Looking for non-biased resource

contact NBAA, National Business Aircraft Assoc

BT

"nobody" wrote in message
om...


I had a brief meeting with my CEO last week. Our company spends 80K -
120K
annually on commercial flights. He knows I am a private pilot and he
asked
me if I could prepare a comparative analysis of alternatives such as
fractional ownership, outright ownership, leaseback or charter.

I don't know jack about jets. My assumption is that I'm looking at a jet
versus a King Air or similar. We're based in Houston and regularly fly to
both coasts with 3 - 6 passengers. I am looking at a large, empty
spreadsheet. Many manufacturers and brokers offer breakdowns for their
products but I am looking for a non-biased source for several pieces of
information.

1.) Where can I find non-biased, mostly accurate estimate of direct and
indirect operating costs?

2.) There are several business jet models available for 1,000,000 like
the
Hawker DH 125, Sabre, Citation 500, Lear 24 and 25, Jet Commander. Short
of
looking up all the AD's for each variation of each model, where can I find
an honest review of those models with both pros and cons?

3.) Is $1,000,000 reasonable or should I expect those aircraft to be in
need of some serious work, AD compliance, or expensive upgrades to meet
RVSM
certification?

4.) Anybody know what a full time corporate pilot makes nowadays?

TIA,
Ed

There is no way to financially justify the cost of an airplane and flight crew.
IMHO it can only be justified where the costs involved are outweighed by the
convenience and speed with which various corporate "entities" can be whisked
from Hither to Yon. When a good portion of the company business is dependent
upon company brass/sales/support people getting to customer sites quickly
and often then it is just factored into the "cost of doing business".

The company bean counters have to find a way to write it off, pass it on to
the customers, make it up with increased positive cash flow or take it out of
employees paychecks. Usually its a combination of all three.



nobody wrote:
I had a brief meeting with my CEO last week. Our company spends 80K - 120K
annually on commercial flights. He knows I am a private pilot and he asked
me if I could prepare a comparative analysis of alternatives such as
fractional ownership, outright ownership, leaseback or charter.

I don't know jack about jets. My assumption is that I'm looking at a jet
versus a King Air or similar. We're based in Houston and regularly fly to
both coasts with 3 - 6 passengers. I am looking at a large, empty
spreadsheet. Many manufacturers and brokers offer breakdowns for their
products but I am looking for a non-biased source for several pieces of
information.

1.) Where can I find non-biased, mostly accurate estimate of direct and
indirect operating costs?

2.) There are several business jet models available for 1,000,000 like the
Hawker DH 125, Sabre, Citation 500, Lear 24 and 25, Jet Commander. Short of
looking up all the AD's for each variation of each model, where can I find
an honest review of those models with both pros and cons?

3.) Is $1,000,000 reasonable or should I expect those aircraft to be in
need of some serious work, AD compliance, or expensive upgrades to meet RVSM
certification?

4.) Anybody know what a full time corporate pilot makes nowadays?

TIA,
Ed

nobody wrote:

I had a brief meeting with my CEO last week. Our company spends 80K -
120K
annually on commercial flights. He knows I am a private pilot and he
asked
me if I could prepare a comparative analysis of alternatives such as
fractional ownership, outright ownership, leaseback or charter.

I don't know jack about jets. My assumption is that I'm looking at a jet
versus a King Air or similar. We're based in Houston and regularly fly to
both coasts with 3 - 6 passengers. I am looking at a large, empty
spreadsheet. Many manufacturers and brokers offer breakdowns for their
products but I am looking for a non-biased source for several pieces of
information.

1.) Where can I find non-biased, mostly accurate estimate of direct and
indirect operating costs?

2.) There are several business jet models available for 1,000,000 like
the
Hawker DH 125, Sabre, Citation 500, Lear 24 and 25, Jet Commander. Short
of
looking up all the AD's for each variation of each model, where can I find
an honest review of those models with both pros and cons?

3.) Is $1,000,000 reasonable or should I expect those aircraft to be in
need of some serious work, AD compliance, or expensive upgrades to meet
RVSM
certification?

4.) Anybody know what a full time corporate pilot makes nowadays?

TIA,
Ed



1) There are some reports you can get Conklin and Decker I believe.

2) I would be really interested to hear what business you are in and how
your customers would find a good, non biased source. Short of consumer
goods, there really is no such thing. At any rate, do not bother. None of
those models will likely fit the needs you have described and save you
money. A jet's value is often a reflection of operating costs (much like
piston twins being cheaper than a similar single when old). Jets under a
million are often costly to operate, which is why they can be had so
cheaply.

3) Only your boss can answer that question. How cheap, slow, and light can
he go? If the same people are doing all the traveling, and they are willing
to become pilots, you could be in good shape with a couple Mooney's. OTOH,
many of the folks you need to move may be scared of anything with a prop.

