Business Aviation Advisor July/August 2016 by Business Aviation Advisor Magazine

JULY / AUGUST 2016

The Graceful

Goodbye

Opportunities Abound in Cuba

When Is It Time to Take Away the Keys?

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

ENJOY NOW, PROFIT LATER THE HANGAR GAMES TAKING ATTENDANTS AVIATION GRIDLOCK ON HILL ACQUIRING MINDS WANT TO KNOW A Business Aviation Media, Inc. Publication

W W W . B I Z AVA D V I S O R . C O M

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J u l y/A u g u s t 2 016

• Volume 3 / I s sue 4

Acquiring Minds Want to Know

The Graceful Goodbye

by PE TE AGUR

Taking Attendants

F E AT U R E S When is it time to take away the keys?

Opportunities Abound in Cuba

Enjoy Now, Profit Later

Upgrades protect your aircraft’s value

by A D R IAN C H E N E

The Hangar Games

by J OHN E NTI C K N AP & RON JAC KSON

Five factors to finding the right aircraft acquisition advisor by DON H ALOBUR DO

On board to save you and serve you by SUSAN C . FR IE D E N B E RG

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

by E D WAG N E R

Negotiate a win-win lease

D E PA R T M E N T S Publisher’s Message CAN Can. Can You?

by G IL WOLIN

Washington Report

by DAVI D COLLOG AN

Aviation Gridlock On Hill

The Business of Business Aviation The 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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Ju l y/A u g u s t 2 016 B U S I N E S S AV I AT I O N A DV I S O R 3

ACQUIRE WITH CONFIDENCE.

Our commitment. Your advantage. When you’re in the market for a pre-owned aircraft, the ability to make an informed decision is critical. We provide the most comprehensive aircraft purchasing experience available; from the aircraft’s ownership and maintenance history, technology and refurbishment requirements, to market comparisons and financing alternatives. As one of the largest financial services companies in the industry, Global Jet Capital manages several billion dollars in aircraft assets. When you purchase from our fleet, you’re getting more than just a quality pre-owned aircraft – you’re gaining access to a dedicated team of industry experts with a commitment to ensuring the experience you deserve.

When you make a purchase with us, you’re getting much more: – Comprehensive unscheduled maintenance package with JSSI providing coverage for 6 months or up to 400 flight hours, whichever occurs first - Rental Engines and Components during Unscheduled Maintenance to limit your downtime - 24/7 Worldwide Technical Support – Professional Aviation Training from FlightSafety - Initial Pilot Training Program - Initial Maintenance Training Program – Vetted and well-maintained fleet – Complimentary purchasing and financing services upon request

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Maintenance and pilot training programs are customized per individual aircraft. Specifications subject to verification upon inspection and aircraft is subject to prior sales or withdrawal from the market.

PUBLISHER’S MESSAGE ■ PUBLISHER Gil Wolin gwolin@bizavadvisor.com CRE ATIVE DIRECTOR Raymond F. Ringston rringston@bizavadvisor.com MANAGING EDITOR G.R. Shapiro gshapiro@bizavadvisor.com EDITORIAL ASSISTANT Michael B. Murphy mmurphy@bizavadvisor.com WASHINGTON EDITOR David Collogan dlcollogan@gmail.com CONTRIBUTORS Pete Agur The VanAllen Group pagur@vanallen.com Adrian Chene Duncan Aviation adrian.chene@duncanaviation.com John Enticknap Aviation Business Strategies Group jenticknap@bellsouth.net Susan C. Friedenberg Corporate Flight Attendant Training scffatraining@aol.com Don Haloburdo Jet Aviation Flight Services donald.haloburdo@jetaviation.com Ron Jackson Aviation Business Strategies Group ronjacksongroup@gmail.com Ed Wagner Marsh USA edward.r.wagner@marsh.com BUSINESS MANAGER JoAnn O’Keefe jokeefe@bizavadvisor.com BUSINESS AVIATION MEDIA , INC . PO Box 5512 • Wayland, MA 01778 Tel: (800) 655-8496 • Fax: (508) 499-2172 info@bizavadvisor.com www.bizavadvisor.com 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 (electronic, mechanical, photocopying, recording, or otherwise) without the prior written permission of the publisher. The views and opinions expressed in Business Aviation Advisor are those of the authors and advertisers, and do not necessarily reflect the policy or position of Business Aviation Media, Inc. Articles presented in this publication are for general information and educational purposes and do not constitute 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

CAN Can. Can You?

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 continual, the chances are good that you and many other BAA readers will be there in person, hoping to see both Olympic and world records 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 medical 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 corporate CAN member always has the option to decline a flight request. In business aviation, an industry that’s had more than its fair share of black eyes, CAN provides an opportunity for business aircraft owners go above and beyond – literally – in their philanthropic commitments. CAN transported Baron and his family back As a longtime supporter of the Corporate An- home to Atlanta after he received cancer treatment at Memorial Sloan Kettering in NYC. 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

Gil Wolin — Publisher gwolin@bizavadvisor.com Ju l y/A u g u s t 2 016 B U S I N E S S AV I AT I O N A DV I S O R 5

■ FLIGHT OPERATIONS

The Graceful Goodbye When Is It Time to Take Away the Keys?

