Expense Versus Efficiency
by Jay Mesinger
would argue the fact that business aviation is expensive.
After all, even buying an entire row of first class seats to
ensure adequate room and privacy is cheaper than most
business aviation legs. Having established that fact, letís
move on to a less obvious fact: business aviation can
actually be efficient.
excuse to run an inefficient operation, thinking no one is
paying attention. In fact, in my 33 years of buying and
selling business aircraft, Iíve noticed people paying more
attention to costs than ever. Itís time to switch the
watchful eyes of corporate to efficiencies. Our entire
future is going to be based on efficiency, and it's clear
that most costs wonít go down, so efficiency must go up for
our industry to survive.
never cost more and I doubt weíll ever be able to say again
that we will use a per gallon cost of less than $2.00. I
must admit, while looking back over Conklin & de Decker cost
summaries, I didnít have to go back very far in time to find
that amount used regularly. The hourly cost of labor has
increased as well as the cost of salaries and wages, hangar
usage, and insurance. In fact, every cost associated with
the operation of business aircraft has gone up.
costs we can see, but how about the unseen costs of far more
onerous personal tax laws or the impending User Fee costs?
This all makes owner and operatorís heads swim. ĎWhat is one
to do,í you ask? Create efficiencies!
you that you canít find a corresponding efficiency for every
cost increase, but you can make significant differences to
the bottom line by being relentless in the pursuit of
efficiency. Iíll take the balance of this piece to point out
several that will be considered Ďthe low hanging efficiency
efficiencies come with a price tag. What looks at first like
a cost, however, will bear the efficiency fruit of which I
spoke. Even small, one aircraft operations can develop
efficiencies that will sooner, rather than later, reduce
One of the
worst inefficiencies is the one plane, one pilot operation.
Management feels that rather than hiring two pilots, they
can shift the entire burden of the department to the one
pilot. He or she can fly the plane, schedule maintenance,
clean up after the flight, report correctly and timely to
the maintenance shop and of course be responsible for the
cost reportingÖ oh, and they can also manage a group of
pick-up pilots to always be ready when the boss says, "letís
go in an hour." Any one recognize that department?
should that department be ranked as one of the most
inefficient, it should also probably be ranked in the
Ďunsafeí category as well. Itís unreasonable for anyone to
think this is really saving money, by cutting back to one
skilled, trained flight professional. I assure you that
having that second pilot on salary and on duty to offer
critical assistance not only in the cockpit, but also on the
ground, will save money and ensure a safer, more efficient
As long as
weíre talking about adding staff, letís add one more person
in the name of efficiency - a mechanic. This addition will
add efficiency in the form of higher dispatch reliability,
lower maintenance costs, increased safety and overall smooth
department operation. This addition can be on the ground
scheduling pop-up maintenance while the crew is reporting
the problem from afar. So, for instance, when the plane
arrives at the service center for repair, the mechanic has
the needed parts and support waiting. The down time is
diminished, the costs are controlled because of more direct
management of the repairs and the plane is back in the air
where it belongs. The right people in these positions can
easily pay their own way within any given year of
will never go down dramatically, however, there is no reason
to pay more for less. Forget the lure of top choice steaks
or fancier crew cars. Today the vigilant crew should be out
ahead of every trip, building their own database of
fuel-saving locations, and extending the home base savings
through relationships forged from time spent between trips
to locate and secure top choice fuel prices. Discounts do
exist but are not always waving flags to get your attention.
reviews of fixed expenses are also vital in todayís
inefficient world. Be sure your insurance provider is a
partner in developing coverage that is both correct for the
asset and operation, and also cost sensitive. Be sure that
as you approach renewal you get the agent out to your
operation and discuss the type of annual use. Be sure there
are not better offerings or bundled products in your agents
bag of offerings.
should be reviewed annually as well like hangar, training,
and benefit costs. It may seem silly, but when was the last
time you looked at the cost to have the two, three or 20
cell phones used by your department? Prices of cell phone
contracts are tumbling. Remember, if youíre not looking at
every cost associated with your operation, youíre not
managing as well as you could and not finding the
efficiencies that collectively can make a difference in the
bottom line of your operation.
never be judged on not making your flight legs as cheap as
even the entire row of first class, but you should and will
be judged on making your operation as efficient as it can be
in a time of escalating costs.
your head in the sand on this one. Raise it high, be visible
to corporate, and be extremely proud of the work you are
doing to bring efficiencies not only to your departmentís
bottom line, but also to the entire companyís bottom line.
The idea of delivering your companyís corporate culture to
the clientís doorstep ahead of the competition is what you
are all about. Delivering it there ahead of the competition
at a lower cost due to efficiencies is even sweeter.
Jay Mesinger is the CEO of J. Mesinger Corporate
Jet Sales, Inc. He is on the NBAA Board of Directors
and is Vice Chairman of the AMAC. Additionally, he
served on the Duncan Aviation Customer Advisory
Board for two terms, is a member of MEBAA, EBAA
and is associated with IBAC.