NOVEMBER / DECEMBER 2019
Parting (Out) Is Such Sweet Sorrow Finding the Optimal Time to Part
A-OK When AOG
Aircraft Help on the Ground IS 50/50 A BETTER OPTION? WE VALUE OUR CUSTOMERS SAFETY, SERVICE, AND CONNECTIVITY PRIORITIZING SAFETY WHEN CHARTERING A Business Aviation Media, Inc. Publication
W W W . B I Z AVA D V I S O R . C O M
It’s time to consider CorporateCare® Enhanced. We offer customers the industry’s most comprehensive global services network and leading edge digital tools, all focused on getting you to your destination as planned. For more information, email corporate.care@rolls-royce.com The future. Rolls-Royce.
N o v e m b e r / D e c e m b e r 2 019
6
8
F E AT U R E S
Parting (Out) Is Such Sweet Sorrow 06 Finding the Optimal Time to Part
• Volume 6 / I s sue 6
by S TE V E FUS H E LB E RG E R
A-OK When AOG 08 Aircraft Help on the Ground
12
17
Safety, Service, and Connectivity
The Evolving Role of Flight Attendants
by A MY N E L SON
D E PA R T M E N T S
by ANTHONY K IOUS S IS
05 Publisher’s Message
12
NBAA JAM!
Is 50/50 a Better Option?
by G IL WOLIN
by DAVI D W E IL
18
Washington Report
Consider Aircraft Co-ownership
14
14
We Value Our Customers Why Use An Accredited Appraiser?
by LOUIS C . S E NO
Prioritizing Safety When Chartering by DAVI D COLLOG AN
18
Above and Beyond 2019:
Business Aviation Advisor’s Podcast Series Want to Learn More About Your Investment in Business Aviation? Tune in to Business Aviation Advisor’s informative podcast series, on the business of owning and flying business aircraft – from entry portals, to acquisition and operations, to management, insurance, finance, and more.
The Information You Need, From Experts You Can Trust
www.bizavadvisor.com/podcast
w w w. B i z AvA d v i s o r. c o m
No v e m b e r/ D e c e m b e r 2 019 B U S I N E S S AV I AT I O N A DV I S O R 3
When you’re tasked with upgrading your aircraft with last year’s operating budget, you could keep crunching numbers –
\ Or, you could let us. A Global Jet Capital Operating Lease can make it easier to upgrade without tying up the capital required in a traditional cash purchase. You’ll have the freedom to choose and equip your own aircraft—new or used. At the end of the lease, return the aircraft and select your next one, free from worries about residual values and tax implications. Simple. With more than $2 billion in assets, world-class financial backing, hundreds of years of collective experience, and thousands of business aircraft transactions behind us, Global Jet Capital is uniquely positioned to craft customized financial solutions.
844.436.8200 \ info@globaljetcapital.com \ globaljetcapital.com Miami \ Hong Kong \ Zurich \ New York
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 ASSISTANT EDITOR Michael B. Murphy mmurphy@bizavadvisor.com WASHINGTON EDITOR David Collogan dlcollogan@gmail.com CONTRIBUTORS Steve Fushelberger MarComm Resources Fushelberger@gmail.com Anthony Kioussis Asset Insight, LLC akioussis@assetinsight.com Amy Nelson Cabin Management Specialist amyk.nelson@att.net Louis C. Seno Jet Support Services, Inc. lseno@jetsupport.com David Weil Flight Dept Solutions dweil@flightdeptsolutions.com BUSINESS MANAGER JoAnn O’Keefe jokeefe@bizavadvisor.com BOARD OF ADVISORS Paul Cardarelli • Larry Flynn Anthony Kioussis • Dick Koenig Joe Moeggenberg • Louis C. Seno Nel Stubbs • Rolland Vincent John (Jack) M. Young 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.
NBAA JAM!
