NOVEMBER / DECEMBER 2020
2021 Trends, Trials, Triumphs
Business Aviation Trade Associations Working for You
Simplifying Safety Managing Your SMS Data RETURN TO LENDER NPO, NGO, VPO, GO! CLOUD STORAGE WASHINGTON REPORT A Business Aviation Media, Inc. Publication
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PRAETOR 600: CERTIFIED OUTPERFORMANCE. Announcing the certified Praetor 600, the world’s most disruptive and technologically advanced super-midsize aircraft that leads the way in performance, comfort and technology. Unveiled at NBAA in October 2018 and now certified by ANAC, FAA and EASA, the Praetor 600 did not just meet initial expectations, it exceeded them. Named for the Latin root that means “lead the way,” the Praetor 600 is a jet of firsts. It is the first super-midsize jet certified since 2014. The first to fly beyond 3,700 nm at M0.80. The first with over 4,000 nm range at LRC. The first with full fly-by-wire. The first with turbulence reduction capability. The first with a cabin altitude as low as 5,800 feet. The first with high-capacity, ultra-high-speed connectivity from Viasat’s Ka-band. And all of this, backed by a top-ranked Customer Support network. Learn more at executive.embraer.com/praetor600.
L E ADI N G T H E WAY
November / December 2020 • Volume 7 / I s sue 6
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F E AT U R E S
2021 Trends, Trials, Triumphs 06 BizAv Trade Associations Working for You
by TR AC E Y C H E E K
Simplifying Safety 08 Managing Your SMS Data
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by S TE V E BRUN E AU
Return to Lender
Nine Things to Know When Leasing an Aircraft
by G EORG E K LE ROS
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Cloud Storage
The Data Revolution and Why It Matters
by RYAN D E MOOR , M BA , C A M
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D E PA R T M E N T S
Publisher’s Message 05 A Change Is Gonna Come
by G IL WOLIN
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Washington Report
NPO, NGO, VPO, Go!
Keep Your Volunteer Flights Legal
Stephen Dickson will be FAA Administrator four more years… and that’s a good thing
by S COT T A S HTON
by DAVI D COLLOG AN
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Above and Beyond 2020:
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The Information You Need, From Experts You Can Trust
www.bizavadvisor.com/podcast
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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.
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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 Scott Ashton Aerox Aviation Oxygen Systems scott@aerox.com Steve Bruneau Polaris Aero steve@polarisaero.com Tracey Cheek The National Aircraft Finance Association (NAFA) tlc@nafa.aero George Kleros Jet Support Services, Inc. GKleros@jetsupport.com Ryan DeMoor, MBA, CAM Satcom Direct rdemoor@satcomdirect.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 Ryan Waguespack • 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.
A Change Is Gonna Come While the US Election Day is past, the political debates will continue. Not debatable is that the upheaval in business aviation this year likely will continue into 2021 and beyond. Aircraft owners and users are radically changing their work environments and travel priorities. All air travel, commercial as well as business, ground to a halt in early spring. When travel gradually resumed, it was primarily for personal reasons, as aircraft owners and charterers brought family together, often to second homes in less populated areas. As health concerns took center stage, the industry responded with improved ground facility and aircraft cleaning technologies. In our cover feature, 2021 Trends, Trials, Triumphs, you’ll read that the move to stay safe brought a summer surge in flight activity. Total business aviation flights in April were down almost 70% compared with 2019. By October, activity had rebounded to only 15% below 2019, said Argus International’s TRAQPak data. This increase was driven primarily by new users of charter and jet cards, who recognized business aviation’s convenience and safety advantages. While that’s good news for owners whose aircraft are available for charter, the flip side is renewed public visibility for the industry. Media coverage cuts two ways: highlighting the industry’s travel safety and efficiency advantages, but also fueling the non-user’s negative perception of wasted resources, pollution, and exclusivity. There’s increased pressure on turbine aircraft owners and operators – and aircraft manufacturers – to reduce the industry’s carbon footprint and its dependency on fossil fuel. The response? Aggressive initiatives to increase the distribution and use of Sustainable Alternative Fuel (SAF) in support of the industry’s goal to reduce its global CO2 footprint by 50% by 2050, relative to 2005. In September, bizav trade associations, aircraft manufacturers, and service providers held a two-day Sustainability Summit webinar on SAF and its role in supporting that commitment. Politics and pandemics aren’t the only factors driving change in aviation. Artificial Intelligence combined with connectivity makes it possible to collect and analyze data in real time, enabling your flight department to make operational and purchasing decisions “on the fly.” That same simultaneous capability today also is being applied across all facets of business travel. According to Andy Menkes of Partnership Travel Consulting, all travel expenses – from commercial air, hotels, and car rentals – now can be reviewed via similar collection and analysis software, enabling your corporate travel manager to control the full range of travel expenditures before they’re incurred. This year brought dramatic changes in aviation and beyond. And while we can’t carry a tune as well as Sam Cooke in his 1964 hit, A Change Is Gonna Come, we can continue to provide the critical information you need, so you can make the best use of your investments in business aviation. Stay tuned!