4) Much of this is affected by risk. You can likely get a guy to manage and
fly the plane for 60 to 80, but you also will spend training money on him.
These costs are reflected in the C+D. He also will not be REALLY full time.
If your corporate culture will demand this guy fits in like the rest of the
mucks, you will end up paying more or having turnover.

Buying your own corporate jet will not save money from a cost only
perspective.

If you want something to take to your boss, talk to Western Airways at SGR
and talk to some of these card companies like Marquis. Get an idea of the
possibilities and lay out a trial plan with business objectives for the
trial. You want to determine if the benefits and savings in other areas
(time, ground travel, hotel, etc.) are worth further study in alternate
transportation methods. Experiment with a charter of a low cost plane and
one of the fractional use cards for the top guys to try out. If they want
to go forward after those trials it will likely be worthwhile to talk to a
consultant.

You will find that the lower cost an employ is, the better it is send them
comercial.

Also, if you are going from Houston to other large metro's at either coast,
its going to be hard to beat the regular carriers unless you can identify
ground time savings using specific airports on both ends. OTOH, if you want
to go from Houston to Shrevesport you might as well buy a plane.

Lastly, worry less about bias at first. If Cessna can't make it look good
to buy their plane, then why worry about their bias?

Don Hammer wrote:

Matt,

My company is in the business of doing those kinds of studies. One
thing I can say with confidence is there is no way you can own a jet
cheaper than taking the airlines. When people or companies decide to
get their own aircraft, it is some of the same reasons you own your
own car. Public transportation is certainly cheaper.

Ego - I always wanted my own (The Jones's deal)
My own space
Point to point transportation
Can't get there from here
Fits my lifestyle

Can it be cheaper? - never. I don't get involved with small older
jets, but budget about $1M a year to operate a larger one.

I never said it would be cheaper, I was just providing some ideas for
him as to how to obtain representative costs.

Another big reason nowadays is security for corporate executives. And
if you consider the cost per hour of a CEO in the equation, then often a
corporate aircraft will save the company money compared to using public
transportation and the additional time that consumes. Keep in mind that
many CEO's make upwards of $1MM annually. If you figure 2,000 working
hours, that is $500/hour. If you add 4-6 hours to every trip for the
CEO to take an airline flight, that is a fair chunk of change. It may
still not make the corporate airplane more cost effective, but combined
with the other advantages you list above, it can make the decision much
more logical.

And if you use a fractional ownership program, it gets even better.


Matt

I saw some interesting stuff at www.sentientjet.com. Looks like somewhere
between a charter and fractional. I think you pay an upfront fee, and they
schedule the charter for you, supposedly at a better rate.

I think they simply act as a dispatcher. It may or not be what you're
looking for.

Good luck.


"nobody" wrote in message
om...


I had a brief meeting with my CEO last week. Our company spends 80K -
120K
annually on commercial flights. He knows I am a private pilot and he
asked
me if I could prepare a comparative analysis of alternatives such as
fractional ownership, outright ownership, leaseback or charter.

I don't know jack about jets. My assumption is that I'm looking at a jet
versus a King Air or similar. We're based in Houston and regularly fly to
both coasts with 3 - 6 passengers. I am looking at a large, empty
spreadsheet. Many manufacturers and brokers offer breakdowns for their
products but I am looking for a non-biased source for several pieces of
information.

1.) Where can I find non-biased, mostly accurate estimate of direct and
indirect operating costs?

2.) There are several business jet models available for 1,000,000 like
the
Hawker DH 125, Sabre, Citation 500, Lear 24 and 25, Jet Commander. Short
of
looking up all the AD's for each variation of each model, where can I find
an honest review of those models with both pros and cons?

3.) Is $1,000,000 reasonable or should I expect those aircraft to be in
need of some serious work, AD compliance, or expensive upgrades to meet
RVSM
certification?

4.) Anybody know what a full time corporate pilot makes nowadays?

TIA,
Ed

On 12-Dec-2004, zatatime wrote:

Just from what I know about operating/owning small aircraft, and the
charter business, you're doing pretty well right now, and any other
alternative will be significantly more expensive.

There are undoubtedly some companies that actually reduce travel costs by
operating their own aircraft (or that use fractional ownership programs),
but that is not usually the issue. The two key factors that "sell" business
aviation are increased productivity of executives and key staff and
increased business opportunities that are enabled by substantially increased
travel flexibility.

I have experience with two examples. In one case, a wireless company can
centralize network engineering functions (and thereby saving huge amounts
annually) by being able to dispatch engineering teams (and their equipment)
as required to relatively small cities within a region. This would be
difficult to do using the airlines.

The other case is my own: Using my Arrow I have been able to schedule
meetings with clients that would have been tough to work out if I were
constrained by airline routes and schedules.

--
-Elliott Drucker

I never said it would be cheaper, I was just providing some ideas for
him as to how to obtain representative costs.

Companies like ours can provide him un-biased advise. We've been
doing very detailed aircraft studies for our clients for over 10
years. See www.le-aviation.com Quick and dirty numbers can be
obtained from companies such as www.conklindd.com and Pro Pilot
Magazine produces a planning guide once a year that can give you some
idea.

