The project, management, staffing and training in all aspects in the decisions to purchasing an aircraft.
The overall concept of management, setup, operation, aircraft acquisition of a flight department. The categories below demonstrate the elements that are the basis of any flight department which are done.
Management and Control
The principal function is to provide operational and administrative information to department personnel and serve as a communication tool that transmit aviation department goals, policies and procedures to the company. To maximize the flexibility and versatility of an aircraft, clear lines of communication and authority need to be established regarding its operation. Personnel authorized to utilize the aircraft are clearly defined. The procedures for routing, approving and paying the aviation department bills must be carefully delineated.
As for the organizational structure of a flight department, the chief pilot reports to the transportation, sales, or other major department in some companies. However, most flight department managers firmly believe that by reporting directly to a high-level executive - a senior vice president, president, or chairman of the board - the bureaucracy is bypassed, and therefore the aviation department runs smoothly.
Staffing and Training
Staffing of the aviation department is a joint effort of the company personnel and the aviation department manager. The personnel department possesses the expertise necessary to ensure compliance with federal and state employment regulation and conformity with company standards. The aviation manager has personal knowledge of the unique requirements relating to the Federal Aviation Administration’s (FAA) requirements and aviation skill.
The ability of the department to operate in a safe, efficient, and economical manner will depend upon its employees. The number of personnel and job functions needed depends upon the complexity of the company’s operation.
Two pilots must legally operate the majority of aircraft in the class that you are looking at. The availability of a third pilot relieves the scheduling pressures caused by vacations, illnesses and training requirements. For aircraft operators that fly internationally, the third aviator may be necessary on extended trips. Alternatively, some flight departments, especially those at airports where qualified aviators are available, use the services of contract airmen as necessary.
Many flight departments consider a knowledgeable scheduler/dispatcher integral to their operations, but in one form or another, this function exists in all flight departments.
Setting Up Shop
In addition to renting or building a hangar large enough to accommodate your aircraft, you need space for flight department offices. Aircrews have many aviation-related responsibilities besides flying aircraft. The amount of office and lounge space needed is dictated by how many flight department employees you have. Regardless of size, flight department offices are just an extension of your company's downtown office and should be outfitted with the usual office equipment: desks, chairs, phone, answering machine, fax, computer, storage cabinets, etc. This is a function of the person who will be responsible for the administrative management of the aircraft.
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Documentation and Support Services
The most important document in a flight department is the operations manual, which should explicitly state lines of corporate authority, administrative processes, personnel procedures, all standard procedures and emergency plans regarding operation of the company aircraft. The flight department "bible" should spell out standard operating procedures and contingency plans, as well as basic operating procedures and guidelines. Other essential flight department documents include aircraft logs, passenger and employee data and scheduling sheets, maintenance forms and tax reports. Much of this paperwork can be simplified and automated through the use of commercially available computer software programs.
In addition, you may want to subscribe to the growing number of on-line computer services, which are sources of weather, flight planning and other information on business aviation. It is important to have a travel reference library in the flight department as well - flight manuals, applicable regulations, an atlas, almanac and hotel guide - to help plan trips. Flight departments need to subscribe to aviation navigation chart services, also consider a cleaning service to keep your office, hangar and aircraft presentable.
An increasingly popular way to make maintenance costs more predictable is for aircraft operators to enroll in one of the fixed-cost maintenance programs being offered by airframe, engine and avionics manufacturers. By paying an annual fee that covers the upkeep of major aircraft systems for a specified number of flight hours, operators can avoid the large expenditures associated with overhauling or performing major maintenance on an engine or other primary aircraft system.
The most expensive support service is insurance. The purchase of insurance protection against financial loss resulting from aircraft and/or airport operations accidents is a decision that the individual operator must make after thorough discussion and investigation of insurance coverage’s available. The basic coverages are physical damage to the aircraft (hull insurance), aircraft liability and airport liability (premises insurance).
Choosing a Home Base
Proximity to facilities is a primary factor in deciding where to establish a flight department. A rule of thumb is to base the aircraft at an airport that is no more than 30 to 45 minutes driving time for passengers and flight department employees alike.
The keys to unrestricted access and the ability to fly in and out of a field unimpeded at an airport are:
- Availability of sufficiently long runways for your type of aircraft in all weather conditions.
- 24-hour access to Air Traffic Control (ATC) services
- Availability of precision instrument landing systems (which will allow flying in less than ideal weather).
- Absence of airport or local roadway congestion or aircraft operating restrictions, such as curfews or noise limits.
Although airport access is important, there are other factors to consider:
- The quality of airport security
- The ability to connect with airline flights
- The availability of customs services
- The accessibility of aircraft parts
- The cost of landing fees, state and local taxes, and other miscellaneous operating charges
Aircraft noise regulations, which vary from airport to airport, can be a serious impediment to aircraft operations if you plan to schedule many early morning departures or late evening arrivals at your home airport
There are two major financial considerations in choosing an airport:
- Getting a low-cost lease on ground facilities
- Having the ability to procure fuel at attractive prices.
Obtaining a good lease on hangar and office space, as well as getting a discount fuel contract from an FBO (Fixed Base Operation) can yield significant savings for your operation.
If you do choose to buy an aircraft, it is important to consider its operating, as well as acquisition costs. You may want to consider several options, such as buying the aircraft and obtaining a Federal Aviation Regulation (FAR) Part 135-charter Certificate so your aircraft can generate revenue when you are not using it. Making your aircraft available for charter can help defray the cost of ownership, but there are also added costs and requirements associated with being a charter operator.
Utilizing an aircraft management firm is appropriate for those that want to purchase and use a business aircraft but do not want to assume the day-to-day responsibilities of operating it. For a fee, aircraft management companies perform operational duties associated with flying a firm's aircraft, including all requisite support services, from pilots to maintenance.
Another purchase arrangement is joint ownership, a contract under which one or more owners share the use of an aircraft to satisfy their air transportation requirements.
An aircraft is a piece of capital equipment, so the tax consequences of owning or leasing an aircraft must be taken into account when calculating the total cost of flying an aircraft, whether to justify ownership or simply to charge back company divisions for the aircraft's use. You should review the possible tax advantages of depreciating an aircraft, whether you own all or merely an interest in an aircraft. All forms of ownership, whether 100 percent, fractional or joint, are subject to the IRS rules related to depreciation. This is a decision that should be considered with your financial advisors. Aviation Consultant Corp. does not offer any advice or opinions in these areas.
Finally, the primary users of the company aircraft should take several demonstration rides on real trips to make sure that the aircraft actually fits their needs.
When engaged to acquire an aircraft, the entire process usually takes from 60 to 90 days. The development of the mission profile and the narrowing of categories to accomplish this mission (taking into consideration budget and other key criteria) usually take from one to three weeks. Then, the search for the specific make/model aircraft begins and typically takes from one day to 45 days.
While developing and beginning the search, one suggestion that is made to the client is to start securing financing commensurate with the acquisition mission. This puts you in place to move immediately when the correct plane is located. The pre-buy inspection can take approximately 15 to 21 days, with corrective action taking an equal amount of time. Typically the aircraft is closed within 7 days following completion of any corrective action required for compliance with the terms of the contract. The purchase agreement should be completed prior to starting the pre-buy inspection, thereby alleviating any unnecessary conflicts later in the transaction. If paint and interior is required after the purchase, you should plan on an additional 6-8 weeks for this to be completed. Avionics modifications can be coordinated during his phase to reduce additional down time.