It is difficult for me to form an opinion about the financial benefits of business aviation departments. Joe Moore had discussed a Forbes article about business aviation, and it drew a comparison between share holder returns for companies with and without flight departments. The article didn't really explain why AVIATION helped produce more profit for the shareholders, it only mentioned why having a flight program could be convenient.While reading the National Business Aviation Association's website, I was able to find even more conveniences for a company having a flight department. It really seems like any organization doing research to figure out if an aviation department is beneficial for a company develops an opinion first (either for it or against it) and then finds ways of supporting their opinion by any means necessary. There are some facts that cannot be argued. Business aviation can save a TON of time. Businesses can travel whenever they want, and often to airports closer to their final destination. Their is also opportunity for companies to lease their aircraft, providing an additional source of income. However, it is difficult to find a source that outlines the exact costs, side by side, for a company's expenses if they were to use commercial aviation versus having their own airplane.
My personal opinion is a mixture of viewpoints. I am in support of a company spending money on a flight department for any reason at all (to increase efficiency, cut down on travel time, or just have fun) if the company can support it financially, even if it costs the company MORE than traveling on commercial aviation. However, I feel it was very irresponsible for the auto company's executives to fly to Washington when they asked for taxpayer bailout money. There were other means of transportation that would have cost less, and any company asking for a bailout should be saving money in any way necessary. This doesn't necessarily mean their flight programs should be shut down, but they should only be used when it saves the company money.
Even if it were to cost more money in the time companies might be willing to spend the money to save on time and efficiency. It might even look good with clients.
ReplyDeleteOn the issue of cost effectiveness, flight departments can be expensive, non-core business activities. Can a company have efficient service without having their own flight department? Is there a business case for a company to have a flight department vs. contracting the service out?
ReplyDeleteIf a business is involved somehow in politics, the political pressure can seriously jeopardize its image, even though their actions may be reasonable on paper or on the books. Such is the case with the automobile companies. Hopefully, the administration of the company can make smart decisions for their company without interference, but I'm sure that rarely happens.
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