business aviation advisor july/august 2016

JULY / AUGUST 2016

W W W.BIZ AVADVISOR .COMA Business Aviation Media, Inc. Publication

ENJOY NOW, PROFIT LATER

THE HANGAR GAMES

TAKING ATTENDANTS

AVIATION GRIDLOCK ON HILL

ACQUIRING MINDS WANT TO KNOW

W W W.BIZ AVADVISOR .COMA Business Aviation Media, Inc. Publication

Opportunities Abound in Cuba

You’re ready to fly – but are you covered?

When Is It Time to Take Away the Keys?

The Graceful Goodbye

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J u l y / A u g u s t 2 0 1 6 • V o l u m e 3 / I s s u e 4

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FE ATURE S

06 The Graceful Goodbye When is it time to take away the keys? by PETE AGUR

08 Opportunities Abound in Cuba You’re ready to fly – but are you covered? by ED WAGNER

10 Enjoy Now, Profit Later Upgrades protect your aircraft’s value by ADRIAN CHENE

12 The Hangar Games Negotiate a win-win lease by JOHN ENTICKNAP & RON JACKSON

18

DE PARTME NTS

05 Publisher’s Message CAN Can. Can You? by GIL WOLIN

18 Washington Report Aviation Gridlock On Hill by DAVID COLLOGAN

14 Acquiring Minds Want to Know Five factors to finding the right aircraft acquisition advisor by DON HALOBURDO

16 Taking Attendants On board to save you and serve you by SUSAN C . FRIEDENBERG

The Business of Business AviationThe Information You Need, From Experts You Can Trust

Aircraft owners and charterers now have a resource to help you make the most effective use of your investments in business aviation. Business Aviation Advisor provides the information you need, without technical jargon, on the business of owning and flying

business aircraft – from operations to acquisition, to management and finance.

Business Aviation Advisor: the Business of Business Aviation

Subscribe to our digital edition at www.bizavadvisor.com/subscribe

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PUBLISHERGil Wolin

[email protected]

CREATIVE DIRECTORRaymond F. Ringston

[email protected]

MANAGING EDITORG.R. Shapiro

[email protected]

EDITORIAL ASSISTANTMichael B. Murphy

[email protected]

WASHINGTON EDITORDavid Collogan

[email protected]

CONTRIBUTORSPete Agur

The VanAllen [email protected]

Adrian CheneDuncan Aviation

[email protected]

John EnticknapAviation Business Strategies Group

[email protected]

Susan C. FriedenbergCorporate Flight Attendant Training

[email protected]

Don HaloburdoJet Aviation Flight Services

[email protected]

Ron JacksonAviation Business Strategies Group

[email protected]

Ed Wagner Marsh USA

[email protected]

BUSINESS MANAGERJoAnn O’Keefe

[email protected]

BUSINESS AVIATION MEDIA, INC.PO Box 5512 • Wayland, MA 01778

Tel: (800) 655-8496 • Fax: (508) 499-2172 [email protected]

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Editorial contributions should be addressed to: Business Aviation Advisor, PO Box 5512, Wayland, MA 01778, and must be accompanied by return postage. Publisher assumes no responsibility for safety of artwork, photographs, or manuscripts.Permissions: Material in this publication may not be reproduced, stored in a retrieval system, or transmitted in any form or by any means (elec-tronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of the publisher.The views and opinions expressed in Business Avi-ation Advisor are those of the authors and advertis-ers, and do not necessarily reflect the policy or position of Business Aviation Media, Inc. Articles presented in this publication are for general infor-mation and educational purposes and do not con-stitute legal or financial advice.Postmaster: Please send address changes to: Business Aviation Media, Inc., PO Box 5512 • Wayland, MA 01778, USA©Copyright 2016 by Business Aviation Media, Inc.All rights reserved Printed in the USA

More than 10,000 of world’s finest athletes from 207 countries will gather in Rio de Janeiro in August for the XXXI Olympiad to determine who is the swiftest, strongest, and most skilled in 306 events. While the broadcast and internet coverage will be contin-ual, the chances are good that you and many other BAA readers will be there in person, hoping to see both Olympic and world re-cords broken.

