Corporate flight departments are multi-million dollar businesses, run by multi-million, even billion-dollar businesses.
So it only makes sense that the flight department is managed using the same financial and analytical modeling tools and methodologies used by corporate finance and accounting.
In the following video, Jim Lara and Steve Brechter of Gray Stone Advisors, discuss how they partner with flight departments (and other corporate support functions) to develop these tools in preparation for the corporate budgeting and/or operational planning process.
Can’t see the video? Click here to view on YouTube. Or, read the transcript below.
Steve Brechter: Gray Stone Advisors helps flight departments with financial and analytical modeling tools by building models of what they actually do every day.
Many times flight departments don’t have those skills resident within the organization. And, therefore, when it becomes time for budgeting or operational planning, they struggle a bit.
So what we help them with is to model these major parts of their costs.
For instance, fuel modeling. We have a very sophisticated fuel model that we build for the flight department to be able to help them predict for the next year, in their budgeting process, precisely what they’re going to spend.
Jim Lara: We also find that, in many cases, the flight department doesn’t have an adequate chart of accounts to keep track of all of their spend—both on the fixed cost side and on the variable cost side.
So we work with the flight department, we work with corporate finance and corporate accounting—whether it be an SAP system, a home-grown accounting system, an Oracle system—to help them generate an appropriate chart of accounts that really serves their needs.
Steve Brechter: Another aspect of modeling, also, is the core fleet verses supplemental lift models that are out there today.
And there’s many options from—in addition to the corporate aircraft you may own—there’s charter, there’s fractional share.
And, many times, because of the specific needs of the department, a blended approach is necessary.
So we can actually go in and model what their activity looks like from history and give them a sense going forward of what the most cost-effective means to meet that demand are.
To learn more about building financial and analytical modeling tools, please click here to contact us by email or phone.