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 2020 by Business Aviation Media, Inc. All rights reserved
Gil Wolin — Publisher gwolin@bizavadvisor.com
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■ INDUSTRY UPDATE
2021 Trends, Trials, Triumphs BY TRACEY CHEEK The National Aircraft Finance Association (NAFA) / tlc@nafa.aero
The National Aircraft Finance Association (NAFA) recently hosted a webinar with industry leaders: Ed Bolen, President and CEO of the National Business Aviation Association (NBAA); Pete Bunce, President and CEO of the General Aviation Manufacturers Association (GAMA); Tim Obitts, President and CEO of the National Air Transportation Association (NATA); and Mark Baker, President of Aircraft Owners and Pilots Association (AOPA); moderated by Business Aviation Advisor Publisher Gil Wolin to discuss the changing state of the aviation industry.
What are some trends – both positive and negative – that business aircraft owners and users can expect to see? ■ General and business aviation use increased dramatically since April, as have first-time jet card buyers and charterers. Initially, 90% of these flights were personal, while only 10% were for business. However, as the year progressed, while the percentage of flight activity for business increased, travel remains challenged because there isn’t a lot of business to be done. According to NBAA, larger
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international jet traffic is slow. Fortunately, these flight departments have not shut down or sold off their fleet. They are still using their aircraft for intracompany flying between and among remote facilities, while preparing to gear up to resume travel to other cities when it’s safer to do so. ■ Health and safety continue to be drivers for increased charter. Ed Bolen cited a recent McKinsey study indicating that travelers flying commercially encountered more than 780 “touchpoints” with others, while those flying business aircraft had fewer than two dozen. For that reason alone most of these new business aviation flyers already say they have no intention of returning to commercial travel. This bodes well for current owners. If your aircraft is available for charter, these new entrants will book more charter hours, helping to maintain or even increase your aircraft’s asset value. History indicates that many of those new charter users will eventually buy their own aircraft, thus bolstering the resale market. ■ Baker indicated that flight schools are reporting a dramatic increase in students, from both new flyers and those inactive pilots seeking a refresher. AOPA’s Flying Club initiative, launched in 2016, has to date created 161 clubs, serving more than 2,400 pilots nationwide. ■ As the pandemic continues, an interesting new phenomenon has emerged: people are leaving cities for remote suburbs. While they’ve w w w. B i z AvA d v i s o r. c o m
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BizAv Trade Associations Working for You
learned to work remotely, they still need mobility. Bunce indicated that the network of GA airports makes that possible, as people are using small aircraft to commute from larger city airports to their new homes.