Not waiting for the Olympics, one reader already has set a “world record.” On April 14, an NCR-owned Bombardier Challenger 300 departed the Meridian FBO at New Jersey’s Teterboro Airport for Atlanta, Georgia. As a member of the Corporate Angel Network (CAN), NCR’s record-setting flight was CAN’s 50,000th cancer patient transport flight. Onboard with NCR executives were one-year-old Baron Yerby and his parents Casey and Jonathan. Baron had just been treated at Memorial Sloan Kettering in New York City for retinoblastoma, a cancer that targets young children.

Since 1981, CAN has been arranging to fly patients to specialized treatment at major medical centers in the empty seats of corporate jets– seats provided to patients and their families at no cost.

Today, the CAN team includes more than 500 of America’s top corporations (including half of the Fortune 100), a small paid staff, and more than 30 part-time volunteers who work with patients, families, physicians, and leading treatment centers to coordinate med-ical travel needs with the scheduled flight activity of those participating corporations.

CAN currently is able to fly more than half the patients they register. That’s almost 250 cancer patient flights every month. But CAN needs more aircraft and crews to provide more seats to meet the additional 46% of transport requests.

Quite Simply, CAN Needs YOU. Getting involved is easy. There are neither costs nor minimum flight commitments. All patients are ambulatory and able to climb the steps of a corporate jet unassisted (or are babies in their parents’ arms), and have medical clearance to fly from their doctor. Each corpo-rate CAN member always has the option to de-cline a flight request.

In business aviation, an industry that’s had more than its fair share of black eyes, CAN pro-vides an opportunity for business aircraft own-ers go above and beyond – literally – in their philanthropic commitments.

As a longtime supporter of the Corporate An-gel Network, I invite you to join me. To find out how an unused seat on your aircraft can make a tough journey for someone like little Baron Yerby that much easier, visit: www.corpangelnetwork.org. On behalf of Baron, and the next 50,000 patients, thank you. BAA

CAN Can. Can You?

Gil Wolin — Publisher [email protected]

CAN transported Baron and his family back home to Atlanta after he received cancer treatment at Memorial Sloan Kettering in NYC.

PUBLISHER’S MESSAGE ■

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The Graceful Goodbye

When Is It Time to Take Away the Keys?

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BY PETE AGURThe VanAllen Group / [email protected]

Your pilots and technicians are the best of the best. Or not. The fact is that 80% of professionally flown aircraft acci-dents are caused by human factors. With that in mind, one

of the most critical waypoints in an aviation professional’s career is the graceful good bye.

Unlike the airlines, noncommercial business aviation has no mandatory retirement age. This leaves the matter up to the owner, the operator, or the pilot. Without a regulatory retirement stan-dard, the end game can be awkward and filled with heightened safety risks.

To understand how pervasive this problem is, an audience of 200 business aviation professionals recently was asked if they’d ever had to intervene when an older pilot’s performance was substandard. Nearly every hand was raised. Why is this such a serious issue?

FAA regulations require a pilot not to fly if he or she has any condition that “make[s] the person unable to perform those duties or exercise those privileges.” These regulations are not

actively enforced; compliance is up to the individual and the em-ployer.

■■ Consider: Do you really want your valuable asset, key passen-gers, and yourself in the back of an airplane that is flown and maintained on the honor system only?

■■ Example: A corporate jet had a hard night landing that dam-aged the aircraft. The aging pilot later admitted he’d lost vision in one eye. He had not told the FAA nor had he grounded himself.

You assume your corporate retirement policy applies to aviation professionals. Or, your company doesn’t have a manda-tory retirement age, so you shouldn’t have one for your aviation department.

■■ Consider: Without a set retirement age, how can you have an effective succession plan or run the department organization in a proactive manner?

■■ Example: A company assumed its number two pilot, the eldest of three aviators, would retire at age 65. Economic and personal pressures made it inconvenient for him to do so. He stayed on for more than two years. During that time, the department lost its

■ FLIGHT OPERATIONS

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prized junior person, when a chance for earlier advancement came up. The company ended up with two new hires at net cost of more than $300,000.

Your aviation department is outsourced. Therefore, staff retirement policies are the responsibility of the management company.

■■ Consider: Very few management companies have formal re-tirement policies.

■■ Example: An aircraft owner who did not want to deal with avi-ation HR issues opted to outsource the department. Despite promises to the contrary, the management company had no re-tirement policies. The client was in the awkward position of being lobbied by the management company for financial and leadership assistance for upcoming retirees.

