people to places to put out (or start) strategic fires, the available aircraft time is frequently invested in moving mid-level people to those difficult destinations the airlines do not serve well.  The actual cost of those trips is the direct cost of the business aircraft.  That is seen as great bang for the buck, not to mention the added benefits of saved time and improved en route productivity.

 

A recent Louis Harris & Associates survey, The Real World of Business Aviation, poled business aviation users.  The survey found that fully two-thirds of business aviation passengers are mid-level managers, professionals, and others classified as non-senior or non-top executives.  The passenger tracking of an energy company in the Southeast reinforces this claim.  They documented that 70% of their passengers are non-senior managers.

 

Business Time

In business, it is easy to get caught up in managing costs versus making the best use of time.  After all, the rules and rewards of the game are usually written in terms of a business’ revenues and costs.

 

Jerry Keating, Vice President and General Manager for Jet Aviation’s Business Jets division cites an example, “We have a client who has a long-range jet he uses four days a week to visit his far-flung enterprises.  One of these businesses is a mining operation in the remote mountains ofSouth America.  The mine’s general manager knows that his ore revenues are a function of production efficiencies and market prices.  He works hard to keep his costs low.  As a result, he has been loath to get a helicopter to replace the 2-½ hour drive with a twenty-minute flight.  The business owner has given him no choice… the helicopter will arrive this spring.”

 

I have driven those one-lane mountain roads and come nose-to-nose with an oncoming ore-hauling rig.  In retrospect, I suspect the local manager has not only had time saved but maybe his life, too.

 

Today, there seems to be a universal race to get the job done.  “At Wayfarer Aviation, most of us work at least eleven hours each day.  There simply is not enough time to keep up with all the great opportunities that our current business environment offers.  Although we have all found smarter ways to work, and technology is getting better and helping us catch up with the pace, we still do not have enough time,” says president, Jim Christiansen.

 

“Yes, a business aircraft buys you time.  It buys you precious time to have multiple meetings in a day instead of just one, and it gives you a few quiet hours to collect your thoughts en route to the next important activity.  Sometimes it buys you enough time to work a full day in the office and then fly late into the night so that you are in position for a business breakfast across the country the next morning.  That is not the glamorous side of business aviation, but it is what makes these aircraft so useful,” indicates Galaxy Aerospace’s Chairman Brian Barents.

 

“As busy as we are, our clients are almost always people who have even less time than we do.  Business aircraft are one very obvious time saver.  Years ago we envisioned and marketed aircraft as ‘time machines’.  Today, they are actually used as just that: a method for saving hours or days on the road, away from home,” cites Christiansen.

 

“The choice for a leader is they have to leverage and control their time through access to on-demand travel.  You must be able to control your travel schedule, be it through the use of a twin turbo-prop or a long range jet like a GV,” intones Gulfstream’s president, Bill Boisture.

 

“I can do more business using a business airplane in a single day than I can in three days on the airlines,” claims Executive Jet International’s Chairman Richard Santulli.

 

“We use our aircraft to get from northernNew Jerseydirect toLittle Rock.  There is no way to do that on the airlines.  We can take 8-10 people for a full day of productive meetings.  We are able to go 2 ½ hours door-to-door versus three times that on the airlines.  Added to that is the major plus of the unrestricted work you can do en route.  There is no way we could make that trip on the airlines in one day and be home the same night,” describes Rosanvallon.

 

“Getting information faster and applying it quicker for your business and its customers is important.  If you can gain knowledge, distribute it, and use it effectively you accelerate your business and that creates a competitive advantage,” declares Mike Graff, president of Bombardier Business Aircraft.

 

Quality Time

Is “time” a common commodity or is it a restricted resource?  The most successful people and their companies know the answer.  “The most precious resource is our time.  It does not have to do with efficiency; it has to do with effectiveness,” emphasizes Rice.

 

“When you are standing in line to check-in at an airline counter you really are standing in line to check-in at an airline counter.  You are not meeting, reading, thinking… being productive. The en route environment on the airlines is not conducive to work.  It is forced dead time.  This is the difference between productive travel time and dead travel time,” points out Ed Bolen, President of the General Aviation Manufacturers Association.

 

Business Aircraft users routinely report they are able to be productive during about 80% of their trips in contrast to only about 40% of their time on the airlines.  That is a net gain of 40% useful time for the duration of their air travel.

 

What is the quality of that en route time?  The Louis Harris survey found travelers engage in much more productive activities while using business aircraft.

 

Per cent of the travel time

Activity                                                           Business aircraft          Airline

Work-related meeting w/co-workers              41.0%                            5.2%

Work-related reading                                      28.1                             37.5

Non-work-related reading                              13.3                             32.8

Sleep                                                               10.5                             22.5

Work-related conference w/customers             7.0                               1.0

 

The same Louis Harris survey asked the participants to rate their productivity in the business aircraft as compared to their offices.  The typical response was that their time in the aircraft was actually more productive.  When asked how that could be, a number indicated they find the aircraft to be a sanctuary free from interruptions.

 

Jim Rice adds to the point, “Where else but in a business aircraft can you get an investor or potential customer captive, one-on-one?”  What are they going to do, step outside?

 

Time for Business Aviation

“We are not experiencing an information revolution – it is a communications revolution.  That communications revolution has dramatically accelerated the pace of business.  The result has been to aggressively increase the need for people to be face to face.  That requirement will never be replaced.  We have only scratched the surface with how we can effectively use business aviation to accelerate and support economic development,” says Jack Olcott, president of the National Business Aviation Association.

