Understand your jet’s operating costs to make informed financial decisions and maximize the efficiency of your aviation operations. Most variable costs depend on the specific make and model of the aircraft, with fuel and maintenance being the two most significant expenses. Fixed costs, on the other hand, are influenced by the aircraft’s size, capabilities, and overall value. For instance, a transcontinental business jet incurs higher fixed costs than a light jet due to the complexity of its missions and the required expertise for operation. Continue reading to learn to understand your jet’s operating costs more effectively.
Most of the variable costs are directly related to what make and model business aircraft you fly. That’s because the two most significant variable cost categories are fuel and maintenance. But when it comes to fixed costs, their magnitude tends to be related to the size and capability of the aircraft, along with the value of the jet.
For example, a transcontinental business jet will see much higher fixed costs than a light jet because of the complexity of the mission and the skills necessary to operate the aircraft.
One of the most significant fixed costs within aviation should come as no surprise – salaries. Depending on the mission, utilization, and number of aircraft, your aviation department may consist of the following professionals:
- Pilots
- Maintenance engineers
- Dispatchers
- Safety officers
- Support staff
- Administrative and scheduling staff
Along with employees comes the need for human resources, payroll & accounting, legal, and management. Some of the management may be within the aviation department. Sufficiently large organizations may have individuals serving as:
- Flight Department Manager
- Chief Pilot
- Director of Maintenance
- Director of Safety
- Director of Training
- Director of Scheduling
- Office Manager
Conversely, I have also seen Flight Departments consist of one full-time pilot who flies, schedules the aircraft, and even does some routine maintenance.
There are two recurring staffing questions, namely: how many pilots are needed, and why hire a maintenance person when your home airport has a qualified facility? Let’s tackle each question in turn…
How Many Pilots do you Need?
The first consideration you need to make when ascertaining the number of pilots you’ll need is the desired operational schedule. Is it a 24-hour, 365 day per year schedule, or will you usually be flying two or three days per week?
Here in the US, a 40-hour work week year-round constitutes one Full Time Equivalent employee (1 FTE). This FTE may be two 20-hour a week employees.
Employees require time off for holidays and vacations, while at a minimum, pilots and maintenance professionals also need days for recurrent training. Sick days are a factor, too. One year of 40-hour weeks is 2,080 annual hours. Subtract at least four weeks’ vacation (160 hours), three weeks for training (120 hours), two weeks of sick time (80 hours) and 88 or more hours for public holidays and you net 1,632 work hours for 1 FTE.
If you have a fleet of aircraft – like a fractional or larger charter operator – and you can have a set schedule, utilization may drive your flight crew FTE. As an example, the major US airlines can achieve about 700 annual flight hours per pilot. If the flying is mostly on-demand, a pilot FTE may only be able to fly 400-500 annual hours.
Do you Need to Hire a Maintenance Professional?
Having in-house maintenance staff is like having your local fire department split into several small companies. Your taxes may be less if there was one large, central fire department in the center of the city, but when you have a aire, you want a rapid response!
Having in-house maintenance staff gives you the dedicated response you want, and also someone who knows your aircraft intimately.
Small flight departments (1-2 aircraft) that have good maintenance service at their home airfield can generally get away without having in-house maintenance and still maintain a high level of service.
An example of this was a single aircraft operator I came across in Houston, Texas. His hangar for the Learjet he operated was located next to a fully qualified maintenance facility. He enjoyed a high dispatch reliability and reasonably fast response times because of this fact and needed no in-house maintenance support.
Another operator, also with one aircraft, was based at a small airport in Connecticut. The preferred service station for their aircraft was in Wilmington, Delaware.
Thus, the flight operation maintained a high level of service and avoided the added cost of extra maintenance ferry flights for routine, minor checks saving on operating costs.
Larger operators (and those smaller operators lacking qualified and responsive maintenance at home) are generally well served by in-house maintenance staff.
With a large operator’s fleet of aircraft, the learning curve is such that in-house staff can quickly become very proficient at the routine tasks, know the aircraft history and will be there when you need them to be there. Just the cost of avoiding a delayed or canceled flight can pay for the cost of the staff.
Flight Department Staff Salaries
Industry experts from the airline and General Aviation industries agree that during the next decade, and possibly longer, we will continue to see shortages of aviation professionals. It takes time to select and train these individuals.
The pilot just obtaining their pilot certificate this year won’t see the left seat in a business jet until 2030 and beyond, translating to increased salaries being commanded by existing skilled individuals.
Salary surveys such as the NBAA Compensation Survey (https://nbaa.org/flight-department-administration/compensation-survey/) are a good start for understanding what these positions command.
Yet, even if you avoid having in-house staff because you decide to use the services of a qualified aircraft management company, that management company will still face the same issues and concerns, charging you accordingly.
Do your homework. Instead of taking a penny-pinching approach to the operation of your aircraft, look to what serves your requirements the best!
Original article published on avbuyer.com