What are your trade associations doing to support you, and business aviation in general? Illegal charter continues to be an issue in the industry. Many owners still do not understand that as soon as money changes hands, that flight can be construed as a commercial flight. NATA has been on the forefront of this issue, along with the FAA, the Department of Homeland Security, and Customs and Border Patrol, educating those who use and operate business aircraft. According to Obitts, it mostly is an issue of dealing with the “clueless and careless.” AOPA is working to inform owners about how to properly share aircraft via safe and legal “dry” (aircraft only) leases. ■ After many years of no increases, insurance rate hikes for both new and renewal policies are significant. Insurance underwriters also are discriminating against older pilots, charging higher rates and even denying them coverage. Neither AOPA nor the NTSB has found any correlation between age and fatalities or significant accidents. AOPA is leading industry efforts to fight this age bias by educating insurance providers on the facts, encouraging them to look at individual qualifications, and discussing options like training and level of experience. In some instances, owners are placing planes in aircraft management companies, while in others, operators are pooling insurance companies to share risk. In all instances, parties are working to understand the real discriminators and to find alternative ways to mitigate risk to the underwriters. Despite these efforts, NATA suggests premiums will likely continue to rise over the next couple of years. ■ Safe and efficient business and general aircraft travel depend on access to all airports, especially those with FAA-tower control. NBAA and AOPA work tirelessly to ensure those governmentfunded towers remain open and functioning, reminding authorities that they fall under the same essential regulatory requirements as interstate highways. ■ The one real positive outcome to the pandemic is an increased awareness of, and improvement in, sanitization. NATA created its Safety First Clean Initiative, creating standards for cleaning both aircraft and ground facilities, covering aircraft from landing to departure. FBOs are educating travelers with billboards outlining steps they’ve taken to keep the aircraft and their passenger lounges and maintenance hangars clean. The industry is discovering new uses for ultraviolet and ionizing sanitation procedures, and examining how HEPA filters work to filter cabin air. AOPA’s website, regularly accessed by thousands, is updated daily with a list of restrictions by state. Because of these efforts, all airports remain open today, and these new standards for cleanliness will last long after the pandemic is over. ■ The industry continues to invest in the future, ensuring that ■
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owners will have the flight and support personnel needed to continue flying safely and securely. Science Technology Engineering & Math (STEM) continues to be an important part of these efforts. AOPA’s donor-supported program has created 400 classes and introduced more than 8,000 children to aviation as a career, 25% of whom are girls and 40% come from diverse backgrounds. GAMA has initiated a Washington, DC program to help introduce inner city students to aviation, as well. NBAA recently conducted a Safety Week, focused on training, technology, and personal fitness. ■ To counter ongoing negative public perceptions of business aviation, your trade associations are assertively promoting the usefulness of the industry, advances in sustainable aviation fuel, use of composite technology, and the adoption of GPS. New efforts will celebrate advances in electric, hybrid, and even hydrogen propulsion, as well as aviation technology, such as drones, supersonic travel, Advanced Air Mobility, and particularly Urban Air Mobility – vertical takeoff and landing (VTOL) aircraft. ■ Charitable use of aircraft is increasing. In support of pandemic and disaster relief efforts, many companies are donating their aircraft and crews, moving people and supplies to areas that need it most. Bunce stated that aviation manufacturers too are responding generously, diverting their plant capabilities to making muchneeded medical and safety equipment to support health care requirements. This past year has wrought unforeseen changes, for both new and existing users of business and general aviation. We are more aware of the way we travel and conduct business. We now have an increased awareness of the value of time: the cost of time lost or wasted, and how we can travel more safely and efficiently. That bodes well for both segments in 2021, and beyond. BAA TR ACEY CHEEK is the Marketing Director of The National Aircraft Finance Association (NAFA), a professional association that has been promoting the general welfare of aircraft finance for nearly 50 years.
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■ AIRCRAFT SAFETY
Simplifying Safety Managing Your SMS Data BY STEVE BRUNEAU iven today’s tight budgets, operating concerns, and evolving communications technologies, choosing the right safety management system (SMS) is more important than ever before (See “Cultivating a Safety Culture,” BAA Sept/Oct 2020). Your SMS helps to prevent bad outcomes, and to investigate and understand the root causes of potential problems, so that you can implement effective risk controls, including policies, procedures, and training. Today, software is available which can accumulate and analyze flight data automatically to support that mission, as well as share data and insights among multiple operators. When choosing a system, consider the problems you’ll want to avoid or address. Typical challenges are: ■ Is the system highly focused on your Safety Team (those charged with administering your SMS)? Are they using it to perform their safety processing steps and manage the program? If so, your line personnel (pilots, dispatchers, and maintenance techs) and even the management team may not feel ownership of the system, rarely use it to its fullest, and/or feel it’s too cumbersome for everyday use. ■ Is the system too complex? Some systems try to capture so much data from those submitting reports that line personnel may be overwhelmed by the jargon and the amount of time it takes away from their jobs to fill out forms. Make it easy for your team to report actual or potential safety problems by choosing a system that is simple and intuitive to use. ■ Does the system interface well within your organization? Too often, safety information and systems are separated into silos. Documents, training, safety reporting, Flight Operations Quality Assurance (FOQA) data, and risk controls need to be in one place, to make it easy for your whole team to access what they need when they need it. Taking these things into consideration, ask these three questions when choosing an SMS software system:
Is It Simple?