Another big reason nowadays is security for corporate executives. And
if you consider the cost per hour of a CEO in the equation, then often a
corporate aircraft will save the company money compared to using public
transportation and the additional time that consumes. Keep in mind that
many CEO's make upwards of $1MM annually. If you figure 2,000 working
hours, that is $500/hour. If you add 4-6 hours to every trip for the
CEO to take an airline flight, that is a fair chunk of change. It may
still not make the corporate airplane more cost effective, but combined
with the other advantages you list above, it can make the decision much
more logical.

And if you use a fractional ownership program, it gets even better.


Matt

Like I said, it's not a money issue, but others such as security like
you said, even though the security on commercial aircraft is better
than on corporate. You just know who your passengers are on the
corporate aircraft. Look at it any way you want, but money is never
the justification.

Think about it this way - You can't fly an aircraft at a direct
operation cost of $4,000 per hour or so and save money flying a $500
per hour person. Fractional's are somewhat better if you fly under
about 300 hours per year, but you still pay a substantial monthly
management fee and an occupied per-hour fee. An advantage to
fractional is you don't pay for deadheads on domestic flights.

The average corporate aircraft fly's about 360 hours per year with a
few upwards of 1000. Multiply that by the D.O.C.'s and the variable
costs and you can see it adds up fast. A guy that earns ONLY $1M per
year can't afford to play that game.

To all us poor people, the cost of something or what we can save may
be all-important, but to a corporation or the mega-wealthily, trust
me, it's a lot further down the list. These aircraft are generally
used for very good reasons, but saving money is not one of them.

Don


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Matt Whiting writes:


Another big reason nowadays is security for corporate executives. And
if you consider the cost per hour of a CEO in the equation, then often a
corporate aircraft will save the company money compared to using public
transportation and the additional time that consumes. Kee

Beware the Key Man rules -- usually your insurance carrier {if not
common sense} restricts the # of PHB's traveling on a given flight.
--
A host is a host from coast to
& no one will talk to a host that's close........[v].(301) 56-LINUX
Unless the host (that isn't close).........................pob 1433
is busy, hung or dead....................................20915-1433

Not looking for cheaper. We are hurting on point to point travel,
scheduling, long security delays, last minute changes, no advance purchase.
In our favor, much of our expense is billed directly back to the clients up
to a pre-determined amount.

"Don Hammer" wrote in message
...
Matt,

My company is in the business of doing those kinds of studies. One
thing I can say with confidence is there is no way you can own a jet
cheaper than taking the airlines. When people or companies decide to
get their own aircraft, it is some of the same reasons you own your
own car. Public transportation is certainly cheaper.

Ego - I always wanted my own (The Jones's deal)
My own space
Point to point transportation
Can't get there from here
Fits my lifestyle

Can it be cheaper? - never. I don't get involved with small older
jets, but budget about $1M a year to operate a larger one.


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http://www.usenet.com

We develop, market, sell, install and support a software package to fortune
250 companies. Salesmen, sales engineers and support staff travel to each
customer at least twice. It only takes 1 day to install our software and 1
day to train the trainers. Often due to scheduling and drive time from the
closest commercial airport, our installation techs can only install one
customer a week because they require an extra travel day on each end of the
trip. If each of my teams can dependably install two a week, I've doubled
my billing.

The short answer is hire more installation teams and fly them all
commercial. With that solution, I've increased my travel budget and my
payroll burden, decreased productivity and now I have twice the number of
people sitting on their thumbs in airport bars or watching a movie in a
hotel room because the last flight out of Podunk left at 4:15 and the next
one isn't scheduled until 4:15 tomorrow.

Ed


"Matt Whiting" wrote in message
...
Don Hammer wrote:

Matt,

My company is in the business of doing those kinds of studies. One
thing I can say with confidence is there is no way you can own a jet
cheaper than taking the airlines. When people or companies decide to
get their own aircraft, it is some of the same reasons you own your
own car. Public transportation is certainly cheaper.

Ego - I always wanted my own (The Jones's deal)
My own space
Point to point transportation
Can't get there from here
Fits my lifestyle

Can it be cheaper? - never. I don't get involved with small older
jets, but budget about $1M a year to operate a larger one.

I never said it would be cheaper, I was just providing some ideas for
him as to how to obtain representative costs.

Another big reason nowadays is security for corporate executives. And
if you consider the cost per hour of a CEO in the equation, then often a
corporate aircraft will save the company money compared to using public
transportation and the additional time that consumes. Keep in mind that
many CEO's make upwards of $1MM annually. If you figure 2,000 working
hours, that is $500/hour. If you add 4-6 hours to every trip for the
CEO to take an airline flight, that is a fair chunk of change. It may
still not make the corporate airplane more cost effective, but combined
with the other advantages you list above, it can make the decision much
more logical.

And if you use a fractional ownership program, it gets even better.


Matt