Your aviation staff members are professionals. They should tell you when they want to or need to stop working. Be-sides, today’s age 70 is yesterday’s 60.

■■ Consider: Most aviation professionals love what they do. Fly-ing is who they are. Often, their perception of “time to stop” is well after their skills – or simply their stamina – have declined, raising operational risks. The Seattle Longitudinal Study on Adult Cognitive Development indicates people’s various cogni-tive skills decline at different ages and rates.

■■ Example: Situational awareness, problem solving, and short term memory are all crucial skills for aviation professionals, and are among the first to decay. However, verbal ability is among the most enduring. As a result, an aging staffer at a large company made more mistakes but was able to talk his way out of them. This dichotomy masked the escalation of safety risks.

An equitable endgame must be part of the plan from the begin-ning. If aviation professionals are expected to adhere to strict fit-ness for duty and retirement date standards, it must be to their benefit to do so. In other words, make it easy for them to comply with mutually understood expectations, and if a medical issue does arise, support them. The following are eight commonly used approaches:

1EMPLOYMENT CONTRACT – An employment contract codifies the understandings and expectations for both par-ties. It protects the company and the employee. When writ-

ten correctly, employment contracts have withstood EEOC age discrimination suits by employees who tried to challenge the agreement.

2FIRST CLASS MEDICAL CERTIFICATES – The standard practice in business aviation for flight crewmembers is to ob-tain and maintain a current First Class Medical Certificate.

The best practice is that the medical examination be conducted by an Aviation Medical Examiner who is selected and approved by the company. Otherwise, some aviators could seek practitioners who are less than rigorous in the conduct of their exams.

PETE AGUR , Chairman of VanAllen, a business aviat ion management consult ing f irm, holds an MBA, ATP, CAM, and CFI-AIR. He chairs NBAA’s Safety Commit tee’s Safety Assurance Team, and serves on the Flight Safety Foundation’s Corporate Advisory Commit tee.

3MEDICAL ADVISORY SUPPORT – If a staff member de-velops a medical challenge, the company should provide support for his/her full diagnosis, treatment, and recuper-

ation and reinstatement of the individual’s flying privileges. The FAA is quick to suspend a pilot’s medical certificate for a known problem, and the reinstatement process is tedious and fraught with bureaucratic hurdles. You might choose to enlist the aid of a firm, like Aviation Medical Advisory Service, to address the challenge.

4DISABILITY AND LOSS OF LICENSE INSURANCE – Standard disability insurance does not fully cover the dif-ferential in the income loss pilots incur when they become

ineligible to fly. The company should seek supplemental insur-ance to cover that gap appropriately. This greatly reduces the fi-nancial incentives for crewmembers to hide a condition that could impair their performance and raise operational risks.

5PICK AN AGE AND STICK WITH IT – The most common age for business aviation retirement policies is 65. That age has the advantage of being the sweet spot of the precedent

set by the airlines, age group wellbeing, and opportunity for the individual to continue to work elsewhere.

6ONE-TIME FINANCIAL INCENTIVES TO RETIRE – A growing number of companies have created a “retirement bonus” to induce separation no later than the desired date.

An employee who opts to stay on loses the bonus. Obviously, the amount of the bonus needs to be compelling.

7MAKE IT AN OCCASION TO CELEBRATE – Forward-thinking companies celebrate their pilots’ retirement dates at the end of the year. This practice allows for participation

in holiday celebrations, vacation accrual, and bonuses. It is a cul-tural and morale booster for the retiree and the group.

8HELP THEM START THEIR NEXT CAREER – A “retir-ing” aviation professional who has no disqualifying health issues may have excellent earning potential. Options are

flying for companies with more liberal age policies, or as a con-tract pilot providing supplemental flight service for other owners. Or he or she could assume duties as a nonflying department man-ager or dispatcher. Providing a strong letter of recommendation can make that transition easier.

With effective planning, policies, and support, a career of great service and performance can be capped by a graceful goodbye. BAA


BY ED WAGNER Marsh USA / [email protected]

As U.S. sanctions against Cuba continue to ease, an increas-ing number of U.S. corporations and citizens are looking to travel there. Eleven million Cuban citizens represent a tre-

mendous pent-up demand for products and services unavailable to them for more than 55 years. As recently as 2014, the Cuban gov-ernment published the Portfolio of Opportunities for Foreign In-vestment, which described more than 240 projects requiring a total of more than $8 billion in outside investments.