Can it be used by the whole organization (i.e. flight operations, maintenance, ground handling, and management)? ■ Can it be used on mobile devices and computers so your mobile workforce can stay connected continually? ■ Is the software intuitive and easy to understand? Does it use the latest design, and is it simple to enter data? ■
Is It Meaningful?
Does it help your team, including contract employees and third party suppliers, perform tasks in the safest way possible? ■ Can your team easily find safety documents, policies, and procedures, and does it help them report safety concerns or problems? ■
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Will it help track any negative outcomes, such as asset damage, injuries, environmental damage, and reputation damage? ■ Will it allow you to track negative mission impacts, like flight delays, turn-backs, diversions, and cancellations; as well as deviations, malfunctions, hazards, root causes, and risk? ■ Can you easily benchmark your organization’s performance against similar organizations, to help ensure your operation meets or exceeds current industry standards? ■ Will it help you understand the cost of safety-related events? ■ Does the system have automated risk controls to help your team assess their flights and ensure everyone follows standard operating procedures to address the hazards? ■ Can the system be configured for your operation’s unique needs? ■
Is It Seamless?
Is there just one place for all safety information, without redundant data entry? ■ Does it integrate with other systems such as flight planning, scheduling, and flight data monitoring, and offer the flexibility to integrate with others? Simple, meaningful, and seamless software helps put your program on a solid foundation. With proper training, alignment of the system with your processes, and the leadership to promote and require its use, a new system will enable your operation to enhance risk management, and foster greater consistency throughout the organization. And that enables your team to spend more time focusing on the task at hand: keeping you, your passengers, and your aircraft safe. BAA ■
STEVE BRUNE AU is the Vice President of Aviation Services at Polaris Aero. With an MS in Aerospace Engineering, he previously served as COO of Pulsar Informatics, and has 25+ years of process consulting experience.
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Polaris Aero / steve@polarisaero.com
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■ AIRCRAFT FINANCE
Return to Lender Nine Things to Know When Leasing an Aircraft BY GEORGE KLEROS Jet Support Services, Inc. / gkleros@jetsupport.com
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Do … ■ Review the lease document fully to understand the operation, maintenance and return of the aircraft requirements. A good leasereturn scenario always starts with a well-defined and documented set of return conditions. Ask questions for clarification prior to signing, to be sure you fully comprehend the broad scope of your obligations. ■ Keep the aircraft clean and polished to protect from corrosion and paint deterioration. Unprotected aircraft deteriorate faster than you might expect. The aircraft interior will be inspected for wear, cleanliness, and damage. The exterior will be checked for oil leaks, paint condition, and structural damage. ■ Store the records in a secure, dry, fireproof storage cabinet or safe. Damaged or missing records devalue an aircraft and will change residual value. The lessor will come out either annually or bi-annually to see the aircraft and review the records for accuracy and airworthiness. ■ Keep up with routine and scheduled maintenance tasks, even if the aircraft is not flying for extended periods of time.
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■ Address interior and exterior wear items immediately. Waiting can compound the problem and cost more to correct.
Don’t ... Assume the lease document allows for the aircraft to operate under different regulations or use than originally defined. If the aircraft flies only for you under FAR Part 91 regulations, don’t move your aircraft into a for-hire Part 135 air-taxi arrangement without consulting the lessor; it may not be allowed. ■ Leave the aircraft outside. Store it in a hangar when not in use. Sun, humidity, and high temperatures deteriorate interiors and paint exterior, diminishing the residual value. ■ Let the aircraft sit inactive for long periods of time. Your aircraft still needs to be flown and systems exercised to keep systems lubricated and reduce risk for damage. ■ Ignore missing paint and erosion strips. This leads to corrosion and will be expensive to correct. The lessor always requires hull insurance at a specific dollar amount, and generally seeks high liability insurance limits. If you acquire an hourly cost maintenance program (HCMP), it can help ensure that the aircraft meets return conditions. The lease should state clearly that the maintenance program was current at lease inception and that the HCMP will be transferred to the lessor. An HCMP is very desirable in a lease transaction. It helps preserve the aircraft’s residual value, and helps you avoid penalties and extra costs. BAA ■
GEORGE KLEROS, Senior VP, Strategic Fleet Management
and Fleet Support for Jet Support Services, Inc. (JSSI), has more than 30 years of experience in Aviation Maintenance, Management, and Field Support Services for business jet aircraft.
