Thursday, July 03, 2014

Is a corporate plane a status symbol or logistical lifesaver? Both, say local experts: Greenville, South Carolina

The use of private airplanes in business can offer a unique efficiency and productivity tool to companies looking for an advantage in speed and the ability to quickly move company personnel to specific locations. 

And although a recent Wall Street Journal article reported that CEOs of nearly 150 companies enjoyed personal flights at their employers’ expense in 2013, for most companies, air travel provides company executives with the option to visit multiple destinations in a single day while serving as a cost-effective resource for high travel corporations, said Steve Wiley, vice president of aviation accounts at Special Services Corporation.

Of the top 100 companies in the Upstate, at least half of them utilize business airplanes, he said. “Here in this neighborhood, the Citation Series is a favorite because it has short field capabilities to get in and out of the smaller runways.”

Wiley said companies interested in purchasing an airplane for corporate use could find a business jet with ample time left on the motors for approximately $2 million.

The executive business airplane at this range will fly the entire East Coast and seat eight, he said. A standard crew for a typical business plane is two pilots.

Upper echelon companies with an extended budget can purchase a brand new Gulfstream 650 between $40 million and $60 million, Wiley said. Calculating the time put on the airplane and its expected utilization can equate to a reasonable bottom line for large corporations, he said. “When you put all of the factors in order, it can start to make sense.” Businesses without the resources or need for a company aircraft can charter a jet from operations throughout the region, although destination will greatly influence travel costs. Wiley said a day trip from Greenville to New York could cost a company between $10,000 and $12,000.

A similar trip made to a city like Charlotte may only cost $4,000, he said. Moving key people to different locations in a shorter amount of time is also an advantage of business aviation. By using less efficient means of travel such as commercial airlines or driving, Wiley said companies could lose several days of productivity from valued staff members.

The return on investment for companies that place their management teams in a six to eight-seat airplane for an hour can be significant, he said. “If you’re going to meet on Tuesday, you have to leave on Monday to make it on time, and if your meeting runs long, you could miss your flight and extend your time out of the office.”

Although the perception exists that only those with elite status have access to corporate jets, they can be more cost effective than commercial aviation for companies with a need to move senior executives to various locations quickly, said Dave Edwards, president and CEO of Greenville-Spartanburg International Airport.

For most, commercial aviation is a critical component of transportation around the country, he said. “Corporate jets have a very strong place in the business community when used appropriately, and I believe they are nothing more than a business tool to get the job done in the most efficient and effective manner.”

Well-managed aircraft fleets can add significant profitability to a company whose profile benefits from fast and efficient transportation, said Gerald Gaige, commercial pilot and certified flight instructor based at the Greenville Downtown Airport.

Not all companies have air needs, but the effectiveness of private air travel can make business operations possible that would otherwise not be, he said. “Adding air travel efficiencies to a company can improve the bottom line profit.”

Gaige said private jets are used for groups of employees to reduce the per-ticket cost.

A company’s cost analysis must consider a variety of value factors, including personnel time invested, increased business efficiency, convenience of scheduling and increased availability of locations, he said. The cost benefits of business aviation are often hidden from a numbers point of view, but they are obvious to the individuals involved, he added. Dan Hubbard, spokesperson for the National Business Aviation Association, said there are misperceptions about the use of business airplanes, which may lead corporate employees, boards of directors and shareholders to disapprove of them.

When companies make it clear that an airplane is a business tool, not an executive perk, there is a level of understanding that counters these misperceptions, he said. A company should articulate the need for a business airplane, “to justify its use and allow fewer people to do more things in less time.”

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