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Gray Stone provides a wide range of custom business aviation consulting services. We help our aviation clients run their aviation operations as a 'business within a business,' enabling them to reach ever higher levels of operating and financial performance.
Our broad range of financial and operational experience - from the boardroom to the flight line - helps corporate flight departments, fractional operators, aircraft management companies and business aviation service providers achieve the results they desire.
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From selecting the right aircraft for your mission to ensuring you have the appropriate resources to keep it flying safely, Gray Stone Advisors guides your company in the many decisions necessary in operating a business aircraft and helping it to achieve its greatest potential. Here are some important questions you should be asking:
Many corporations and high net worth individuals enjoy the benefits of their own business aircraft. After all, in terms of flexibility and creating more usable time, what’s not to like?
For many, however, there actually is a lot not to like, primarily related to the selection of the aircraft and the support that surrounds its use.
Operating an aircraft is typically not a core competency of the business or individual who uses the asset. The good news is that by asking some basic questions, the owner or operator can gain confidence their aircraft is utilized in an efficient and effective way.
Regardless of whether you operate one aircraft or a fleet, stay tuned for upcoming posts on five questions to ask that will get you on the right track.
Unless you outsource the operation and maintenance of your business aircraft to an external aircraft management company, you’ll need someone to oversee those functions.
In the past, aviation leaders were selected primarily based upon technical skills; for instance, if s/he was a good pilot or maintenance technician. The implicit assumption was that good technical skills would translate into good leadership skills.
That approach may work for a small operation. If you operate several business aircraft, though, and employ a flight department, it can be problematic. The larger flight departments of today are actually a ‘business within a business.’
Similarly, the leaders of today’s high performing business aviation operations more resemble ‘general managers’ than ‘super chief pilots’ and the required competency set has shifted dramatically. They must be just as comfortable speaking the language of business as they are the technical side of aviation.
The best way to get the right person leading the aviation operation is to use ‘competency-based’ recruiting. Make the selection based upon a carefully crafted, aviation-specific role description that contains a balanced set of technical and leadership competencies.
Technical skills in business aviation are in great abundance, but leadership skills are not. With the properly selected leader at the helm, however, your aviation operation will run like a Swiss watch.
In a large corporation, use of the company aircraft has been historically limited to its most senior executives. That is certainly one way to look at it, especially when you consider the value of the time of the company’s most senior executives.
But a more meaningful way to answer the question is from the perspective of ‘value creation.’ In other words, in what ways does the aircraft provide value for the enterprise?
For instance, during the height of the pandemic, medical companies producing vaccines found they had to move doctors and drug samples for clinical trials much faster than commercial airlines could accomplish. Due to the incredible value to the company in receiving early ‘conditional approval’ for use, the list ‘authorized users’ of company aircraft was expanded to include those employees involved in the vaccine trials.
Think carefully about how the use of business aircraft can produce value for you and your business. Aviation should be considered as a ‘strategic business partner’ in order to provide the most return on the investment.
Selecting an aircraft is often a subjective decision, made based on recommendations from business associates or a positive experience on someone else’s business aircraft. However, objectivity really is the better approach.
If you already operate a business aircraft, start with a careful review of its use over the last 12-18 months. Review stage lengths, travel origins and destinations, passenger load, et cetera. Also take a look at projected use on a going-forward basis.
If you’re new to business aircraft, only look forward. Take the time up front to make some careful assumptions to develop a precise depiction of probable travel patterns and, therefore, a good sense of what aircraft type you really need.
We recommend having an ‘evergreen’ fleet plan always at the ready that clearly depicts the latest utilization profile and base your selection from it. While there’s often a difference between ‘want’ and ‘need,’ it’s always best to start with a clear focus on the latter; that is, what the data or your assumptions are telling you.
This is perhaps the most often misunderstood aspect of operating a business aircraft, and the answer depends upon how the aircraft will be operated.
Is your intended operation all-domestic, or do you plan to occasionally travel internationally as well? Will you need to augment crews due to duty-time considerations? Is your flight schedule predictable, or are last-minute pop-up trips the norm? Will you operate with long crew duty days, necessitating early departures and late-night returns?
Another important aspect to consider when determining pilot staffing levels in business aviation is that ‘days of aircraft use,’ not flight hours, are the most important variable. If your crew flies two hours in a day – one hour-long leg early in the day and another late in the day, for example – that’s a full duty day, not merely two hours.
All these questions, and many others, factor into your required support structure. You would do well to enlist a trusted aviation advisor to review your crewing needs from an analytical perspective and determine which tools best suit your needs and mission.
The first step is to ensure you have an annual operating budget in place to support your aircraft and that those who operate it understand an important part of their job is to operate safely within its boundaries.
Individuals should retain the services of a trusted aviation advisor to help set up a detailed annual operating budget. If you’re a corporation, be careful, as most aviation operations are required to use the General Ledger (GL) Account structure employed at the corporate level.
This rarely works, though, as most corporations make relatively few purchases, but at very high dollar amounts. The exact opposite is true for aviation operations, which make many purchases at relatively low dollar amounts.
Make ‘budget owners’ out of those who operate your aircraft. Develop a Chart of Accounts to support an aircraft operating budget with the requisite granularity, mapped back to the high level Corporate Account structure, to properly measure monthly ‘variance to plan’ and to benchmark best practices in the industry from a fiscal perspective.