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hen leasing an aircraft, what are your maintenance obligations during and at the end of the lease term to ensure that the returned aircraft maintains its value? Focused on that residual value, the lessor will designate a qualified inspector or auditor to perform periodic records reviews and/ or asset inspections, throughout the lease period. The intent is to verify the aircraft’s general condition and ensure it remains in compliance with lease requirements. After each check, the inspector will send the lessor a report with the graded condition of the aircraft and any specific findings. If anything can or might affect the residual value, you’ll be required to take corrective action to bring the aircraft into compliance. At term end, the lessor will conduct an “off-lease” inspection (similar to a pre-purchase inspection) at a factory-owned or authorized service center. All components and systems must be in full working order; or repaired if not. If the major components are near their life limit, you’d be responsible for covering these costs: either a pro-rated percentage based on time consumed, or 100% of the cost to overhaul if it’s close to the event. If the aircraft requires repairs for damage or corrosion, you are responsible for the repair cost. Once any repairs required by the lease are completed, any diminution in value due to damage history will be the lessor’s responsibility. So what can you do to preserve the value of the aircraft?
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■ AVIATION LAW
NPO, NGO, VPO, Go! Keep Your Volunteer Flights Legal
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BY SCOTT ASHTON
Aerox Aviation Oxygen Systems / scott@aerox.com
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“Assuming the flights are incidental to the operator’s primary activities, there is no issue in general with this structure,” said aviation attorney Paul A. Lange. “The aircraft owner in this case is directing the flight, paying all the costs, and choosing which charitable flights to conduct. As long as the operator is not accepting any compensation for the flight, the flight is legal even if the owner’s pilots are being paid by the owner.” Lange cautions, however, that even slightly altered facts can quickly push you into the realm of illegal charter. It’s always best to consult your aviation counsel before conducting any VPO flights. Charitable flying reflects the best of the business aviation industry. Using our time, talents, and aircraft to bring relief to those in need is very rewarding. Just be sure that the only compensation you receive is the gratitude of patients and families, or of disaster victims receiving supplies. That is compensation enough! BAA
SCOT T ASHTON is President and CEO of Aerox Aviation Oxygen Systems. He is an ATP rated pilot and serves as a volunteer pilot and Board Member of Patient Airlift Services (PALS).
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s an aircraft owner with a small FAR Part 91 flight department, you’ve been approached by a friend who’s been flying for one of the Volunteer Pilot Organizations (VPO), to get you involved. The missions sound compelling – using your aircraft to provide transportation for those in need aligns with your charitable nature and you look forward to participating in such a noble mission, so you sign your flight department up with your local VPO (See “Care and Share in the Air,” BAA March/April 2019). You are well aware that receiving compensation for providing transportation to the public creates an illegal 135 charter situation. But can using your aircraft for volunteer flying create a situation that is, in fact, illegal charter? The answer is yes. However, with an understanding of specific FAA legal interpretations, it is easy to do good while doing it right. First, as the aircraft owner and operator, you must pay all costs associated with the volunteer flight. You cannot accept free fuel or any other kind of financial (or non-financial) compensation. Even charitable fundraising cannot be used to subsidize your flights. Of course, fundraising can support the organizations that arrange the flights, but you cannot create a contribution fund among your friends to help pay for your fuel, even if the funds go directly to the FBO and not to the operator of the aircraft. In fact, until a 2005 FAA ruling, you could not even take a tax deduction for the cost of the flight. Of “compensation for hire,” the FAA says: “It does not require a profit, a profit motive, or the actual payment of funds. Instead, compensation is the receipt of anything of value (FAA emphasis).” “Anything of value” is broadly interpreted to include free flight time or even business goodwill. If you are an owner-pilot, the rules are straightforward. With the exception of a tax deduction for the direct expenses incurred on the charitable flight, you cannot receive any compensation. As the pilot and aircraft operator, you must pay all of the expenses associated with the flight. There is no grey area. Nor can a VPO raise funds to support the operating costs of an aircraft it owns and provides to pilots to fly missions. Air Care Alliance Board member Rick Durden states: “A charity that owns an airplane to further its mission of transporting sick children for medical treatment isn’t using that airplane in a way that’s incidental to its business – it’s the core reason for the organization’s existence.” Such flying is considered air transportation for hire and requires an operating certificate issued under FAR Part 119. But what if you have a professional crew flying your aircraft and you are not the pilot? Your pilots are being compensated since they are on your payroll. Are such flights legal?