What do you need to know before you go?While the majority of sanctions under the Cuban Assets Control

Regulations (CACR) remain, you now are permitted to fly your Federal Aviation Regulation (FAR) Part 91 “N” registered aircraft to Cuba and pay landing and other fees without applying for spe-cific licenses, if your passengers are authorized travelers. An appli-cation for a general license (required for travelers) can be found on the U.S. Department of the Treasury website.

While tourist travel to Cuba still is not permitted, non-tourist travel is allowed for twelve reasons:

■■ Family visits■■ Official business of the U.S. government, foreign govern-

ments, and certain intergovernmental organizations■■ Journalistic activity■■ Professional research and professional meetings■■ Educational activities■■ Religious activities■■ Public performances, clinics, workshops, athletic and other

competitions, and exhibitions■■ Support for the Cuban people■■ Humanitarian projects■■ Activities of private foundations or research or educational

institutes■■ Exportation, importation, or transmission of information

or informational materials, and■■ Certain export transactions that may be considered for

authorization under existing Department of Commerce regulations and guidelines with respect to Cuba or engaged in by U.S.-owned or -controlled foreign firms.

For any other travel purposes, U.S. citizens can apply for a spe-cific license. The application is on the website of the U.S. Depart-ment of the Treasury Office of Foreign Asset Control (OFAC).

U.S. registered aircraft operators seeking to provide charter transportation to Cuba (under FAR Parts 135 or 121) can gain au-thorization from OFAC under Section 515.572 of the CACR, which defines the rules under which U.S. operators can “provide carrier services to, from, or within Cuba, in connection with travel and

transportation of individuals between the United States and Cuba, directly or indirectly.” Those charter operators must retain, for at least five years from the date of the transaction, a certification from each customer indicating the section of the CACR, or the spe-cific license, that authorizes that individual to travel to Cuba.

With respect to aviation insurance coverage for aircraft opera-tors transporting passengers to Cuba, Section 515.533 of the CACR authorizes transactions incidental to approved travel, such as in-cidental aircraft repairs required while in Cuba. Provided that Cuba is included in its policy coverage territory, a U.S. aviation in-surer is allowed to make payment to Cuban nationals for the re-pairs. The insurer first must verify with OFAC that all necessary approvals have been obtained, and that the trip falls within the scope of permission. Some insurers may require copies of the pas-sengers’ certifications or other additional documentation, for their own records, prior to departure.

Failure to adhere to U.S. sanctions against Cuba could result in civil fines of $65,000 or twice the value of the underlying transac-tion, whichever is greater. Intentional violations could lead to ad-ditional criminal penalties.

Be certain to discuss your own insurer’s requirements, and con-firm your coverage territory with your insurance broker prior to departure to Cuba. It’s also wise to discuss the trip with your legal advisors, since the laws concerning monetary transactions, length of stay, activities permitted within Cuba, and other travel-related matters are quite complex, and can change with little notice. BAA

You’re Ready to Fly – But Are You Covered?

Opportunities Abound in Cuba

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ED WAGNER, Aviation Broker Team Manager in Marsh USA’s

Chicago aviation department, has more than 20 years’ experience in

all areas of aviation insurance, currently focusing on general

aviation and aviation product manufacturer insurance programs.

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BY ADRIAN CHENEDuncan Aviation / [email protected]

Nobody likes the game of “keeping up with the Joneses.” But the “Joneses” will be the ones asking for a price concession at sale on an aircraft that has not been kept up-to-date.

Investing now in common upgrades will enable your older air-craft to use the latest technologies, improve its resale value, and increase your comfort, convenience, and safety.

Keeping your aircraft up-to-date with respect to interior up-grades is one of the easiest ways to protect the value of your asset. However, choosing not to upgrade can have serious negative con-sequences on the resale value of your aircraft.

When cabin upgrades like Wi-Fi, flat-screen monitor technol-ogy, or safety measures like new aircraft collision avoidance soft-ware become common in a fleet, the decision to not adopt it often becomes a “pay me now or pay me later” situation. Here’s why:

Suppose you’ve decided to upgrade to a new aircraft. Your ac-countant says that your current aircraft is worth $6 million. But he or she has been depreciating your aircraft at a rate inconsistent with the rate with which updates have been performed. There is no Wi-Fi on board. The original entertainment system is still in place. The carpet is stained, the paint is five years old, and because flight deck upgrades are expensive, the cockpit has been ne-glected. A broker thinks you can get $4 million, but you insist on listing it for $5 million.

