In my company’s employee handbook, we address the use of the company-provided computers: “Computers, computer files, the email system, instant messaging and software furnished to employees are Company property intended for business use. Limited personal use is allowed as long as it is not disruptive to business operations.” We go on to address the fact that all files on the computer are company property. It is simple and clear. While the cost of a computer is less than $2,000, they are ubiquitous in most companies. The total IT budget for computers in a large company is significant. The number of business aircraft in a company is quite few, but the total spend is also quite significant. Is there a business aircraft use policy?
Whether the business aircraft us used by a few senior executives, or whether company employees can book seats on the corporate shuttle, the reasons for and the use of the business aircraft should be clear: if only to prevent the appearance of misuse or of the business aircraft not being a legitimate business tool.
Few companies escaped financial hardships in the past recession. One client had a light jet they used for senior executive travel. They had no clear policy for the use of the jet, but did have scheduling authority spread among a few senior executives. In the light of recent layoffs, everyone was very conscious of spending money. There were misgivings about the use of the business jet by some members on the board of directors. The board needed to know the aircraft was being used effectively.
My study looked at the costs of the business aircraft and the alternatives. Their operating locations were many, and neither driving nor scheduled airlines adequately served their transportation needs. They had a variable operating cost chargeback that was billed to the business unit who used the aircraft. Their operation was well run, minimally staffed, and costs were managed quite well. The executives who primarily used the aircraft we conscious of the appearance of using the aircraft, and were comfortable in being able to justify their trips. My study concluded that the use of the business aircraft was in the furtherance of the company mission. What was missing was not cost controls, effective management, but a clear set of guidelines of who can use the jet and for what reasons.
My client had unwritten policies, and a short list of executives who could authorize the use of the aircraft. 90% of the travel was by the CEO and his management team. All of their trips were to company operating locations. My report was helpful in showing the cost-effectiveness of the business aircraft. What were needed were a couple pages with the CEO’s authorizing signature stating the scheduling and use policies for the aircraft. That was really what the board needed to see. I think it would have also been good internal PR for the employees to see the aircraft use policy as well.
Misuse of business aircraft and the cost to the shareholders makes for tantalizing reading in business newspapers and is used for political fodder. The vast majority of business aircraft use is for the furtherance of the business. “Dog bites man” is not news, as is “business aircraft vital to company’s growth.” These articles fuel the mistrust of the business aircraft by the uninformed.
Studies by Anderson Consulting and more recently, by NEXA, showed the correlation between business aircraft use and shareholder value. Executives, including CFOs, reported that the loss of the business aircraft could potentially harm the company’s value or hurt its ability to compete.
Secrecy is necessary when developing new technologies and new products. It is harmful when it obfuscates the use of an important business tool. Business aircraft are a high profile cost item. If 100,000 employees misuse their company computer, the total dollars lost to the company in terms of expenses and lost productivity can be significant. But is the trip to Washington DC by a handful of auto executives that generated the news. Clearly stated business aircraft use policies being handed over the press or Congress is far better than silence.
A business aircraft use policy is a useful tool for the users of the aircraft. What should the use policy address?
* Who authorizes the use of the aircraft?
* For what reasons can the aircraft be used?
* Who can fly onboard?
* What justification is needed?
* Are their priorities in deciding schedule conflicts?
* Are there costs charged to the business unit for using the aircraft?
Who and when and what justification is needed for each trip needs to be clearly spelled out. Any significant business tool, or process, has its procedures. The aircraft use needs to be backed up with the documentation so that the board, CFO, or other executive can maintain oversight. This is also helpful to the board in being able to provide governance. How can you govern what is unsaid and undocumented?
This article and others were first published on AvBuyer.com