The VanAllen Group / pagur@vanallen.com

our pilots and technicians are the best of the best. Or not. The fact is that 80% of professionally flown aircraft accidents 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 standard, 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 6 B U S I N E S S AV I AT I O N A DV I S O R Ju l y/A u g u s t 2 016

actively enforced; compliance is up to the individual and the employer. ■■ Consider: Do you really want your valuable asset, key passengers, 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 damaged 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 mandatory 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 w w w. B i z AvA d v i s o r. c o m

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BY PETE AGUR

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 retirement policies. ■■ Example: An aircraft owner who did not want to deal with aviation HR issues opted to outsource the department. Despite promises to the contrary, the management company had no retirement 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. Besides, today’s age 70 is yesterday’s 60. ■■ Consider: Most aviation professionals love what they do. Flying 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 cognitive 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 beginning. If aviation professionals are expected to adhere to strict fitness 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:

EMPLOYMENT CONTRACT – An employment contract codifies the understandings and expectations for both parties. It protects the company and the employee. When written correctly, employment contracts have withstood EEOC age discrimination suits by employees who tried to challenge the agreement.

FIRST CLASS MEDICAL CERTIFICATES – The standard practice in business aviation for flight crewmembers is to obtain 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.

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MEDICAL ADVISORY SUPPORT – If a staff member develops a medical challenge, the company should provide support for his/her full diagnosis, treatment, and recuperation 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.

DISABILITY AND LOSS OF LICENSE INSURANCE – Standard disability insurance does not fully cover the differential in the income loss pilots incur when they become ineligible to fly. The company should seek supplemental insurance to cover that gap appropriately. This greatly reduces the financial incentives for crewmembers to hide a condition that could impair their performance and raise operational risks.

PICK 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.

ONE-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.

MAKE IT AN OCCASION TO CELEBRATE – Forwardthinking 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 cultural and morale booster for the retiree and the group.

HELP THEM START THEIR NEXT CAREER – A “retiring” 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 contract pilot providing supplemental flight service for other owners. Or he or she could assume duties as a nonflying department manager 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

PETE AGUR , Chairman of VanAllen, a business aviation

management consulting firm, holds an MBA, ATP, CAM, and CFI-AIR. He chairs NBAA’s Safety Committee’s Safety Assurance Team, and serves on the Flight Safety Foundation’s Corporate Advisory Committee.

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■ AIRCRAFT INSURANCE

Opportunities Abound in Cuba You’re Ready to Fly – But Are You Covered? BY ED WAGNER s U.S. sanctions against Cuba continue to ease, an increasing number of U.S. corporations and citizens are looking to travel there. Eleven million Cuban citizens represent a tremendous pent-up demand for products and services unavailable to them for more than 55 years. As recently as 2014, the Cuban government published the Portfolio of Opportunities for Foreign Investment, 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 specific licenses, if your passengers are authorized travelers. An application 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 governments, 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 specific license. The application is on the website of the U.S. Department 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 authorization 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 8 B U S I N E S S AV I AT I O N A DV I S O R Ju l y/A u g u s t 2 016

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 specific license, that authorizes that individual to travel to Cuba. With respect to aviation insurance coverage for aircraft operators transporting passengers to Cuba, Section 515.533 of the CACR authorizes transactions incidental to approved travel, such as incidental aircraft repairs required while in Cuba. Provided that Cuba is included in its policy coverage territory, a U.S. aviation insurer is allowed to make payment to Cuban nationals for the repairs. 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 passengers’ 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 transaction, whichever is greater. Intentional violations could lead to additional criminal penalties. Be certain to discuss your own insurer’s requirements, and confirm 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 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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Marsh USA / edward.r.wagner@marsh.com

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■ CABIN OPERATIONS

Enjoy Now, Profit Later Upgrades Protect Your Aircraft’s Value BY ADRIAN CHENE Duncan Aviation / adrian.chene@duncanaviation.com

Choosing a Better Option

Since 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 10 B U S I N E S S AV I AT I O N A DV I S O R Ju l y/A u g u s t 2 016

that such discussions could have negative professional consequences. Encouraging the professionals you trust to manage and fly your aircraft to speak frankly with you will help you understand which updates are “nice-to-haves” and which are “need-tohaves” for an aircraft in your size category. Ask them for this information before an inspection comes due, as many modifications are less expensive if combined with an inspection. Ask what potential effect there is on the value of the aircraft by not completing the modification. This allows you to have a better understanding 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 costing 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 upgrade 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 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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obody 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 aircraft 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 upgrades is one of the easiest ways to protect the value of your asset. However, choosing not to upgrade can have serious negative consequences on the resale value of your aircraft. When cabin upgrades like Wi-Fi, flat-screen monitor technology, or safety measures like new aircraft collision avoidance software 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 accountant 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 neglected. 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. Ironically, 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.