Without these upgrades, your multi-million dollar asset has been devalued by $2 million, or 33%, with a swipe of the pen. Iron-ically, the cost to place your aircraft back at the top of that range is only $1 million. But spending $1 million now does not feel right, so you commit to just get rid of the jet.

You purchase your replacement aircraft. Then months go by. Meanwhile, you are paying to maintain your old aircraft in flying condition. Your charts subscription alone is $22,000 a year. A new inspection is due in a few months: more money for an aircraft you’re not even flying. Your aircraft could sit on the market for years.

Finally, you tell the broker to dump it. Listing it for $4 million, you now find you have to include an inspection in the purchase package. The inspector finds corrosion. You spend another $500,000 for the inspection and repairs.

Choosing a Better OptionSince your business aircraft is one of your largest assets, strive to protect its value, in collaboration with your aviation department. They may be reluctant to broach the subject of upgrades, fearing

that such discussions could have negative professional conse-quences. Encouraging the professionals you trust to manage and fly your aircraft to speak frankly with you will help you under-stand which updates are “nice-to-haves” and which are “need-to-haves” for an aircraft in your size category. Ask them for this information before an inspection comes due, as many modifica-tions are less expensive if combined with an inspection. Ask what potential effect there is on the value of the aircraft by not complet-ing the modification. This allows you to have a better understand-ing of the unintended consequences associated with the decision to forego an upgrade.

In most circumstances, the decision to not adopt an upgrade usually found on your aircraft’s make and model will end up cost-ing you not only the price of the upgrade, but a penalty for the stigma associated with not having it. Future buyers are likely to ask for price concessions that reflect the cost to perform the up-grade at the highest retail rate: a cost that may be much higher than if the upgrade had been made concurrent with an inspection at a repair station. Pay now or pay later: the choice is yours. BAA

Enjoy Now, Profit Later

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■ CABIN OPERATIONS

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ADRIAN CHENE is an avionics technical representative at

Duncan Aviation, where he’s worked for more than 16 years. An

expert in internet and phone solutions, he started his avionics career

with the U.S. Air Force.

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BY JOHN ENTICKNAP & RON JACKSONAviation Business Strategies Group

[email protected] / [email protected]

Your aircraft needs a home. The hangar owner – whether a fixed base operator (FBO) or the

airport authority – who can provide that home, has three expec-tations: a good tenant, a positive cash flow, and a reasonable real estate investment return.

Since both you and your prospective landlord want an agree-ment with favorable terms, the relationship should be based on mutual respect and common ground, and approached with a win-win attitude. These seven steps can help you accomplish this goal:

1Do your homework – Start the process with research, so you can enter into negotiations with reasonable expecta-tions. Become familiar with the rates being charged by simi-

lar hangar owners at the airport you are considering, as well as at other airports in the area.

2Do not overstate your fuel needs (uplift) – If you’re planning to negotiate a special hangar rate based on the amount of fuel you’ll be purchasing, be sure to state your

potential needs realistically. Most hangar owners specify the amount of fuel in the agreement, and tie it to a performance met-ric, which could change if stated targets are not achieved.

3Establish a fair fuel price – In dealing with the fuel pro-vider on the field, it’s important to set a fair fuel price for your travel. Most FBO owners and airport authorities who

have the fuel concession are willing to work with their base ten-ants on establishing a reasonable discount off the posted fuel

price. However, aircraft owners should not expect to receive both a deep fuel discount and a discount on the hangar space. Again, think win-win.

4Read the rules and regulations of your lease – This document spells out the dos and don’ts for tenants. Under-stand that your hangar lease may be a sublease. If you are

dealing with an FBO, know that it most likely does not own, but leases from the airport authority, the land the hangar sits on. Therefore, your agreement with the FBO is essentially a sublease, and so ultimately must conform to the terms of the master lease afforded the FBO by the airport authority.

As a signatory to a hangar sublease, you have a right to know the contents of the FBO’s master lease, because you also must comply with its provisions. In addition, terms for rate increases in your sublease should be similar to those in the master lease, and the term of your sublease cannot be longer than the master lease term.

