From being just a ‘jewel’ in the corporate crown, business aviation has the untapped potential of being a force multiplier and a game changer as well

For ov er five decades, business aviation has been a prominent signature on the corporate radar in India becoming an integral part of their corporate structure. However, business aviation still remains largely a ‘status symbol’ or merely a ‘speedy mode of transportation’ for the corporate top brass. The true strength of aviation and its potential to influence outcomes is yet to be understood. From being just a ‘jewel’ in the corporate crown, business aviation has the untapped potential of being a force multiplier and a game changer as well. Unfortunately, such perceptions amongst corporate aviators have been totally lacking. Aviation continues to languish in the columns of ‘cost additions’ on the balance sheet while the aspect of ‘value addition’ remains ignored. Only with the discovery of the true potential of business aviation, its role in corporate management, and its ability to influence decisions and impact the balance sheet, will business aviation be appreciated as an asset.

Selection of Aircraft

Business aviation entails high capital investment and recurring cost. Like enterprise resource planning (ERP) solutions in the industry, a minimum size in terms of turnover is mandatory to even begin envisaging the acquisition of aviation assets. For a manufacturing concern to fruitfully employ ERP solutions, an estimated figure of Rs. 150 crore ($30 million) is quoted authoritatively. Similarly, to employ aviation and to profitably interweave it into corporate management, a figure of Rs. 5,000 crore ($1 billion) would make a good starting point. However, it is imperative for organisations to carry out a cost-benefit analysis before planning for the acquisition of aviation assets. The nature and size of the enterprise in terms of turnover would not only dictate, but also have a significant impact on the type and number of aircraft to be inducted.

As it is with every decision-making process, a clear intent and purpose for acquisition of air assets is important followed by the selection and maintenance of the aim. If the purpose is the symbolic representation of power, image or brand projection; then ‘the bigger the better’ should be the guiding principle. This strategy transformed the image of ‘Sahara’ from that of a little known banking entity to a leading corporate giant. However, if the purpose is to optimise the deployment as an important tool of management, read on the following paragraphs.

Range of aircraft is the definition and manifestation of the strategic corporate vision, intent and dreams of the leadership. Unfortunately, the significance of range in the choice of aircraft has been lost in most cases. If the long-term interests lie within the boundaries of the subcontinent, then aircraft with a range of about 3,500 nautical miles would suffice. However, if the leadership nurses global visions, then anything with a range less than 6,500 nautical miles could be a serious handicap. This could translate into one or more refuelling halts, transgression of flight duty time limits of the aircrew, longer flights, passenger fatigue and lost deals. In most cases, range has been ignored, turning precious investment into mere showpiece instead of vehicles of change.

The involvement of the leadership is all-important in deliberating on the critical issue of seating capacity. Imagine going for a ‘merger and acquisition’ deal and having to leave behind the Chief Financial Officer just because the seating capacity does not permit an extra passenger.

Basing of Air Assets

The air assets need to be strategically located so as to be easily and quickly accessible without operational or administrative constraints. This is the key to maximising profitability. A point often missed is that aircraft standing in hot and dry locations have a longer shelf-life than those parked under conditions of high humidity such as in Mumbai. And a hangar to house the aircraft can add years and save millions in maintenance costs. Amongst the several important considerations for locating corporate aviation assets are proximity to headquarters, length of the runway and watch hours at departure airfield, housing the aircrew, availability of maintenance and refuelling facilities, immigration/custom facilities and radio/navigation aids to permit all weather operations. Poor choice of location could be a cause for regret later.

Availability of maintenance facilities at or near the location could be a major factor in the choice of aircraft. There are original equipment manufacturers (OEM) who offer convenient annual maintenance contracts along with round-theclock assistance apart from supporting hubs for the speedy shipment of spares. Such manufacturers are quick to understand the need of the owners and respond efficiently, often in real time. A display of the understanding of the requirements of clients could easily steer the choice of aircraft. Prolonged periods of inactivity are common in a corporate environment making equipment reliability and speedy response to be important considerations.

Adequate thought needs to be given to the aspect of logistical support for maintenance operations. With the manufacturer situated at a distance and no hub in the vicinity, help may be late in coming in case of unserviceability. Most of the OEMs have their hubs to serve the markets they have developed and areas where they sense potential. It would be operationally and financially beneficial to take this factor into consideration while assessing the suitability of a particular aircraft.

Dispatch reliability has gained significance in the corporate environment because there usually is no alternative. There are no standby arrangements, no aircraft to cannibalise spares from and often no other means of transport within easy reach. So, often ‘dispatch reliability’ steals a march over appearance, lower cost and higher speeds. Today, there are players offering aircraft with over 99 per cent dispatch reliability.

A crucial point is the geographical layout of the corporate assets. Distance of production units from corporate headquarters, airfield elevation and the availability of infrastructure to support aircraft operations could dictate the choice of aircraft. Often the higher echelons of an organisation are located in metros with modern airfields while the production units may be located in remote areas with limited field length, poor radio aids and inhospitable terrain. This may necessitate aircraft capable of short-field operations.