Here are some insightful tips for achieving greater effectiveness in utilizing Business Aviation.
Business aircraft are valuable tools for advancing the goals of the enterprise. To measure effectiveness and provide oversight, however, there must be policies in place. When crafting those policies, the Board should consider the following perspective: how do you know if the aircraft is being used efficiently? This article offers tips for the senior executives and board members whose company employs business aircraft.
First, there needs to be a document stating how Business Aviation supports the company’s Vision, Mission and Guiding Principles. Ideally, this is part of an overall air transportation aircraft plan for the company that not only offers a rationale for an aircraft, but also offers the analysis for what type(s) of aircraft are being used. An aircraft justification should connect directly to the core mission of the corporation.
What is your company’s mission? How does the use of a business aircraft support that mission? Write it down.
Second, your company should have a written corporate travel policy that includes Business Aviation. It should state who is authorized to use the aircraft and who is authorized to make the aircraft available to those without direct authorization privileges. This document should be in the hands of everyone who has a need to travel. If For example, if the Senior VP of Engineering is authorized to use the business aircraft, that person needs to know the parameters that apply to exercising that authority.
With one client of ours, any C-level executive can authorize the aircraft use by any employee, but they must provide written justification for anyone below Senior VP level. Thus, this corporate travel policy also stresses accountability.
Corporate travel policy should address who has priority for use of the aircraft. Some of our client’s travel policies state that the aircraft’s primary user is the President/CEO. If they are not using the aircraft, then it can be scheduled by any other C-Level executive. In a few other instances, the corporate travel policy states “first come first served” among the authorized users.
Another policy requires a Senior VP or higher to be on board. Once the aircraft is scheduled, however, any employee with a legitimate business travel need can book a seat unless the aircraft trip is specifically blocked by the approving person. Each of these usage policies was develop with supporting the corporate mission in mind.
Corporate travel policy should also address restrictions related to when senior executives travel in groups. Do you want the top four executives in your company all traveling in the same “vehicle” at the same time? I used the word vehicle because I’ve found that travel policies rarely extend to vehicles other than an aircraft, even though business aircraft have a significantly lower accident record than other means of transportation, such as automobiles.
In 2012, we did a survey of corporate flight departments, asking about senior travel restrictions. Among the results:
- 83% of “Fortune 500” respondents (with business aircraft) have some sort of senior executive travel restriction.
- Only one in five of the travel restrictions involved surface vehicles.
- An overwhelming percentage (96%) of those respondents with restrictions, limit the number of senior executives traveling together on the same vehicle.
If such a travel restriction is to be waived, who can do it? A “self-release” may not be the most wise alternative. I also recommend that the policy address all vehicles, not just aircraft.
I have found that the pilots are very “mission focused” and getting the job done is very much in their DNA. But safety is priority One. To support my friends in the cockpit, I strongly recommend a section in the aircraft use policy stating that safety of personnel is primary and that any decision by the pilot in command regarding safety must be accepted by passengers, without exception, and that such a policy is backed up 100% by the President/CEO.
To further strengthen accountability, policy regarding the use of the corporate aircraft must have the President/CEO’s signature.
Lastly, there needs to be tracking and a review of the aircraft use on a regular basis. The market changes, forcing business to adapt and change. We had one client in the tech industry that was awarded earn a very valuable, long-term contract outside the US. The Board decided that the business arrangement, as well as the opportunity for more business in that region, were sufficiently important enough to acquire get an aircraft dedicated to that long-range trip. They updated its aircraft justification and amended their corporate travel policy to address the use of this new aircraft.
Having a documented rationale for aircraft acquisition aircraft justification and tracking and reviewing that guidance on a regular basis are essential elements of Board governance for Business Aviation.