5Avoid becoming a “Hangar Queen” – This term is used to describe a hangar tenant who does not live up to the original terms of an agreement. His or her airplane may be

underutilized, sitting in the hangar collecting dust, and not buy-ing fuel. Or the owner may be difficult, late in paying rent but de-manding a premium position in the hangar.

6Have reasonable service expectations – The FBO or airport authority staffs its facilities based on an average operational day. Some days may be slower than usual, so

requests to pull an aircraft from the hangar, fuel, and position for departure can be satisfied quickly. On other days, the FBO can get quite busy and service requests may stack up, especially during bad weather periods. Be especially patient should your aircraft need deicing – or even a second deicing – before departure. Your life may depend on it.

7Be proactive with service requests – When feasible, make your requests well in advance so the FBO can provide you with a good customer service experience. Also, take

time to get to know the FBO employees. Most are eager to please, love their jobs, and are willing to go the extra mile for an owner who understands and respects their work.

Taking time to develop a satisfactory hangar lease helps ensure that your prized asset is in good hands. BAA

JOHN ENTICKNAP and RON JACKSON are principals of Aviation Business Strategies Group, an aviation services consulting firm providing assistance in successful FBO Operations, Customer Service Training, and IS-BAH registration compliance and auditing.

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■ GROUND SERVICES

Negotiate a Win-Win Lease

The Hangar Games

■ GROUND SERVICES

“At Cox, business aviation helps us do our jobs better.The airplane is literally a f lying office.”

JIMMY W. HAYESPresident and CEO

Cox Enterprises

noplanenogain.org

P A I D F O R B Y T H E N A T I O N A L B U S I N E S S A V I A T I O N A S S O C I A T I O N


■ AIRCRAFT SALES AND ACQUISITIONS

BY DON HALOBURDOJet Aviation Flight Services / [email protected]

When purchasing an aircraft, choosing the right advisor will have a significant impact on your budget and your satisfaction. As you interview three or four prospective

advisors, consider these five important factors:Experience – Look for an advisor with a proven track record

of ten years or more with the type and size of aircraft you are in-terested in purchasing, as the marketplace has changed dramati-cally in just the past few years. He or she should be knowledgeable about historical trends and their potential implications for you.

References – The most valuable references will come from trusted colleagues in the same industry as you, as they can best understand your needs and travel requirements.

Resources – What organizational resources are at the advi-sor’s disposal? Is there an in-house technical advisor who will conduct aircraft-specific flight and maintenance evaluations, plus in-house council to help you negotiate the acquisition? If these functions are outsourced, does the advisor have a long-standing working relationship with the vendors?

Proximity – An advisor based in your geographic region could facilitate the purchase process by saving you time and money.

Clear methodology – As you interview prospective advisors, pay careful attention to the questions they ask you, and to their ability to help you formulate answers to those you cannot answer immediately. Be open to their suggestions as to which type or types of aircraft would be best for you, even if those aren’t the ex-act make and model you desire. Does the advisor have a well-de-fined process to evaluate the different aircraft in the market, and a clear plan to present that material to you, to help you move for-ward with the acquisition?

The advisor you choose should ask you several detailed, inter-related questions about your travel profile, the financial compo-nent of aircraft purchase and ownership, as well as your expected exit strategy.

At a minimum, expect to be asked these questions:Travel Profile:

■■ Where is your home base? Where will your aircraft be hang-ered? The closest hangar may be neither the most convenient, nor the most cost effective.

■■ Where do you travel? Do you travel frequently to the same destination(s)? Is most of your travel planned well ahead, or do you make frequent, unplanned, or multi-stop trips?

■■ Who will use the aircraft? Will it be just you, or your executives, customers, or family? If there are conflicting travel needs, by what process will you decide preference?

Financial:■■ What is your budget for aircraft acquisition, for operations, and

for any technical, safety, or cosmetic upgrades you may need im-mediately or want to install later?

■■ Is a new or a used aircraft best for you? What are the tax impli-cations of each?

■■ How will you finance your purchase? Are your expectations re-alistic, given the market for the aircraft you want, and your own credit situation?

■■ How will you operate the aircraft? Will it be used only for you and your company, or do you plan to make it available for charter? Your advisor should be able to provide an accurate assessment of the market demand for potential charter revenue on your operat-ing costs.

■■ Will you create your own flight department, or will you use a management company? What are the operational and financial impacts of each choice?