Most folks like to deal in round numbers whenever possible. Like, “We’ll be there in a couple of hours...” As in sports, performance in aviation requires quite a bit more precision, today measured in one-hundredths of a second — except when it comes to new model numbers. There round numbers prevail, like G700, G500/600, Global 7500/8000, and Praetor 500/600 among aircraft, and engines such as Pearl 700 and PW800. Those new aircraft and motors all were on display at the 59th annual National Business Aviation Association trade show and convention (NBAA-BACE) last month in Las Vegas. More than 25,000 aviation professionals toured about 1,000 exhibits and examined almost 100 aircraft, both new and preowned, on display in the hall and at nearby Henderson Airport. It was a real “NBAA Jam,” aviation’s version of the arcade game introduced 29 years ago by Midway. Arch rival and friendly competitor teams of airframe and engine manufacturers were going “two on two,” vying for your aviation manager’s attention – and for your next business aviation investment “from downtown!” Renewed focus on other NextGen aviation products and services showcased more online apps, designed to monitor aircraft and aviation department data and performance. More efficient use of natural resources was another major topic of discussion. While Business Aviation produces less than .04% of all worldwide carbon emissions, much of the aviation innovation on display in Las Vegas focused on driving that contribution even lower. Alternative power and fuels – electric aircraft and Sustainable Alternative Fuel (SAF) – were featured in both presentations and exhibits, as well as at the airport’s static display. That’s understandable, given the industry’s aggressive goal to reduce greenhouse emissions by 50% by 2050. Planes departing Las Vegas, led by manufacturers Gulfstream, Bombardier, Textron, and Embraer, uploaded an estimated 150,000 gallons of SAF for their return flights, thanks to a cooperative effort among the airport, local fuel suppliers, and NBAA. And while the introduction of longer range electric aircraft depends on the development of more powerful batteries, short range Urban Air Mobility (UAM) vehicles flying in and around major metropolitan areas appears just around the corner, via electrically powered vertical takeoff and landing (eVTOL) aircraft. Such creativity seems to come in batches – and at imprecise intervals. We learned during the NBAA convention in Atlanta – also 29 years ago – that Gulfstream had given the green light to the GV, as Bombardier sought orders for the first iteration of the Global Express, and the Falcon 2000 made its first NBAA appearance. With this burst of creativity, as always, there’ll be a certain number of winners and losers – products and ideas that will stick and others that won’t fly. So stay tuned, as BAA provides updates on the latest tools at your disposal, designed to make your flying experience safer, more efficient, and more productive. Boomshakalaka!
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 2019 by Business Aviation Media, Inc. All rights reserved
Gil Wolin — Publisher gwolin@bizavadvisor.com
Printed in the USA No v e m b e r/ D e c e m b e r 2 019 B U S I N E S S AV I AT I O N A DV I S O R 5
■ AIRCRAFT SALES & ACQUISITION
Parting (Out) Is Such Sweet Sorrow BY STEVE FUSHELBERGER
P
MarComm Resources / fushelberger@gmail.com
arting, whether from relationships or jobs, is a fact of life. In today’s business aviation industry, for a variety of reasons, parting out aircraft (permanently grounding the aircraft and selling off its component parts) is now a much larger part of life. Two major factors are regulatory mandates, and the cost to comply with them. Failure to be aware of and understand these influences almost certainly guarantees that when you do part with your aircraft, you will also depart with less money. “Airframes and engines face natural hurdles that are not easy, and usually not possible, to overcome,” observed Brad Stancil, Executive Vice President at Holstein Aviation. “The simple fact is that business aircraft truly do have a finite life. At some point, the total hours and number of cycles simply time the aircraft out of operational existence.” Nevertheless, in most cases, an aircraft reaching the end of its operational life is not the primary reason why that asset needs to go away. The time and cycles remaining on most aircraft can readily translate into a good number of years left in the useful life. However, business jets and turboprops have two separate and distinct lives: operational and financial. An asset with complete and comprehensive records that has been operated and maintained 6 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
properly, based in a location not prone to adverse environmental factors, and in a clean, dry hangar, certainly should be able to continue flying. But, at what cost? This is where the financial life of an aircraft comes into play. As an aircraft reaches its fifteenth birthday, you need to have a plan in place. In fact, it’s a good idea to begin planning for this eventuality on the first day your aircraft is placed into service. Most models have a big “gotcha” out there somewhere. At some point, X-rays and invasive inspections will drive up maintenance costs. For example, corrosion is much more likely to occur in an older aircraft. A routine maintenance check can make your aircraft obsolete immediately. There is no “one-size-fits-all” solution for determining when or how to dispose of a business aviation asset. Many external factors, such as IRS rules, generally accepted accounting principles, depreciation schedules, and regulatory requirements, figure into this decision-making process. New regulations often can become the sole deciding factor for not keeping an aircraft in service. ADS-B installation is the latest looming FAA deadline – and has substantial potential to sideline a large number of business aircraft based in the United States as of January 1, 2020. For example, fewer than 60% of the Learjet 31 and 35 fleets currently are equipped to meet that deadline, according to global aviation data service company FlightAware. w w w. B i z AvA d v i s o r. c o m
PENN A ERO SPACE S OLUTIONS, LLC
Finding the Optimal Time to Part
When determining if meeting the requirement is economically feasible, an operator must address several questions: ■■ How will being non-compliant affect me operationally? ■■ What is required to meet the new standard? ■■ How much will becoming compliant cost? ■■ How long will it take to complete the work? ■■ What will the aircraft’s market value be when compliant? Selling the aircraft into another country usually is not a viable option. Even for an aircraft certified by that county’s FAA equivalent, and so able to continue operating in that airspace, restrictions are frequently in place preventing importation of aircraft not meeting the latest set of regulations. Simply put, at some point continuing to operate an aircraft no longer makes monetary sense. Jeff Ellis, head of sales at Penn Aerospace Solutions, summed the situation succinctly: “When you are faced with having to put more money into the aircraft for maintenance and/or upgrades than the market value of that aircraft, disposal quickly becomes a pretty straightforward business decision. Parting out the aircraft can be a viable and expedient alternative. However, you want to do this at the optimum time – when the individual parts and components are worth the most, and before an expensive inspection. This is a key part of the planning process for owning and operating a business aircraft.”
