- 28 years as a business aviation management consultant
- The VanAllen Group helps its clients (major corporations and individuals) understand their unique private air travel needs, identifies the most suitable options, and supports the purchase and implementation of the resources and services
- Specialties: Air Travel Needs Analysis, Aircraft / Service Acquisition, Aircraft Completion Management, Pre-Purchase Inspection oversight, Executive Search, Policy and Procedure Development, Best Practices Audit, Emergency Response Plan Development
- Clients include: Major corporations (85%), very high net worth individuals (14%) and a few royal families (1%)
- 95% of our work is for North American clients
- All 7 Best Practices
- Pre-Meeting Discovery Process
- One-on-One Call with Expert
- Meeting Summary Report
- Post-Meeting Engagement
Business Aviation - Justification
- A significant amount of consolidation within the market has created risks that may not be obvious.
There are numerous consolidated companies trying to provide multiple choices under one umbrella. Established choices may look the same, but may actually be quite different.
Hawker-Beechcraft filed for bankruptcy protection and got rid of its jet business. The emerged company Is Beechcraft, which is solely in the turbo-prop business. As a result, no manufacturer is currently supporting Hawker-Beechcraft jets. This is causing greatly increased maintenance downtime and dramatic loss in asset value for corporate owners of these airplanes. At least one other well-known manufacturer appears to on the verge of major challenges or a change in ownership.
Another example: Berkshire Hathaway acquired Netjets and EJM (Executive Jet Management). Both of those companies are going through substantial changes. Many of those changes have had the effect of raising the customer's costs while reducing the levels and consistency of service. Verbal performance assurances are not valuable without specific written performance guarantees.
In yet another example, a large fractional company recently acquired a competitor. What the new company or companies will look like and how they will serve their respective customers is not clear.
As a customer, you may not understand the consequences of market changes. The normal thing to do is talk to your salesperson, but his or her vested interest is to keep you on the books. Companies are rarely forthcoming about what they are going to do next, because you are part of their current book of business. You need someone who can provide you with a conservative market perspective to help you to reduce your economic and physical risks.
- Macroeconomics affect aviation professional resources.
Pilot age limits do not apply for private or business aviation. Many business aviation pilots are Vietnam-era and are in their mid-60s or older. The soft economy has delayed their interest in retirement.
Whether they are still on top of their game is not the factor that these pilots are considering. They are looking at when retirement is best for them and their families. Employment laws and regulations work against developing policies and practices that will require physical and cognitive competence of aging pilots.
You, as a customer, should pay attention to the human side of your aviation services. Business aviation professionals are no longer a commodity. They are a growing source of service and quality differentiation.
- Not enough new pilots are coming into the aviation system because of the high cost barriers to entry.
At the front end of the pipeline, the military is no longer the ready and reliable source of entry-level, highly qualified pilots and technicians.
The most common career track is to work for a charter company or a regional air carrier – two of the easier jobs to get. This means they will be earning somewhere in the teens or low twenties when they have spent $75,000 to $100,000 to become a commercial pilot. The competition for experienced and capable pilots is going to get more aggressive, which means that the market price is going to increase.
Unfortunately, many owners view the cost of the pilot as discretionary rather than the most critical piece of the puzzle. Seventy percent of accidents are the result of crew performance.
You can influence how the fractional or charter services company provides crewing for your trips. Among other things, you should establish specific standards for the experience level of crewmembers used on your trips.
- Commercial airline service continues to decline while costs are rising.
The airlines continue to consolidate, which reduces your options and increases your costs. They also continue to adjust their sales and operating models seeking to improve efficiencies and revenues.
None of this is helping you get better results in time efficiency from your travel dollar. Still, as a resource, the major airlines are your best choice for non-critical long distance trips (more than 1,000 miles) for solo passengers.
- New growth markets are in eastern Europe, Latin and South America, China and Southeast Asia.
The accident record and poor service performance of regional carriers in developing areas of the world are much worse than what you experience in North America. Stick to "Flag Carriers," if you can. Otherwise, seriously consider using highly-qualified and vetted business aviation services.
- Emerging services and products are improving customer options and services while also lowering costs. The trick is understanding the benefits, limitations and risks of each.
Good charter services, fractional programs and whole aircraft ownership options are available in nearly all major North American markets. On the horizon are:
- Services that allow you to buy a single seat on a charter flight between common destinations. The FAA has approved the sale of individual seats on non-scheduled charter flights, and the data analysis and the fleet to create that flexibility is in development. Assuming two or three other people are going on the same trip, it would allow you to share the costs. But this is an emerging trend not likely to mature for at least 3-5 years.
- Single-engine turbine-powered aircraft are entering into charter service. Models that are are pressurized and can fly at 330 mph will be coming onto the market in the next five years. The cost of operation and ownership of those aircraft is going to be about two-thirds that of a twin-engine aircraft. Yet, the reliability and safety will be very similar.
- Engine efficiencies plus improved aerodynamics and more effective systems design are reducing the operating costs of new generation aircraft.
- The fractional market continues to mature. Flight Options is going to drive its brand and their market to more of a value focus, which will make them more financially competitive. Flight options also owns Flexjet, which is going to become its premium brand for higher quality service. NetJets will be left in the middle ground.
But as new options and providers emerge, separating the real players from the wannabes is not something you can do by viewing advertising or talking to a salesperson. And, being an early adopter carries significant economic and service risks that may not be worth introductory pricing schemes.