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Business Aviation Makes Financial Sense

Aviation advocates can utilize studies that demonstrate that business aviation is good for a company's bottom line.

Jan. 15, 2018

Those who use business aviation can easily articulate the reasons why they utilize general aviation aircraft to support their enterprises. But skeptics – which may include shareholders, or those inside the company who are not the direct beneficiaries of the efficiencies afforded by business flying – may need more proof.

The costs of buying and flying an aircraft are always a top concern for naysayers. Operating and acquisition costs are readily available from a variety of sources, but it is sometimes challenging to quantify the financial benefits of business aircraft use. How do you quantify the value of having sales, marketing or support teams travel as quickly as possible to meet customers’ needs? What is the value of meeting face-to-face with a customer before the competition gets there to close a multi-million-dollar deal?

When the value of a company aircraft is questioned, it behooves aviation managers to not only ensure that on-demand air transportation is being delivered in a safe and excellent manner, but that company managers and other internal constituencies are made cognizant of the value of that service. While there are usually one of two champions of the flight department in any given company, there may be people in positions of power who are not sure that business aviation is worth the substantial investment required.

WAYS TO DEFINE VALUE

Michael J. Dyment, founder and managing partner of Washington, D.C.-based NEXA Capital Partners, LLC, asserts, “The flight department does not always connect with key company personnel to promote its value to the organization. Flight department personnel should not hide their activities; let the company know what the department can do.”

Nel Stubbs, vice president and co-owner of Conklin & deDecker, recommends quantifying the value of business aviation whenever possible. “Show them the numbers and accomplishments. These aren’t just dollars, miles flown, etc. Show them what the aircraft has done for the company in terms of completed trips, deals done, contacts made and time saved. Prove your worth.”

Pete Agur, chairman and founder of The VanAllen Group, suggests emphasizing the value of time: “Time is the greatest challenge for those who are moving the company forward. Also, the need to be face-to-face carries great weight in the business world. In any given organization, someone must be the advocate for the concepts of time savings and opportunities created.”

MAKING THE CASE, BUILDING RELATIONSHIPS

Within companies, those promoting business aviation value must be provided with information to support that effort. Periodic compilations of flight destinations reached and opportunities pursued should be provided to management. Ideally, a brief monthly or quarterly meeting between the aviation manager and one or more decision-makers will enable the aviation manager to make the case for the company aircraft and answer any questions or address concerns.

For the flight department to succeed, it must actively support the company’s mission and objectives. Business aircraft use must play an integral part in helping achieve company goals. Therefore, aviation personnel need to stay attuned to what goes on “downtown.” This mutual understanding can be promoted through personal contacts or, as suggested above, regular meetings with key company decision-makers.

Flight department personnel should not hide their activities; let the company know what the department can do.
– MICHAEL J. DYMENT Founder and Managing Partner, NEXA Capital Partners, LLC

Jim Cannon, principal consultant at Sundog Aviation, states, “All hands in the flight department must understand the mission and purpose of the flight department and the company. The merger of these two entities makes the difference between good and excellent flight departments.”

Demonstrating the value of the aviation operation does not necessarily require formal presentations or detailed reports. Sometimes it simply involves reminding other company departments of what the aviation operation has done lately. Continuing communications with all levels of the company regarding business flying activities can create a bond between the aviation operation and other departments. It is particularly important to keep the finance and human resources departments, among others, informed about the successes of the aviation operation.

Business aviation has proved itself many times over as a safe, efficient and effective business tool. However, flight department leaders must not only demonstrate that, but remind others of business aviation’s value on an ongoing basis.

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S&P 500 COMPANIES THAT FLY, THRIVE

Need some external statistics to back up your assertion that using business aviation is good for your company? Check out the latest in a series of studies conducted by NEXA Advisors – “Business Aviation and Top Performing Companies 2017 – S&P 500 Companies: Using Business Aircraft to Create Enterprise Value.”

The report states, “Business aircraft leverage key employee productivity, accelerate transactional closings and boost customer interaction.” Here are just a few of the numbers that led to that conclusion:

  • Some 88 percent of S&P 500 companies use business aviation to support their activities.
  • S&P 500 business aviation users financially outperformed non-users by about 70 percent over the past five years.
  • All of the 100 companies in Forbes magazine’s listing of “100 Most-Trustworthy Companies in America” use business aviation.
  • 98 percent of the top 50 firms among the “World’s Most Admired Companies,” a list of the global top companies by reputation, compiled by Fortune magazine, are business aircraft operators.
  • 95 percent of the “Change the World Top 20,” as rated by Fortune magazine, fly business aircraft.
  • 95 percent of the top 100 companies in Forbes magazine’s listing of “100 Best Places to Work” are business aircraft operators.
  • 92 percent of the 100 Best Corporate Citizens, according to the CRO 2017 ranking, use business aviation.

Michael Dyment, NEXA Advisors founder and managing partner, notes, “The growth in business aviation... in recent years is not surprising. The 34-percent increase in business aircraft operations over the past five years, and an estimated doubling of flight hours over the next 20 years, confirms that top companies increasingly realize the undeniable advantages provided by business aircraft.”

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This article originally appeared in the January/February 2018 issue of Business Aviation Insider. Download the magazine app for iOS and Android tablets and smartphones.