histories diminish prices, and have a high potential to make a part legally unsalable. Thus, complete maintenance records are critically important. Keeping a thorough and accurate history is indispensable in obtaining the maximum value when you sell. Finally, component prices are not necessarily influenced by where the maintenance was performed, so long as the facility was qualified and FAA certified. Parting out an aircraft requires the assumption of substantial potential liability plus incurring significant expense, not the least of which is necessitated by properly removing, cataloging, and tracking the history of every component. This is a time-consuming, complex, and costly process, requiring highly skilled technicians. Additionally, maintaining a valid paper trail regarding the condition of every part is critical.
Financial Realities
When to Part Out Your Aircraft Some owners have the misconception that money spent on recent maintenance or upgrades translates into an average asking price increase when an aircraft is subsequently parted out. In reality, that maintenance event may be the very thing, and perhaps the only thing, which determines the market value. Owners obviously want to obtain the most money for their aircraft. But when parting out an aircraft makes the best financial sense, sellers need to possess a realistic understanding of what determines the current value of that asset. Marketplace realities have an impact on the value of parts and components removed from an aircraft. Overall, availability heavily influences price. Scarcity can be the order of the day for older aircraft parts, driving prices upward. Plentiful parts will have the opposite effect. Without exception, missing or incomplete w w w. B i z AvA d v i s o r. c o m
A separate, but related, subject is the acquisition of an older aircraft. In addition to the factors delineated above, obtaining financing can be a challenge. Michael Cole, Managing Director-Aviation for the Bank OZK Business Aviation Group, elucidated, “We definitely do want to provide financing for qualified clients. However, the age of the aircraft and the length of the loan must total less than 25 years. Second, there needs to be an active secondary market for the aircraft. Third, upgrades must offer as closely as possible a dollar-fordollar return, which generally rules out older aircraft. Finally, we need to have the ability to remarket the aircraft in a timely manner, should that become necessary.” The number of aircraft being parted out is not anticipated to diminish. In fact, that number is likely expected to grow, in large part due to regulatory mandates that, from a fiscal perspective, bring an aircraft to the end of its financial life. The key, when deciding to part out an aircraft, is doing so at the optimal time. The time will come for you and that business aircraft which has served you so faithfully for thousands of hours to go your separate ways. With apologies to William Shakespeare, it is, however, well within your power to make the departure either sweet or sorrowful. BAA STEVE FUSHELBERGER is a marketing and
communications consultant to the business, general, commercial, and defense aviation industries. Possessing a Commercial Pilot license, he’s held senior leadership positions at Rolls-Royce, United Air Lines, Textron Aviation, and Leonardo.
No v e m b e r/ D e c e m b e r 2 019 B U S I N E S S AV I AT I O N A DV I S O R 7
■ GROUND SERVICES
A-OK When AOG Aircraft Help on the Ground BY ANTHONY KIOUSSIS Asset Insight, LLC / akioussis@assetinsight.com
W
Bombardier Bombardier Business Aircraft’s dedicated Customer Response Team (CRT) Learjet 45 Parts Express aircraft and CRT mobile units are on location at events, manned by a team of technicians. They carry state-of-the-art diagnostics equipment supporting Learjet, Challenger, and Global aircraft, to supplement their Field Service Representatives to provide you with full service support. They can quickly bring in parts and additional technical personnel if required for unscheduled maintenance events.
www.bombardier.com
Constant Aviation
Constant Aviation provides full service onsite AOG support at special events. Dedicated technicians provide maintenance, avionics, and structure services, and can be dispatched round-the-clock. With more than 2,838 years of combined experience, Constant Aviation’s AOG service technicians have supported turboprops and business jets at more than 5,700 events at more than 464 airports. Currently, Constant’s AOG mobile units span 21 cities nationwide, offering immediate response 24/7/365.
www.constantaviation.com
8 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
Dassault
Dassault offers on-ground services to support Falcon Jet owners with its GO Teams staffed with AOG technicians, and often additional technicians onsite. More help is available at any of the 87 Falcon Authorized Service Centers, backed up by a dedicated Falcon 900 Airborne Support aircraft that can offer alternative lift to customers.