Connecting patients with the critical care they need. Wherever that may be.
PALS makes critical flights happen. To help a child battling an illness get to a doctor who can save their life. To connect a wounded veteran with a support program. Through our amazing network of volunteer pilots who use their skills for the greater good, PALS goes above and beyond to lift people up, treating every passenger on every flight with dignity and compassion. We cannot do it without you!
FIND OUT HOW YOU CAN HELP TODAY: (631) 694-PALS (7257) | info@palservices.org
Find out more at: palservices.org
Going Above and Beyond to Lift People Up
■ AIRCRAFT MANAGEMENT
Cloud Storage The Data Revolution and Why It Matters BY RYAN DEMOOR, MBA, CAM ust like industries everywhere, business aviation is becoming increasingly digitized. Data generated from an aircraft can record and relay information, in real time, on just about every aspect of the flight. Intelligently collating and analyzing these data saves money on the cost of flight operations, improves your onboard and ownership experience, and helps preserve the value of your aircraft when it comes time to sell. Until now, business aviation has traditionally used data to provide historical diagnostic reference points; but in the same way Enterprise Resource Planning software revolutionized corporate financial management twenty years ago, so the ability to automatically collect, centralize, and analyze data is revolutionizing business aviation. Transparent, reliable, timely data can give owners much clearer insight into an aircraft’s history and can answer many of the questions that influence the asset value and operational costs in a clear and verifiable way. How many hours has the aircraft flown? When is the next scheduled maintenance check? Why is the fuel burn going up? What are the monthly operating costs and what are they going to be? Which are the most expensive routes to fly and are there alternatives? These questions and a myriad more can be answered in a keystroke. New technologies that can instantly transcribe text, the evolution of Artificial Intelligence (AI), and the growth of machine learning, is making rich data analysis possible as it replaces the need for extensive amounts of inefficient human capital. After all, value can be extracted only if a distinction is made between deficient and qualified data. As the familiar phrase “garbage in, garbage out” states, inaccurate data or poor quality input will always yield flawed output. Yet when the data collected from automated entities such as aircraft platforms, scheduling systems, and financial software are centralized and verified, aircraft owners and operators benefit from a much clearer vision of what aircraft ownership looks like. Authenticated data, collected automatically as events occur and expenses are incurred, can define costs based on facts and intelligent analysis, rather than quotes and guesstimates. This creates standards enabling “apples to apples” comparisons and distinguishes between non-relevant comparisons. Through accurate benchmarking, purchasing behavior can be modified to identify budgetary savings or confirm peak performance on every action associated with a flight. Data synchronized and shared across global flight departments support even more efficient operations, improve customer satisfaction, and enhance asset management. 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 0 2 0
From an aircraft’s first digital heartbeat, technology can unify visibility into all aspects of aircraft operations now, and into the future. Data enable powerful, predictive analysis. A single data resource can provide insight for the finance department into existing and anticipated costs, and supports the ability to intelligently query supplier pricing. It can help global flight departments make decisions about aircraft or fleet optimization based on an improved understanding of upcoming needs. Pilots can use data to efficiently plan future routing to maximize fuel burn, minimize turbulence, and improve the passenger experience. IT departments can use the same data to anticipate, manage, and mitigate cybersecurity risks associated with connected devices. For those that adopt a data-led asset management strategy, the gap between the value of an aircraft with data-rich heritage and one with manually recorded logs will be immense and will only widen into the future. By increasing transparency, asset values not only are retained, they increase as capital and operating expenditure is reduced. Data are driving new standards and bring more accountability to the operations of business aviation. This stimulates demand as the asset values are better understood by all stakeholders. Considering the current state of the globe, this increase in demand could not be happening at a better time for our industry. The data revolution is here and for early adopters it is the only way to fly. BAA RYAN DEMOOR , MBA , CAM , is Manager-Aviation Tax & Financial Reporting Solutions for Satcom Direct, leading the company’s fully outsourced tax and compliance department. He also serves as Secretary of NBAA’s tax committee.