Exit Strategy:■■ How long do you expect to own the aircraft? Five, seven, and

ten years are common ownership periods.■■ What will be the estimated residual value when you sell the air-

craft? In recent years, for example, the value of mid- to large-size aircraft has gone down significantly. Your advisor can provide a realistic forecast.

The right advisor will ask the right questions, help you explore your best options, and make expert recommendations to enable you to make the best and most enjoyable use of your aviation in-vestment. BAA

Five Factors to Finding the Right Aircraft Acquisition Advisor

Acquiring Minds Want to Know

DON HALOBURDO is VP and General Manager of

Jet Aviation Flight Services for The Americas. A former U.S. Navy

pilot, he has more than 7,100 hours flight time, and serves on NATA’s

Air Charter Committee.

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■ AIRCRAFT SALES AND ACQUISITIONS


BY SUSAN C. FRIEDENBERGCorporate Flight Attendant Training / [email protected]

When you board a commercial airline, you know that the flight attendants are there for your safety and comfort, and trained for the specific aircraft. And while you may

never need their expert training, it is their job to get you out of the aircraft in an emergency.

In the case of both owned and chartered aircraft, in the un-likely event of an evacuation, you want on board a trained flight attendant who will brief you appropriately, know how to operate your exits, find the smoke hood and don it in a smoke-filled cabin, understand the dynamics of an aircraft that must ditch, and can get you out of an aircraft that is partially underwater, wearing life vests, and into a deployed life raft out on the wing – not inflated in the cabin.

You may be surprised to learn that, for aircraft with 19 or fewer seats – those you charter, those you own, and/or in which you own a fractional share – there is no Federal regulation requiring a trained flight attendant in the cabin.

When You CharterSo that means that the person greeting and serving you with a smile on your next charter flight may – or may not – be trained in the safety and emergency procedures that could save your life.

Most corporate aviation passengers never consider the possibil-ity that the acting “flight attendant” on their airplane is a non-trained person. They assume that he or she is trained in emergency and first aid, as well as egress from the specific aircraft type.

Those who are not trained flight attendants are called “cabin servers” and are not considered crew members. Such an individ-ual will instead be listed on the manifest as a passenger.

Even an airline-trained cabin server may not be familiar with business aircraft. The equipment is different, as are the operation of the main cabin door and the primary over-wing exit.

So when you book your next charter trip, be certain to ask who will be in the back of your aircraft, and whether they are corporate aircraft specific trained.

When You OwnYour business aircraft is an extension of your office. At times there are sensitive company conversations that you do not want to be overheard, along with documents – or even passengers – you do not want seen.

Some companies decide to not hire a flight attendant because they feel that the presence of a third crew member is intrusive. But just as every corporate flight department has a distinct personal-ity and corporate culture reflective of that company and its CEO,

there is a flight attendant who is a good match for you and your aircraft.

Finding and hiring the right person for your operation makes the difference. Look for a flight attendant who:

■■ Is prepared for every emergency, both medical and aircraft-re-lated. He or she will have FAA-approved training in food safety service, first aid, CPR, and Corporate Specific Egress Training.

■■ Respects your privacy – and your confidence. He or she is dis-crete, knows how to “disappear” in the small cabin space, and at your request, is willing to sign a confidentiality agreement (See “Keep Your Business Your Business,” BAA March/April 2016).

■■ Possesses excellent organizational, interpersonal, and commu-nication skills, and is unflappable, flexible, and creative.

■■ Thoroughly understands and has an up-to-date working knowledge of the in-flight operational responsibilities for all cabin electronics. This is especially important as cabin amenities have become more complex and technologically sophisticated.

■■ Is aligned with your mission, and has a keen sense of responsi-bility to you, your executives, your passengers, and your flight department.

The cost of corporate specific emergency training and having an actual, trained Corporate Flight Attendant on your aircraft is an excellent investment in your safety, well-being, comfort, and peace of mind. BAA

On Board to Save You and Serve You

Taking Attendants

SUSAN C. FRIEDENBERG President & CEO, Corporate

Flight Attendant Training & Global Consulting, began her aviation

career in 1970, flying for American Airlines and Capitol Air, then

worked for 31 years as a corporate flight attendant.

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■ AIRCRAFT SAFETY

Corporate Angel Network arranges freetravel for cancer patients using the emptyseats on corporate jets.