www.dassaultfalcon.com
Duncan Aviation
Duncan Aviation has 184 avionics and engine technicians positioned throughout the U.S., ready to travel worldwide to support operators requiring assistance and service. Its avionics satellite shops provide service to operators at 27 shops, and work away locations and Engine Rapid Response Teams offer traveling engine technicians at 14 sites, ready to launch anywhere. Owners traveling in the U.S. are within 150 nautical miles of a Duncan Aviation AOG team.
www.duncanaviation.aero/services/aog
Embraer
With almost 1,000 business jets in more than 60 countries, Embraer Executive Jets is prepared to assist its customers anywhere in the world, any time of the day, from any of its 58 authorized service centers. It offers an integrated comprehensive customer support plan for major global events, including broad logistic support and special procedures, and often field service representatives positioned at major events, backed by its 24/7 Contact Center.
executive.embraer.com
w w w. B i z AvA d v i s o r. c o m
GULFSTRE A M A ERO SPACE
hen traveling to a special event, whether it’s the Super Bowl in Miami this February, the World Economic Forum in Davos or the Kentucky Derby next May, the 2021 U.S. Presidential Inauguration, or other sporting, political, or worldwide business conference, you’ll have company. At these events, an extraordinary number of business aircraft will be landing and then taking off within approximately the very same time as you, vying for hangar space and landing slots at the same airports proximate to the event venue. But you’re also not alone in that your Original Equipment Manufacturer (OEM), as well as independent maintenance service providers, will be onsite to provide you with parts and technical support should your aircraft experience a maintenance event. What should you know before you travel, what services do the various maintenance providers offer at a high-traffic special event, and how can you best take advantage of their services? Many support organizations suggest that your head of maintenance and chief pilot contact them as part of trip planning. If your OEM or maintenance support provider offers a pay-per-hour program, consider taking advantage of it, for the highest level of customer service and support. Support is offered in several ways. For example:
S I G N A T U R E
ELITE C L A S S
FLY COMMERCIAL AND HAVE A LUXURY EXPERIENCE. Now fly commercial and still enjoy the luxury experience of private jet travel. Our exclusive Signature ELITE Class service ensures VIP treatment, completely bypassing main terminal lines and chaos. Check into your departing flight from one of our comfortable lounges. Dedicated, private screening and a chauffeured car ride speeds you directly to your aircraft. We meet arrivals at their aircraft and chauffeur them back to dedicated customs and immigration clearance. It’s a whole new way to travel. London
Gatwick
|
Antigua
|
Barbados
For more information, please visit www.SignatureEliteClass.com To book our services, contact +44 1293 569000 or ELITEClass@signatureflight.com
|
Grenada
Signature Flight Support London-Gatwick is an Authorised Licensee of the British Butler Institute, demonstrating our impeccable customer service standards.
Bombardier Business Aircraft's 15 mobile maintenance units in the U.S. and Europe have performed more than 4,000 maintenance events, a milestone reached just three years after the company launched them.
GE Aviation offers technical support and dedicated field service representatives for customers flying GE-powered Falcon, Challenger, and Global Jet aircraft. GE Aviation’s nineteen Authorized Service Centers offer comprehensive line maintenance, removals, and re-installations of engines and Line-Replaceable Units (LRUs) and engine spares for CF34-3 engines. GE Aviation offers service agreements through OnPoint, a long-term hourly cost maintenance program.
www.geaviation.com/support
Gulfstream
Gulfstream Field and Airborne Support Teams (FAST) support the full range of Gulfstream business jets, and help ensure a swift, wellcoordinated response to all AOG situations. More than 20 U.S.based pilots and technicians work in around-the-clock shifts, and are equipped with two Gulfstream G150s as their primary aircraft. The FAST1 mobile service center tractor trailer is positioned at many major events, staffed by technicians covering avionics, mechanical, and interiors.
www.gulfstream.com/customer-support
Honeywell
Honeywell has both Avionics and Mechanical Technical Support Engineers (TSE) standing by to support any AOG engine or avionics service requirements. Honeywell also maintains an additional stock of the most commonly used parts in anticipation of any possible orders for such events. Honeywell’s Aerospace Technical Support (ATS) group is available via its AOG call center 24 hours/7 days a week for remote troubleshooting, and its TSE can be dispatched for onsite support.
aerospace.honeywell.com
Pratt & Whitney
Pratt & Whitney actively supports its more than 13,000 customers. At major events, they are onsite to meet customers, positioning Field Support Representatives (FSR) at strategic locations throughout the duration of the event, enabling them to provide onsite 10 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
troubleshooting support services. With critical engine components on hand, Mobile Repair Teams, as well as rental engine support incountry, are on standby throughout the event.