 

“We used to say that business opportunities lie in the small, out-of-the-way places in the heartland ofAmerica.  Now they also lie in small, out-of-the-way places in Latin America, Asia, and Eastern Europe.  It could take you a week to get to and from some of these spots on the airlines.  Senior executives simply wouldn’t go there if they could not get in and out quickly and safely,” indicates Barents.

 

And your options for getting there are not getting any better.  Olcott points out, “The airlines expect to double their passenger count over the next twenty years.  Increased crowding, larger aircraft, greater congestion.”

 

All of these factors have brought us to a point where there is unprecedented demand for business aviation products and services.  That demand has grown dramatically.  Some of that growth has been spurred by the competition for a scarce resource: the best and brightest people.

 

“Given the wealth that has been created over the past 15 years, people have a lot of choices.  There is a premium on high caliber people.  With business aircraft you have an edge in that competition.  They recognize the aircraft is a tool that can improve the quality of their business and personal worlds. That is a powerful additional benefit with which to attract and keep top people,” suggests Graff.

“I know of no other product that can do as much to change your life than a business aircraft.  They say you cannot buy time.  I can tell you a business aircraft can give you many hours that would otherwise be lost on any other mode of travel.  That does not even begin to address the issues of stress reduction and other key benefits,” continues Graff.

 

Time Out

“Often, the personal benefit of using business aircraft is not felt as strongly by the individual traveler as it is the people around him or her.  Spouse, children, friends, and the community,” comments Keating.

 

“Most busy executives know that without getting away from their jobs, even for a few days, they cannot perform at peak levels.  More and more we see busy executives travelling with small children or older parents using business aircraft as a convenient tool to pull off a relaxing three-day weekend.  Eliminating the nightmare that commercial travel can represent – especially travelling with kids – has become a part of the rationale for chartering or buying corporate aircraft.  And at the pace everyone keeps today most busy executives know that they need quality time away from work – or they simply cannot perform day in and day out at their peak,” observes Wayfarer’s Christiansen.

 

“The time is right for business aviation as a tool.  The first wave of popularity was driven by the economic benefits of aircraft as investments.  In the late ‘70s the blend of high rates of inflation, the Investment Tax Credit, and aggressive depreciation allowances made the ownership of business aircraft an attractive investment.  That ebbed with basic changes in those factors during the ‘80s and was reinforced by many stockholders reaction to some executives’ highly publicized excesses.  Then, long before the economy turned, the number of companies with flight departments began to grow.  That was counter to the then recessionary economy,” says Olcott.

 

In spite of all this, there are some executives and businesses that have not embraced the business aviation tool.  Why not?  Some simply do not need it.  Others have the need but also have business or cultural barriers that prohibit the use of business aviation.  And some “just don’t get it.”

 

I recently asked a corporate president why some managers avoid the effective use of business aircraft.  “The Business Aviation tool has come of age.  There are some executives who have not,” he responded.  But there certainly are a lot more who have.

Tool Time (sorry, Tim)

The business aviation time tool kit has never been more flexible or complete than it is today.  Your choices range from a variety of helicopters and light aircraft that are great for local area and regional travel to long range aircraft capable of taking a team of people 6,500 miles non-stop with a self-contained work, rest, and refreshment environment that affords the flexibility and security not available in developing public transportation arenas.

 

No matter what the choice, there is one common thread among all of today’s business aircraft.  Through improved technology, design, and manufacturing methods they continue to get more efficient, comfortable, and durable.  Typical dispatch reliability exceeds 97%.  Compare that to your experience on the airlines.

 

In the near future, the options will be even greater.  Agusta Boeing is bringing to market a tilt rotor aircraft capable of landing like a helicopter yet able to achieve turbo-prop speeds and altitudes for improved efficiency and time savings.

 

Dassault believes there is a need for a supersonic business aircraft.  “Supersonic business jet technology exists.  The environmental issues must be satisfied.  Yet the value of flying at two to three times the speed of today’s business aircraft and airliners must not be underestimated.  And the advantages of flying at higher (above congestion, headwinds, etc.) make the benefit side of the equation compelling,” reports Rosanvallon.

 

Sources of business aviation services continue to expand as well.  Charter aircraft operations are at an all time high.  Corporate ownership or lease of aircraft continues to grow, too.  Whether you choose to operate the aircraft internally or outsource the operation of your aircraft through a management company, the application of dedicated aircraft remains the most frequent style of business aircraft use.

 

However, this too is changing.  “Most people and companies cannot afford a business jet.  A fractional share of ownership allows a cost effective way to use business aircraft to meet their demands of their business on their own time,” says Santulli.

 

“Over the past fifty years the ownership of business aircraft has swelled to about 7,000 companies in the US.  During the past ten years alone fractional ownership has brought in about 5,000 owners.  90% of them have never before owned a business aircraft.  The demand for what business aircraft produce is higher than ever before.  Larger and more efficient aircraft are producing that elusive result… more for less,” he concludes.

 

“Fractional share ownership gives companies the opportunity to see how it works.  They can experiment with how they can use the aircraft to enhance the effective conduct of the business,” adds Boeing Business Jets president, Borge Boeskov.

 

Jack Olcott observes, “Today’s market honors productivity of a company’s most important assets; people and time.”

 

John Quarles is the retired Chairman of Wolverine Tube, a Huntsville, Alabama-based manufacturer of copper and copper alloy products.  John believed in people, quality, and efficiency.  Their production facilities are spread around North America in communities likeDecatur,Alabama;London,Canada;Shawnee,Oklahoma; andGreenville,Mississippi.

 

After thoroughly studying the benefits and costs of their options, Wolverine Tube put a light jet into service to help their people with their grueling travel schedules.  John’s report of the results, “It’s one of the best business decisions I ever made.”

 

Do you have time enough not to use business aviation?

 


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