Since 1981, Corporate Angel Network, a not-for-profit organization, has worked withU.S. corporations to schedule more than45,000 cancer-patient flights and currentlytransports 250 patients each month to andfrom treatment. The process is simple.Corporate Angel Network’s staff does allthe work. After all, patients and theirfamilies have enough to worry about.

Cancer patients fly free in the empty seats on corporate jets.

Corporate Angel Network, Inc.(914) 328-1313 www.corpangelnetwork.org

Fill an empty seat with hope

on your next flight.Give a cancer patient

a lift.

Corporate Angel Network

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bus aviation advisor 8 X 10.5 ad_caN 2014 8/29/14 12:49 pM page 1


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BY DAVID [email protected]

Seeing fellow airline passengers standing in three-hour se-curity lines as the summer travel season got underway was no doubt an “Aha!” moment for many frequent busi-

ness travelers, inspiring them to quit “thinking about” using pri-vate aircraft and actually finding a way to achieve that goal.

It’s no wonder. With the completion of the American Airlines/US Airways merger in 2015 – the latest in a series of airline con-solidations – the scheduled carriers have achieved a near-perfect system… for themselves. Capacity is constrained and demand is soaring, which keeps upward pressure on fares. The imposition of eye-popping charges for checked baggage and reservation changes added another huge revenue stream, adding billions of dollars annually to airline coffers.

It is indeed wonderful to be a member of that elite club, CEOs of major U.S. airlines, despite the curses raining down upon them from millions of disgruntled passengers.

For people with the financial wherewithal to explore better air travel options, this is an excellent time to do so. Unlike the airline industry, the world of business aviation offers limitless competi-tion over a tremendous range of price points and amenities.

But back to the poor suffering airline passengers. With all the media attention on those long security lines, you might have thought Congress would step in to provide some relief for the fly-ing voters. And there was a ready-made opportunity to do so be-cause existing FAA authorization legislation was due to expire in mid-July.

As was detailed in the March-April edition, Rep. Bill Shuster (R-PA), chairman of the House Transportation and Infrastruc-ture Committee, introduced H.R. 4441, a highly controversial measure to privatize the nation’s air traffic control system and entrust its governance to an 11-member board of directors domi-nated by the scheduled airlines (see “The Airlines vs. Business Avia-

tion,” BAA, March/April 2016).

Despite intense opposition from the business aviation com-munity, and many Democrats on the T&I Committee, Shuster rammed H.R. 4441 through his committee on a party-line vote. But that’s as far as it got. Seeing how controversial Shuster’s bill was, House Speaker Paul Ryan declined to schedule it for a House vote.

Senate Commerce Committee Chairman John Thune (R-SD), introduced his own bill, the FAA Reauthorization Act of 2016, S. 2658. Thune’s bill, which rejected the idea of a private sector ATC organization, passed the Senate in April with overwhelming

support by a vote of 95-3. S.2658 was then forwarded to the House for its consideration.

With one bill already approved by the Senate, and Shuster’s cleared by the T&I Committee, it would seem the stage might be set for the House to debate the two measures and approve some sort of compromise, which could then be sent back to the Senate for its consideration.

Despite the opposition to ATC privatization, there are numer-ous provisions in both the House and Senate bills that most seg-ments of the aviation community strongly support, including airline passengers. “We worked hard to make consumer protec-tions and airport security our top priorities in this bill,” Thune said of S.2658. Not to mention the overriding need for some long-term stability at FAA so the agency can progress with the Next-Gen ATC modernization program.

But Washington insiders suggest Shuster, facing strong oppo-sition to his ATC privatization measure, is preparing to gamble that the chances for adoption of H.R. 4441 might improve de-pending on the outcome of the November election. He was ex-pected to propose a short-term extension of FAA authorization to keep the agency operating until next spring.

Why focus on doing the peoples’ business by passing compro-mise legislation now when you can kick the can down the road un-til after the election and maybe be in a better position to help your airline cronies next year? And people wonder why nothing im-portant gets accomplished in Washington these days. BAA

Aviation Gridlock On Hill

DAVID COLLOGAN has covered aviation in Washington, DC

for more than four decades. This award-wining journalist is known

as one of the most knowledgeable, balanced, wary, and trusted

journalists in the aviation community.

Congress Seems Ready to Punt On FAA Reauthorization Until After the November Election

■ WASHINGTON REPORT

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