by Rick Nini, Corporate Eagle
In an increasingly interconnected world, new digital tools make it easier than ever to communicate with clients and professional partners. Around the corner or around the world, technology keeps us in touch and in sync. But, as experienced real estate professionals know so well, there are limits to emails and videoconferencing, details that are not always apparent in digital renderings or virtual walkthroughs There are many times when there is simply no substitute for being there in person.
As a result, more real estate companies looking for effective ways to boost their business are turning to private aviation, or, as we say in the industry, “Business Aviation.” This allows them to carve out more face-to-face time with clients and get where they need to be in a timely and efficient manner, ahead of the competition. The benefits of business aviation are significant and potentially dramatic. In a fast-paced and increasingly competitive marketplace, the ability to get deals done and move projects forward in a wider variety of locations can constitute a defining advantage.
Determining whether or not business aviation makes sense for you and understanding the programs and possibilities that come with different business aviation solutions begins with an overview of the benefits of business aviation for real estate companies. Real estate decision makers looking to find out more about business aviation would also be wise to educate themselves about the different types of business aviation programs, and about what questions they should be asking to vet potential partners and determine the best fit for their company.
Business aviation is a significant investment. But, as more businesses of all sizes are discovering, the ROI can be extraordinary, both from a revenue and business generation standpoint and an employee retention perspective. According to the National Business Aviation Association, a staggering 97 percent of the businesses that utilize private business aviation are small to mid-size businesses. Further, a 2009 study conducted by the organization found that businesses using business aircraft had superior financial performance (generating more income based on productivity and efficiency), reduced recession impact and achieved better customer access.
Investing in business aviation boosts employee efficiency and productivity, and delivers the most valuable asset of all: more time. And in a world where we are connected 24/7 and pushed constantly to do more with less, even just a few extra hours can make a world of difference.
With business aviation, brokers gain significant efficiency and productivity by being able to dictate the flight dates and times to fit their schedules, and by having access to nearly 10 times as many locations as commercial airliners do—a huge advantage for brokers looking to invest in secondary and tertiary markets that may not be served by commercial airports. Unlike commercial airliners that can reach roughly 500 airports and are limited to set, inflexible and at times unreliable schedules in a finite number of destinations, business aviation options make it far easier to capitalize on new opportunities in secondary and tertiary markets far quicker than ever before.
And, with today’s modern technology, aboard most modern business aircraft you will find worldwide satellite telephone systems, high-speed Internet capabilities, personal PDA “Text and Talk” features and audio and visual presentation technology with on-board monitors and sound systems. Utilizing business aviation keeps you always connected and continually productive.
Different types of business aviation programs function in very different ways. Options include charter, jet card programs, fractional aircraft ownership and whole aircraft ownership. Understanding which option or options is right for you and your company depends on many factors, including financial considerations, travel needs and other logistical details. Making an informed decision requires a basic understanding of each of the four categories:
Fractional aircraft ownership
Fractional aircraft ownership is an appealing solution and potentially cost-effective for real estate professionals who fly fairly frequently, 50 to 200 hours per-year, and may not need their own aircraft. Similar to a timeshare, fractional programs allow you to purchase or lease a portion of a plane and gain access to that plane for a proportionate amount of time each year. This program might be a good fit if you or your team often needs to travel on short notice, fly to multiple locations in one day or requires the flexibility to fly during peak periods such as holidays and heavy business travel days. Fractional ownership comes with a guaranteed level of service and safety standards.
Whole aircraft ownership
Owning an aircraft is a good fit for heavy flyers with a need of 250 hours or more per year. This option grants outstanding flexibility, but comes at a much higher price point. Total costs and the responsibilities associated with managing an aircraft are significant and should be carefully considered. If your company is not equipped to manage the aircraft in-house, and most are not, many business aviation companies offer turn-key management solutions.
Charter services can be a good fit for real estate professionals who travel only occasionally, but whose schedules are unpredictable or take them to smaller markets difficult to reach through commercial airlines. However, very few charter providers operate their own aircraft directly, while the large majority function as charter brokers and, therefore, the aircraft availability is mostly determined by the aircraft owner. Because charter brokers are typically focused on identifying the lowest-cost provider or simply go with what happens to be available at the time, quality control can be unpredictable and consistency is not a strong point—thus it’s crucial to ask the right questions to ensure the fit is right.
Pre-paid private jet cards are a potential solution for real estate professionals who fly less than 50 hours per year. A jet card program presents less of a long-term commitment, which may be appealing to some companies. Be aware, however, that many jet card programs are essentially charter brokerages, and they consequently have the same set of advantages and disadvantages as charters.
Perhaps the single most important thing that real estate executives and decision-makers can do when evaluating their business aviation service providers is to ask a lot of questions. Ask about everything from safety and security standards to pilot selection, training and experience, and operational and financial details.
Be specific. What are the credentials of your pilots, and how long have they been with the organization? What does your training for your staff entail—how lengthy is it, and how often do they train? How often are you audited by third-party organizations, and what level of certification have you earned? How often do you perform maintenance on each aircraft? What kinds of insurance programs do you offer? Ask about aircraft age, history and specifications, and inquire about operational details such as scheduling, cabin details and facilities.
Your potential partner should be able to outline in-depth safety, staffing and maintenance certifications, training and procedures. Most importantly, visit your business aviation provider and see firsthand the facilities, operations and aircraft. Even the business aviation beginners will recognize quality, professionalism and commitment to safety when they see it.
Ultimately, real estate is not about brick and mortar or bits and bytes, it’s about personal contact. It’s about making the connections that strengthen professional relationships and get deals done. It’s about seeing job sites firsthand and experiencing site plans and sight lines for yourself. Increasingly, savvy real estate companies are making those connections and facilitating those experiences for more projects in more markets by using business aviation as a powerful new business tool. Those who choose the right program for their needs are seeing their business literally and figuratively take off.
Rick Nini is the President and CEO of Waterford Township, Michigan-based Corporate Eagle, a provider of fractional and managed business aviation programs.