www.pw.utc.com/support
Rolls-Royce
Rolls-Royce actively supports owners of Gulfstream G350/450, G300/400, and G650, as well as Bombardier Global 5000/6000 and 5500/6500 aircraft. Its On-Wing Care (OWC) is a global in-field specialist maintenance support organization which has handled more than 6,000 field maintenance events and avoided more than 300 unplanned engine removals/shop visits since its inception in 2005. Rolls-Royce stations OWC technicians and a Regional Customer Manager onsite, supported by its 24/7 Operational Service Desk.
www.rolls-royce.com
Textron Aviation
Textron Aviation’s 1CALL maintenance support group has a number of Textron Aviation’s 60 Mobile Service Units (MSUs) onsite at events to support Cessna Citation, Beechcraft King Air, and Hawker turbine business jet and turboprop aircraft owners. They are equipped to perform limited inspections, engine, tire and brake service, and more. Additionally, Textron’s Air Response Service has U.S.-based support aircraft available 18 hours a day, 7 days a week, to keep its owners and operators in the air.
www.txtav.com/aog-support
Your OEM and maintenance support providers want to be sure that your flights to and from special events are smooth and troublefree, even if you should experience a maintenance issue. Communicate in advance about your flight plans, so they can help ensure that they have the right number of people and parts in the region and onsite, to support any potential issues and to keep you flying and on schedule. BAA ANTHONY KIOUSSIS is president of Asset Insight, LLC,
which offers eValues™, an online service providing Current and Residual aircraft valuations. With 40+ years in aviation, he serves on the National Aircraft Finance Association Board of Directors.
w w w. B i z AvA d v i s o r. c o m
BOMBA RDIER
GE Aviation
■ AIRCRAFT SALES & ACQUISITION
Is 50/50 a Better Option? Consider Aircraft Co-ownership BY DAVID WEIL
W
Flight Dept Solutions / dweil@flightdeptsolutions.com
12 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
easy to follow and give both owners confidence that they will be able to use the aircraft a very high percentage of the time they need it. ■■ Third Party Management – Neither co-owner likely has the time or the expertise to manage the numerous tasks necessary to safely and efficiently operate a shared business jet. Using a competent management company that has experience with co-ownership arrangements will go a long way toward making the situation successful. The management company serves as a neutral third party to implement the scheduling guidelines and help minimize the number of potential owner conflict areas, as well as provide “back-up” aircraft in case of unavoidable schedule conflicts. In addition, the management company will routinely take care of all the behind-thescenes issues that arise that the co-owners don’t want to handle. In the right circumstances, a 50/50 co-ownership arrangement can be a great solution for your travel needs. (See: “Giving Half a Whole Lot of Thought,” BAA July/August 2017.) However, it is not for everyone and potential pitfalls need to be avoided. To ensure the highest likelihood of success, work with an aviation consultant or management company with proven experience with such arrangements. BAA DAVID WEIL founded Flight Dept Solutions, a company
dedicated to helping aircraft owners purchase and operate their aircraft in the manner best suited for their needs. He is a past Chairman of the NBAA Tax Committee.
w w w. B i z AvA d v i s o r. c o m
ISTO CKPHOTO
hat if you could own and access a turbine aircraft when you needed to fly, but only be responsible for 50% of the fixed costs of ownership? Co-ownership of a business aircraft represents such an opportunity, and can be very cost-effective if you would not, or could not, purchase an entire aircraft yourself. And if you already own a whole aircraft, finding a partner with whom to share those costs can make sense, particularly if you’re under-utilizing your aircraft and want to reduce the total operating costs attributable to your own use. If you currently use charter, fractional ownership, and/or a jet card arrangement, you may outgrow these means of accessing business air transportation as your travel needs increase. You may want the added convenience of having your own aircraft with your own crew, locally based and at your disposal. Co-ownership may be your best option. If you expect to fly between 100 and 200 hours per year, owning a whole aircraft becomes very expensive. As a result, such aircraft owners frequently turn to a management company to charter out the aircraft when it’s available, generating third party revenue to help offset their full ownership costs. While there are advantages to this type of arrangement, it still requires an upfront 100% investment in the aircraft and exposure to funding a significant portion of the airplane’s fixed operating costs. In addition, there may be extra crew training costs, additional maintenance costs, and possibly more investment in the aircraft in order to qualify it to fly under the FAA’s Part 135 charter regulations. Co-ownership of an individual aircraft has not received more recognition because it can be difficult to make it work well for both co-owners. While co-ownership does offer the same tax and title advantages of whole aircraft ownership, as well as flying with your own crew every time, several key factors must be considered in order to make co-ownership successful: ■■ Owner Compatibility – The two co-owners must be able to work together to compromise on any scheduling conflicts or other aircraft-related matters that arise. Ideally, they should be geographically proximate, in order to minimize the number of ferry hours needed to accomplish both individuals’ flight schedules. Furthermore, each owner needs to be assured that the other is financially capable of supporting his/her part of the deal. And each owner must be allowed to implement his/her own financing as well as take advantage of all available tax benefits of ownership. ■■ Aircraft Scheduling – A major factor in making a co-ownership relationship work is agreement on scheduling guidelines that are
ARGUS Ratings The Most Recognized and Requested Symbol of Quality
ARGUS Rated Charter Operators are the most trusted and respected in the world. ARGUS Rated Operators are the only choice for the most selective buyers of charter. ARGUS Ratings are private aviation’s only truly independent, third-party source for trusted operator due diligence. Demand the best, demand ARGUS Rated Charter Operators.