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Satcom Direct / rdemoor@satcomdirect.com
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■ WASHINGTON REPORT
Much-Needed Continuity at FAA Stephen Dickson will be FAA Administrator four more years…and that’s a good thing BY DAVID COLLOGAN ike so many segments of the U.S. economy, the uncertainties facing the aviation industry are daunting as 2021 beckons from just around the corner. The large scheduled airlines are operating only about 40% of their pre-pandemic flight schedules, and are bleeding billions of dollars in losses per month. The careers of thousands of well-paid airline pilots, mechanics, and flight attendants have veered off the runway. Following a woeful, scary spring, when demand for travel on business jets and turboprops plunged, air charter, fractional owners, and Jet Card users have returned to the market. Some operators say flight activity has stabilized at about 80% of prepandemic levels. But not all have enjoyed the same success. Demand for travel on light and medium jets has been significantly stronger than for flights on larger, longer-range jets, not surprising given the myriad of international travel restrictions worldwide. Sales of new aircraft are down significantly and layoffs have affected tens of thousands of workers at OEMs and their supply chain partners. It is clear a return to some approximation of “before times” prosperity is dependent upon the availability of a safe, proven CV-19 vaccine, and its widespread deployment throughout the population. While everyone waits for that silver bullet to arrive, there is some positive news for the aviation industry. No matter how the election turns out, the person who has been leading FAA for the past 14 months will continue to do so. Big turnover in top government positions is inevitable in the wake of a presidential election. But the FAA Administrator slot is not up for grabs in January. That is because Congress in its wisdom… (No, really!) enacted special legislation 25 years ago. Starting in the early 1980s, for a variety of reasons, the men nominated and confirmed as FAA Administrator were not staying in that post very long. By the early 1990s the six most recent appointees had averaged only about two years apiece in the job – including one who lasted just six months. The aviation industry and Congress agreed such rapid turnover at the top was unacceptable for an agency with critical and complex 24/7/365 responsibilities. So in 1996 Congress adopted legislation providing a fixed, five-year term for the FAA Administrator. When Michael Huerta’s five-year term at the helm concluded on January 6, 2018, the Trump White House did not nominate a replacement; Deputy Administrator Daniel Elwell was named acting 16 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 0 2 0
Stephen Dickson, wife Janice (center) and Transportation Secretary Elaine Chao at the August 12, 2019 swearing in.
Administrator. Elwell stayed in charge for 19 months. It wasn’t until March 19, 2019 – nine days after the second fatal crash of a Boeing 737 MAX airliner – that Trump signaled his intention to nominate former Air Force and Delta Airlines pilot and executive Stephen Dickson to head FAA. Because of partisan bickering in the Senate, Dickson was not confirmed and sworn in until mid-August of 2019 (See “Time for a New FAA Leader,” BAA, July/August 2019). Since coming aboard, Dickson has proved to be a steadying influence at FAA. He’s restructured and strengthened the rigor of FAA’s aircraft certification processes. FAA engineers and pilots have scrutinized and flight-tested the modifications necessary to eliminate the pitch-down control problems in the 737 MAX that led to two fatal crashes and the loss of 346 lives. Working with other international certificating agencies, including the European Union Aviation Safety Agency (EASA), FAA is expected to clear modified 737 MAX aircraft to return to service late this year. Dickson’s continuation in office is a huge plus for everyone in the industry. He’s kept FAA functioning smoothly despite CV-19 outbreaks and restrictions. Several important rulemaking initiatives are moving forward. Dickson has regularly communicated and met with senior representatives of FAA’s multiple constituencies and he is up to speed on the many issues and concerns facing the aviation community. 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
FEDER AL AVIATIO N ADMINISTR ATIO N
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dlcollogan@gmail.com
