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Declaration of Business Aviation Intent

Posted on: January 8th, 2013 by Pete Agur

We received an interesting call two weeks after the Presidential election.  An entrepreneur was seeking our assistance in the start-up his aviation department.  We asked him why he was taking this step now, considering the uncertainty of the economic and political environments.  His response said it all: He had just received a large infusion of cash by an investor to dramatically grow his company.  It was the investor who told him, for the sake of the success of the business, he needed a business jet.

 

In other words, his financial angel told him spread his wings.  The investor’s statement of intent for Business Aviation was loud and clear: The long term success of their enterprise will be reliant upon the impact of their leaders.  That impact is created by the time and place mobility of key people that only Business Aviation provides.  Any other option sub-optimizes their investment resulting in a lesser rate of return.  And to be very clear, the Business Aviation rate of return far outstrips the marginal cost difference between using Business Aviation versus any other option.

 

Despite its obvious benefits and impact, Business Aviation remains an easy target for corporate gadflies and muckraking pundits. Why?  I believe there are two parts to the answer.

 

The first is the benefits of Business Aviation are not obvious to most critics.  I have seen numerous financial managers who were adamantly opposed to their company’s investment in Business Aviation.  Very few of them were direct customers of Business Aviation.  I have then been witness to their metamorphosis into raving fans shortly after they became authorized users.  This dramatic shift in attitude occurred as a result of their change of perspective from cost managers to strategic leaders with a greater focus on growth and revenues.  But then again, the power of their personal experience of the time savings and productivity improvements might have had something to do with it, too.

 

The second reason for Business Aviation being a hot target is engendered by the policy most companies have about not speaking about it openly.  The common wisdom within corporate America is to not talk, publicly or internally, about Business Aviation investments and practices.  I have heard executives say they don’t want unions or the rank and file to become hypersensitive to what could appear to be executive perks.  Others are more diplomatic as they voice concerns about airplanes being used by senior executives as being in conflict with their core corporate belief of egalitarianism.  To both groups I say: “Bunk!”  Ducking the issue makes it an even bigger issue in the minds of the people you are trying to placate.

 

Give your rank and file more credit for being bright enough to understand how your business works.  Years ago I had a GM union steward tell me he was glad his company had jets.  His point was perfect, “The more trips our top executives take the more deals they make.  That means we can build more cars and trucks.”  He understood what politicians years later did not: Business Aviation is a lever for the success of the entire enterprise.  It is not an expensive perk for the privileged few.

 

After all, business is not a sport conducted on a level playing among perfectly matched peers.  It is a competition for markets, customers, and resources.  Your advantage is created and maintained by presenting ideas and solutions where they are needed, when they are needed.  The winner is often the enterprise who gets there first with the right people to do the right things.  That is no social commentary.  It is a statement of a business reality.

 

Many senior management teams waste valuable and energy addressing and readdressing questions about Business Aviation.  It is the role of the Board to bring that practice to a halt by declaring the enterprises’ Business Aviation intent:  “We have directed the company to use Business Aviation to achieve competitive advantages that are critical to our enterprises’ success.  Business Aviation services and resources will be used in a manner that is well within the standards of our core business.”

 

Oversight of the use of Business Aviation is often at the C-suite level.  If there is any concern that this positioning could be interpreted by critical constituents as “the fox watching the hen house” it would make sense for a member of the Board to be appointed to an oversight role.  That Board member could then confirm all Business Aviation policies, practices and uses are clearly on the “whiter side of gray”.  The Board, by taking these aggressive proactive measures, can preempt public and internal concerns about the inappropriate or unethical application of Business Aviation services.

 

In the end, Business Aviation is not about perks or extravagance.  It is all about people.  It is about getting the right people to the right place at the right time to do the right things.  Anything less is an expensive compromise.


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