FLY CONFIDENTLY WWW.ARGUS.AERO
■ AIRCRAFT FINANCE
We Value Our Customers Why Use An Accredited Appraiser? BY LOUIS C. SENO Jet Support Services, Inc. / lseno@jetsupport.com
K
14 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
“The accreditation process is detailed and meticulous,” said Johnnie White, ASA’s CEO. “We recognize that your turbine aircraft is a multimillion-dollar asset. To ensure its proper valuation, we set high standards on educating our designated members.” You can secure a qualified appraisal for your aircraft in one of two ways: ■■ In a desktop valuation, the appraiser will go well beyond a simple pricing comparison by researching the current aircraft on the market, establishing the average days the aircraft model has been on the market, and evaluating any trending data. The appraiser also will assess the maintenance status, look for any major inspection expenses that could be coming due, and perform a cursory check of the logbooks and specifications for the aircraft without looking at the asset. This is the less costly option. ■■ A physical, onsite appraisal will consist of all of the above, plus a hands-on inspection that includes a thorough examination of the aircraft, including engine and airframe maintenance logbooks. With this option, you will pay for the appraiser to travel to and from your aircraft, for the time spent on the physical inspection of the aircraft and records, and for research of recent sales of comparable make/model aircraft to establish the asset’s current market value. When your aircraft needs an appraisal or reappraisal for insurance or refinancing purposes, or to prepare for its disposition, choose an ASA-accredited appraiser who has invested in their profession to become the most accomplished and skilled person to appraise your aircraft and to keep a pulse on its value for years to come. BAA LOUIS C . SENO, ASA , is Chairman Emeritus and Special
Advisor to the Jet Support Services, Inc. Board of Directors. He oversees the JSSI Advisory Services range of aircraft consulting services and has been an Accredited Senior Appraiser since 2006.
w w w. B i z AvA d v i s o r. c o m
ISTO CKPHOTO
eeping a finger on the pulse of your aircraft’s current valuation is crucial, both for tax and depreciation purposes, and when you seek to refinance or sell your aircraft. (Listen to “Regular Check-Ups,” Above & Beyond Podcast, June 2019.) The demand for reputable appraisers is increasing throughout the business aviation industry. Original equipment manufacturers (OEMs), banks and leasing companies, insurance underwriters, and on-demand charter operators all need knowledgeable appraisers they can trust. But what makes an individual qualified to become an appraiser? Due to the complex nature of the appraisal profession, education and experience are crucial. However, there are no legal requirements, nor license needed, so anyone can call him- or herself an aircraft appraiser, regardless of their knowledge, skills, experience, or abilities. In response, the American Society of Appraisers (ASA) established an aircraft-specific discipline and designation program, to help assure owners and financial institutions that the aircraft are accurately valued. An increased demand for aircraft valuation experts in the early 2000s mandated something more be done. And so a 2016 partnership was formed between ASA and the David B. O’Maley College of Business at Embry-Riddle Aeronautical University to establish a universally accepted industry standard. Together, they developed a series of four courses designed specifically for professional aircraft appraisers, enabling those so committed to achieve a new official accreditation. Successful completion of the courses provides participants with the necessary fundamental appraisal coursework to apply for professional accreditation through ASA, with a specialty in aircraft appraisal. The curriculum covers commercial, business, and general aviation aircraft, including fixed-wing and rotorcraft, and other aerospace assets, such as tugs and ground power units. ASA’s coursework and testing builds a solid foundation of aviation knowledge. A thorough peer evaluation of appraisal reports is then conducted before an individual can receive the Accredited Member (AM) credentials for two years of experience, or the Accredited Senior Appraiser (ASA) credentials for five years of experience. Additionally, there is a 100-hour continuing education requirement to be completed during the five years after receiving ASA accreditation. Courses and advanced conferences are offered around the globe for ASA appraisers to learn more about current issues and prepare for future valuation challenges.
