Convincing the CFO to consider Business Aviation
Winged – Dutchman

Convincing the CFO to consider Business Aviation

Aviation journalist Kathryn B. Creedy says linking commercial aviation hassles to business aviation could expand the market.

The No Plane, No Gain campaign seemed to give the industry all it needed to sell business aviation in a world that still thinks it is for fat cats jetting off to Gstaad. Among many other conclusions, the studies showed users are more successful than nonusers, and that government use of business aviation actually saves taxpayers money.

Even so, the understanding of business aviation remains woefully inadequate judging from the headlines that love to stick it to users. Indeed, I question whether anyone in the industry is using these valuable studies to convince chief financial officers to consider business aviation.

A gold mine

Business aviation interests are sitting on a gold mine if they just step back to consider the growing mountain of data about the economic impact of the commercial aviation hassle factor. If they did, they would accomplish what one innovative company – Wheels Up – has set out to do and that is to expand the market.

“Private aviation has been a matter of poaching each other’s customers,” Wheels Up President David Baxt told me during NBAA. “We are expanding the market, democratizing private aviation and driving new people to it.”

Business aviation veterans, however, caution that we live in a cost-conscious world. Do we? Or, are corporations just being penny wise and pound foolish and we don’t know how to convince them otherwise? Do CFOs know the statistics that bizav contributes to the bottom line? Do they know the real cost of commercial airline service? What about those who live off the transportation map?

Out of luck?

In the past two decades, more than 400 communities have lost commercial air service in the US and, astonishingly, 200 have been lost since 2013. New pilot training regulations mean the further erosion of air service – which is expected to reach crisis proportions within the next few years. That is a lot of people out of luck.

Consider this:

The out-and-back-in-one-day business trip is a thing of the past, except with business aviation. Traversing a hub to get to your destination adds three to five hours to the length of a business trip.

De-hubbing has more than halved the non-stop destinations at major airports and municipal officials are desperately looking for solutions.

Hubs are designed for inter-regional travel, leaving intra-regional flights unaddressed.

A regional airline flight is almost three times as likely to be canceled than a major airline flight. Weather and air traffic congestion conspire in the cancellation of 69% of regional jet cancellations. For major airlines, the cause relates to mechanical or crew problems.

The Department of Transportation has been searching for solutions to the loss of air service and mentioned contracting with air taxi companies as a solution.

At the beginning of the aviation industry, passengers had a saying: If you have time to spare, go by air. Today, the old adage still rings true, creating a huge opportunity for business aviation. Business travelers know they don’t have to time to mess around with inefficient travel systems. But do CFOs know that?

Teaching the C-suite – and ourselves

The industry can do more to educate the C-Suite. Potential users may wring their hands about how to eke more productivity out of employees, but they don’t think of travel productivity because they are tied to the corporate travel industry. These and other factors suggest that we should not let cost consciousness become a barrier to our education efforts.

The problem is few in the business aviation community know anything about the commercial aviation aside from what they see as a passenger. They assume that because of the higher costs of business aviation, most passengers won’t even consider it.

They are right and wrong at the same time.

They don’t know about the compelling narrative that can be created by linking the hassle factor and the ease of business aviation. Viscerally, we know about the pain of commercial airline travel, but have we quantified it? I have.

Do the math

Having spent my career covering both commercial and business aviation, I see the potential of what can be done. I’ve already written that narrative. Strikingly, the cost of delays and cancellations were more than $8.5 billion annually, with nearly one in five kept from completing their trip in 2013. Total air service problems cost the economy $85 billion and $900,000. Imagine if we could help unlock that productivity.

Today’s transportation system is just not set up for business travelers. In 2013, security, fees, crowded flights and terminals and delays and cancellations prompted passengers to eliminate 38 million domestic airline trips – 8% of travel demand.

And what of the future?

We face pre-Thanksgiving congestion at least twice a week at many airports in the next decade. Some airports are already there. These are only a handful of message points that can be used. The question is how to turn these and other statistics into something business aviation interests can use.

Do you know how? I do and this could be the result: At the top of the last business cycle, airline hassles grew business aviation from 16% of all premium business traveler trips to 41%, according to Stanford Transportation Group. At that time – 2007/8 – travelers on business aircraft generated a record 41% of the number of passenger trips as those made by airline first-class, business-class and full-fare coach passengers combined.

While travel industry studies about the cost of inefficient air transportation are designed to goose Congress into funding initiatives such as NexGen, their conclusions amount to valuable additions to the industry’s quiver in its efforts to convince the CFO. With this material, business aviation interests can make companies rethink their corporate travel policies to allow business aviation as the cost gap between business and first class as business aviation narrows and the hassle factor expands.

The time is now

Exploiting the opportunity before us will yield new customers. New business models such as Wheels Up, Surf Air and Jet Suite, are making business aviation more accessible. I think more established business aviation companies, NetJets and the like, and airports need to adopt more pro-active marketing campaigns that target those who do not use business aviation today.

Clearly, much more can be done, and it is up to the marketing and public relations officers to make a real difference. We are now heading to the top of the next business cycle.

Business travelers are looking for alternatives. The time is now.