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■ GROUND SERVICES

The Hangar Games Negotiate a Win-Win Lease 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. Read the rules and regulations of your lease – This document spells out the dos and don’ts for tenants. Understand 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. Avoid 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 buying fuel. Or the owner may be difficult, late in paying rent but demanding a premium position in the hangar. Have 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. Be 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

Aviation Business Strategies Group jenticknap@bellsouth.net / ronjacksongroup@gmail.com

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 expectations: a good tenant, a positive cash flow, and a reasonable real estate investment return. Since both you and your prospective landlord want an agreement with favorable terms, the relationship should be based on mutual respect and common ground, and approached with a winwin attitude. These seven steps can help you accomplish this goal: Do your homework – Start the process with research, so you can enter into negotiations with reasonable expectations. Become familiar with the rates being charged by similar hangar owners at the airport you are considering, as well as at other airports in the area. Do 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 metric, which could change if stated targets are not achieved. Establish a fair fuel price – In dealing with the fuel provider 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 tenants on establishing a reasonable discount off the posted fuel

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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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BY JOHN ENTICKNAP & RON JACKSON

“At Cox, business aviation helps us do our jobs better.The airplane is literally a flying office.” JIMMY W. HAYES

President and CEO Cox Enterprises

noplanenogain.org PAID

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■ AIRCRAFT SALES AND ACQUISITIONS

Acquiring Minds Want to Know Five Factors to Finding the Right Aircraft Acquisition Advisor BY DON HALOBURDO Jet Aviation Flight Services / donald.haloburdo@jetaviation.com

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Financial:

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

for any technical, safety, or cosmetic upgrades you may need immediately or want to install later? ■■ Is a new or a used aircraft best for you? What are the tax implications of each? ■■ How will you finance your purchase? Are your expectations realistic, 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 operating 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 aircraft? 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 investment. BAA 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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hen 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 interested in purchasing, as the marketplace has changed dramatically 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 advisor’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 longstanding 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 exact make and model you desire. Does the advisor have a well-defined process to evaluate the different aircraft in the market, and a clear plan to present that material to you, to help you move forward with the acquisition? The advisor you choose should ask you several detailed, interrelated questions about your travel profile, the financial component 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 hangered? 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?

■ AIRCRAFT SAFETY

Taking Attendants On Board to Save You and Serve You BY SUSAN C. FRIEDENBERG Corporate Flight Attendant Training / scffatraining@aol.com

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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-related. 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 discrete, 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 communication 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 responsibility 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 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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hen 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 unlikely 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 Charter So 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 possibility that the acting “flight attendant” on their airplane is a nontrained 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 individual 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 Own Your 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 personality and corporate culture reflective of that company and its CEO,

Fill an empty seat with hope on your next flight. Give a cancer patient a lift.

photo by gabe palacio

Corporate Angel Network arranges free travel for cancer patients using the empty seats on corporate jets. Since 1981, Corporate Angel Network, a notfor-profit organization, has worked with U.S. corporations to schedule more than 45,000 cancer-patient flights and currently transports 250 patients each month to and from treatment. The process is simple. Corporate Angel Networkâ&#x20AC;&#x2122;s staff does all the work. After all, patients and their families have enough to worry about.

Cancer patients fly free in Corporate Angel Network the empty seats on corporate jets. Corporate Angel Network, Inc. (914) 328-1313 www.corpangelnetwork.org

■ WASHINGTON REPORT

Aviation Gridlock On Hill Congress Seems Ready to Punt On FAA Reauthorization Until After the November Election BY DAVID COLLOGAN dlcollogan@gmail.com

tion,” BAA, March/April 2016).

Despite intense opposition from the business aviation community, 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 18 B U S I N E S S AV I AT I O N A DV I S O R Ju l y/A u g u s t 2 016

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 numerous provisions in both the House and Senate bills that most segments of the aviation community strongly support, including airline passengers. “We worked hard to make consumer protections and airport security our top priorities in this bill,” Thune said of S.2658. Not to mention the overriding need for some longterm stability at FAA so the agency can progress with the NextGen ATC modernization program. But Washington insiders suggest Shuster, facing strong opposition to his ATC privatization measure, is preparing to gamble that the chances for adoption of H.R. 4441 might improve depending on the outcome of the November election. He was expected 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 compromise legislation now when you can kick the can down the road until after the election and maybe be in a better position to help your airline cronies next year? And people wonder why nothing important gets accomplished in Washington these days. BAA 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.

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eeing fellow airline passengers standing in three-hour security lines as the summer travel season got underway was no doubt an “Aha!” moment for many frequent business travelers, inspiring them to quit “thinking about” using private 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 consolidations – 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 competition 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 flying voters. And there was a ready-made opportunity to do so because 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 Infrastructure 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 dominated by the scheduled airlines (see “The Airlines vs. Business Avia-

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