CUSTOMIZABLE DATA DELIVERY SOLUTIONS JETNET API (Application Programming Interface) is a flexible application program interface that allows clients to build their own complex custom solutions powered by JETNET’s world-class data. Users can also explore and design proprietary programs to connect with and manage the data delivered via the firm’s RESTful API, including CRMs, market analysis tools, transaction trends, aircraft inventory programs, fleet management activities, or other complex applications. Be more efficient, and find answers more quickly, with JETNET API.
KNOW MORE. The World Leader in Aviation Market Intelligence 800.553.8638 +1.315.797.4420 +41 (0) 43.243.7056 jetnet.com
Business Aviation’s Most Advanced Aircraft Valuation Tool Simply enter an aircraft’s serial number online: ■ Obtain Current Market Value and Residual Value figures. ■ Compare an aircraft with all units listed for sale. ■ Predict future maintenance events and expense. ■ Value the impact of any Hourly Cost Maintenance Program enrollment. ■ Forecast anticipated marketability – and much more. ■ All information is updated daily. The same methods, techniques, and processes an aircraft appraiser would use. eValues is the only valuation tool that runs on a true Artificial Intelligence platform.
To learn more call us at (540) 905-4555 or visit our website: www.assetinsight.com Atlanta • Chicago • Las Vegas • Orlando • Portsmouth • Washington
AIRCRAFT SAFETY ■
Safety, Service, and Connectivity The Evolving Role of Flight Attendants BY AMY NELSON Cabin Management Specialist / amyk.nelson@att.net
A
w w w. B i z AvA d v i s o r. c o m
Speed Bumps
While the speed of these connective services can be a challenge due to the global positioning of the aircraft, one large “speed bump” is the amount of electronics that are actively “on” the systems at all times. A typical flight, with three crew members and six passengers, could have as many as 36 electronic devices onboard: one or two phones, a tablet, and one laptop per person. Having all these units logged in simultaneously can have a detrimental impact on the speed of the connections and on the reception, so it’s best to turn off and disconnect the Wi-Fi modes of all devices not currently in use. The flight attendants and crew often can analyze the amount of Wi-Fi and speed being used. Since modern aircraft now have such an extended range and time in the air, cabins are considered off-site offices. Concerned that the connectivity is working properly, zealous administrative assistants may send messages directly to the cockpit or flight attendant, if the lead passengers do not respond promptly to emails or messages; often forgetting that sleep is essential for the passengers to be ready for meetings at their destination. Today’s flight attendant helps to protect your well-being, as well as keeping confidential any in-flight communications. The knowledge and resources today’s flight attendant provide for you far exceeds former expectations of a smiling helper who makes a great cup of coffee. He or she is a highly-trained professional whose primary duty is your safety and security and tries his or her best to keep you connected to the “home” office. BAA AMY NEL SON , a Cabin Manager Specialist, was the Manager
of Cabin Services at TAG Aviation USA and most recently Flight Attendant Supervisor at ConocoPhillips Alaska. She holds a master’s degree from Embry Riddle Aeronautical University.
No v e m b e r/ D e c e m b e r 2 019 B U S I N E S S AV I AT I O N A DV I S O R 17
GO GO BUSINES S AVIATION
s business aircraft technology continues to evolve, so does the role of the flight attendant. In the past, the “cabin server” focused on catering and the dietary needs of passengers, as well as their comfort. Today’s professional flight attendants are trained in first aid, as well as in procedures to assist in the necessity of evacuation of the aircraft, along with its technology. (See “Taking Attendants,” BAA, July/August 2016.) Many flight attendants today choose to advance their education by completing a higher level of medical training. A number of Fortune 100 organizations now require that their flight attendants have Emergency Medical Technician (EMT) or First Responder certifications. This advanced medical knowledge available in your cabin can save your life, or that of your crew members. For example, three years ago, during a meeting of Cabin Managers, one attendee suffered a stroke. The stroke victim herself holds an EMT certification. Since this well-trained group was able to identify the symptoms so quickly, the individual received prompt medical attention afforded to only 7% of stroke victims, and recovered with no lasting damage. And since today’s cabin amenities are much more complex and technologically sophisticated, the latest iteration of advanced flight attendant training includes expertise in aircraft connectivity systems. Flight attendants’ pre-departure primary duties include a thorough review of the pre-flight safety checklists onboard the aircraft and specific to each make and model of aircraft. Today, they spend an additional thirty to forty minutes to ensure that Wi-Fi, Hulu, Apple TV, K-Bands, and all the other satellite connections are working properly and efficiently. To gain this level of knowledge of the systems onboard, they take courses offered by service providers (such as Viasat, GoGo, SmartSky Networks, Satcom Direct, and FlightSafety International) so as to become experts in the onboard systems and satellites. And they now work more closely with Original Equipment Manufacturers (OEMs), maintenance, and service providers to be able to answer your questions and ensure that all aspects of connections go smoothly while flying at altitude. Just like the intense medical training, a certification “AeroCNCT” (Crewmember Network and Connectivity Training) is offered through Satcom Direct, which meets all industry standards in a three-year span.
