Overseeing the Flight Department Part II: Know The Numbers

Author By Steve Brechter

In our first post of this three-part series, I revealed the first four steps to becoming an effective Business Aviation Reporting Executive,  and how the role doesn’t have to be viewed as a “death sentence.”

During the initial onboarding period for a new reporting executive, we discussed the need to:

  1. Connect with the flight department team
  2. Learn more about aviation’s value proposition
  3. Know the business aviation industry
  4. Understand your role (and how to build trust)

Now, the next big step is to know the numbers.

1. Develop a monthly reporting format

Under our leadership philosophy, the Aviation Reporting Executive is not the doer.

Instead, you’ll want to delegate all of the doing into the organization.

If not, how will the members of your company’s flight department team develop and grow as professionals?

But, you will need to understand the numbers, or the operating performance of your flight department, at a high level.

The key is to not become a pain in neck about the minutia. You don’t want to be that guy who constantly pushes, pokes and probes. It will only undermine your relationship with the flight department leaders.

That means you’ve got to develop trust and realize that your Aviation Director knows what’s going on.

Your role is to focus your efforts and conversations on the big cost buckets—like headcount and fuel, which by the way, are the biggest components of your direct operating costs.

In order to keep things at an appropriate level of detail, you and the Aviation Director can work shoulder-to-shoulder to create a monthly reporting format or template for a set of metrics that you’re both comfortable with.

Agreeing upon a template to communicate the numbers is essential to building trust.

The Director should be able to present the report and look at you, square in the face, and say, “I’m confident that these metrics accurately reflect the pulse of the organization.”

Then, as the Reporting Executive, you should be able to review the report and, with a quick pass of the eye, reply and say, “Ok, I get it; we’re on target this month. Congratulations to the team.”

  • Where is the flight department with respect to its Operating budget performance and Capital budget?
  • What are you undertaking operationally and are you on track for the year?
  • How is your customer satisfaction?
  • What is your dispatch reliability?

2. Know the ‘why’ behind the metrics

At Gray Stone, we often ask our clients, “So what?” and “With respect to what?”

Why are you measuring such and such? Is it because something is a cost driver? Or a customer satisfaction driver? You’ll want to attach a specific meaning to each and every metric.

“With respect to what” means asking yourself if the metric or measurement in question is related to an internal corporate requirement, such as a budget?

Or is it based on an external driver, such as an industry benchmark?

Performance benchmarking against other flight departments in your industry is a best practice.

3. Minimize surprises with financial forecasts

Here’s where the flight department team demonstrates that they know not only where they’ve been but know as well where they’re going to be at the end of the quarter or year.

It’s a good idea to express operating metrics graphically to not only show what happened yesterday and today, but to extrapolate or forecast where you’re likely going to be at the end of the reporting period.

This is essential for the Reporting Executive and other corporate leaders to know. Nobody likes surprises, so the Aviation Director needs to be comfortable expressing this information with precision.

As long as you’re able to predict future, the chance of surprises is reduced. Which gets us back to building trust in the team.

The last thing you want to do the day before the quarter closes is tell the CFO or CEO that you need to spend another $150,000 to repair the APU on the Falcon during the last quarter of the fiscal year.

In a recent article, we specifically address how to communicate with CFOs and minimize financial surprises—especially when it comes to maintenance.

4. Create a solid planning process

Another best practice is to collaborate with the Aviation Director and establish a good partnership of planning, especially when it comes to capital expenditures (CapEx) and operational expenditures (OpEx).

Where is the flight department going to be this year or in three years? What expenses need to be planned for in terms of scheduled maintenance, equipment upgrades mandated by regulation or necessary refurbishment?  It’s important that you are aware of the flight department’s planning process, and become a partner in that process.

Remember, your role as the Reporting Executive is not to do the Director’s job for him or her.

Rather, your job is to become a champion for the flight department, and socialize the messages to the rest of the senior leadership team.

This is best done by putting the right team in place to do what they do best: run the department like any other business unit at the Company. Because that’s what it really is.

Next, check out our third and final post of this series on fleet utilization and planning.