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What business is your Business Aviation in?

Posted on: September 29th, 2012 by Pete Agur

What business is your Business Aviation in?

By Peter v. Agur, Jr.

Founder, The VanAllen Group, Inc.

 

 

The President has repeatedly referred, with distain, to “Fat Cats and their private jets”.   In an effort to counter that misrepresentation, the National Business Aviation Association (NBAA) has described Business Aviation as an egalitarian tool – graphically indicating 78% of passengers are not top management.  I expect your Business Aviation service fit neither of these descriptions.  So, from the Board’s perspective, what business is your Business Aviation service in?  Your answer comes in four parts.

 

The first answer has to do with Business Aviation’s job description for your company.  Specifically, how do you want Business Aviation services to help your enterprise succeed?  There are two arenas in which Business Aviation can create its greatest impact for your company:

  1. Strategic trips – A Strategic trip takes key people to meetings where new deals are done or major threats are addressed.  The value of those meetings can be measured in multiples of the full cost of the travel mode.  Positioning your key people effectively is at the core of Strategic trip performance.  The aircraft is acting like a fire truck delivering firemen to the scene of the emergency.
  2. Operational trips – An Operational trip has high cost benefit as compared to your commercial alternatives.  On Operational trips, the incremental cost of operating the aircraft is less than the blend of airfare and time costs on the airlines.  The focus is cost benefit.  The aircraft is like a mail truck transporting the mail carrier as he or she delivers the mail.

 

The greatest impact Business Aviation can make is by supporting Strategic trips.  A few years ago I was talking with the CEO of a large company who was buying his first airplane.  He asked how he could be certain it achieved its highest and best use.  I described to him the Strategic versus Operational use model.  He said, “Using those definitions, every trip our top management team takes is Strategic.  Therefore, I want my top executives to use the airplane as much as possible.”  That perspective is shared by many business leaders.

 

On the other hand, some companies work hard to nurture an egalitarian culture.  With that in mind, many of them design their Business Aviation services accordingly.  A number of companies have established part-time or full-time shuttle runs on the company airplane to connect frequently travelled routes that are not well served commercially.  The cost and time benefits of shuttle services routinely creates substantial savings over the best negotiated airline airfares.

 

It is tempting to assume that when your Strategic-focused aircraft is not on a trip, it could be saving the company money by doing Operational trips.  But those savings would be more than offset if your company fire truck was out delivering mail when a fire broke out.  Consider that a fire truck creates value by being available, ready to respond.  That is a value created by a Strategic airplane, too.  The occasional Operational trip might be better filled by elastic Business Aviation resources like charter or fractional aircraft.

 

The second element:  If you ask most Business Aviation professionals (i.e., manager, pilot, technician or scheduler) what business they are in, most will say, “Business Aviation.”  From the Board’s perspective, that is not good enough.  It is a commoditized answer that does not connect your Business Aviation service to the strategic intent or operations of its customer – your company and its leaders.

 

The much better answer is, “We are in the XYZ business, and our role at XYZ is to provide Business Aviation service that allows the enterprise to compete more successfully.  We do that by…”  Any aviation professional that has his or her head and heart aligned in this manner will be much more effective for the company than someone who is merely focused on making landings equal takeoffs.  Therefore, the second answer to “What business is your Business Aviation service in?” is; your business.

 

The third element of what business your Business Aviation service is in is both subtle and powerful.  Your Business Aviation services are an extension of your company.  Your aircraft and crew are the first point of contact with many customers, shareholders and other key corporate constituents.  In other words, the aircraft and its crew are your ambassadors.  And even if you want to maintain a low profile, they still represent your company wherever they go.  With that in mind, their appearance and behaviors must to be supportive of the ambassadorial role the Board defines for them.

 

Lastly, as your ambassadors, the policies and practices the Board establishes for your Business Aviation service must preserve and protect your brand.  The Board should review and ratify Business Aviation policies that address personal use; local, state, federal and international taxation issues; and community noise abatement rules, to name only a few sensitive areas.

 

In the end, the Board has a clear and high responsibility for defining what business your Business Aviation service is in.  Otherwise, you run a higher risk of being branded a Fat Cat.

 

 

 

Peter v. Agur Jr. is managing director and founder of The VanAllen Group, a management consulting firm to Business Aviation with expertise in safety, aircraft acquisitions, and leader selection and development.  A member of the Flight Safety Foundation’s Corporate Advisory Committee and the NBAA’s Corporate Aviation Managers Committee (emeritus), he has an MBA, an airline transport pilot certificate and is an NBAA Certified Aviation Manager.  www.VanAllen.com.

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Most companies allow their business aircraft services to be used for humanitarian missions.  Whether it is for the Corporate Angel Network (or others like it) or hurricane, tornado, or earthquake relief, Business Aviation services are used every day to support others.  Yet, most companies avoid public exposure for their Good Samaritan acts.  The reasons for keeping a low public profile for such generosity ranges from simply wanting to remain anonymous to fearing a flood of requests.  The problem you create by not allowing these activities to be part of your brand is you are not accruing good will, as it relates to Business Aviation services.  That good will establishes a basis for dialogue if and when you are publicly challenged about your Business Aviation services.  I contend you should deliberately roll your Business Aviation services into your brand strategy.

 

 

In Closing

Anyone who has bought a car, or an airplane, realizes there are often overriding intangible components in making the final decision.  Since there are numerous “buyers” (financial, user, operator, etc.) in the aircraft services selection process, the intangible side has some nuances that can have critical influences on the end decision.  Considering your culture and brand can make that decision even better.

 

 

Peter v. Agur Jr. is managing director and founder of The VanAllen Group, a management consulting firm to business aviation with expertise in safety, aircraft acquisitions, and leader selection and development.  A member of the Flight Safety Foundation’s Corporate Advisory Committee and the NBAA’s Corporate Aviation Managers Committee (emeritus), he has an MBA, an airline transport pilot certificate and is an NBAA Certified Aviation Manager.  www.VanAllen.com.

 


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