■ WASHINGTON REPORT
Prioritizing Safety When Chartering Instead of Assuming All Aviation Providers Are Safe, You Should Perform Some Due Diligence to Make Sure Yours Actually Is BY DAVID COLLOGAN hen choosing a charter operator, there are many different factors to consider. Customers routinely focus on price, the type of aircraft available, service, and amenities. But with more than 2,000 U.S. entities offering air charter transportation, how can you differentiate among them and find companies where safety is paramount? To make an informed choice, you need to do your homework and ask some questions. A good place to start is the website of the Air Charter Safety Foundation (ACSF) (www.acsf.aero). Under the Products & Services tab, click on “Chartering An Aircraft.” There you will find a concise four-page overview of air charter services and the role charter brokers play. Operators should be willing to answer and provide some basic questions and documents to potential customers. These include a copy of their FAA Air Carrier Certificate, their DO-85 (authorized aircraft document), and information on the types and limits of insurance they carry and who and what that insurance covers. It also can be instructive to check on the accident/incident records of charter operators, and whether they have been subject to FAA enforcement action. The National Transportation Safety Board 2019-2020 “Most Wanted List” notes that air taxi and on-demand charter providers are not required to meet the same safety requirements that FAR Part 121 (scheduled airlines) must adhere to. NTSB is recommending that all Part 135 operators “implement Safety Management Systems (SMS) and flight-data monitoring programs that address the unique risks associated with their operations.” Among many other elements, an SMS program incorporates checklists for assessing and mitigating the risks associated with any given flight. Potential factors considered include: day or night operations, hazardous terrain, inclement weather, short runways, challenging approach paths, airport restrictions, and experience levels and training standards of the pilots. Ensuring pilots have a plan in place prior to takeoff to deal with anticipated challenges is much preferable to the crew trying to cobble one together as they begin the descent to the destination airport. Nearly two decades ago, FAA and U.S. airlines became concerned that anticipated growth in flight operations would result in rising numbers of accidents in the years ahead unless some way was found to drive down accident rates. 18 B U S I N E S S AV I AT I O N A DV I S O R
No v e m b e r/ D e c e m b e r 2 019
So the agency developed a voluntary safety program, the Flight Operational Quality Assurance (FOQA) plan, which permits operators and pilots to share de-identified aggregate information with FAA. This data sharing permits FAA to identify national trends in aircraft operations, address operational risk factors, and implement corrective actions. These data also are mined by carriers to identify safety issues specific to their own operations. Airline FOQA programs have been widely adopted by U.S. airlines and select foreign carriers. They have been highly successful in lowering accident rates across the industry and focusing attention on problem areas. More recently, ACSF, working in cooperation with FAA, established a very similar program aimed at Part 135 operators. ACSF says more than 150 operators are now participating in the foundation’s Aviation Safety Action Program. “That ASAP program… has launched a whole new stream of members and activity,” said ACSF President Bryan Burns. The program began six years ago with just three operators based in the Minneapolis area. The total in mid-October was 155 and is growing each month. Of that number, 75 are air charter operators. Another 80 Part 91 flight departments also are ASAP participants because they recognize the benefits it offers. In terms of “measureable and quantifiable, when it comes to safety programs that truly move the needle of an operation as opposed to just guessing and assuming,” Burns said, “SMS and ASAP are very valuable tools. They truly improve an operation when it comes to mitigating risk.” 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.
w w w. B i z AvA d v i s o r. c o m
N ATION A L BUSINES S AVIATION AS S O CIATION
W
dlcollogan@gmail.com
3 0
Y E A R S
15,398,913 FLIGHT HOURS OF INDEPENDENT SERVICE AND SUPPORT With 30 years of proven expertise and data, we know precisely what it takes to maintain and support your aircraft at every stage of its life cycle. Acquisition advice to depend on. Maintenance programs to stabilize your budget and add value to your aircraft. Parts delivered to you on time and in budget. Leasing solutions you can rely on. Software to streamline your aviation business. IT’S TIME FOR A BETTER APPROACH.
MORE THAN HOURLY COST MAINTENANCE PROGRAMS JSSI PARTS & LEASING | JSSI ADVISORY SERVICES | CONKLIN & DE DECKER | TRACWARE JETSUPPORT.COM