Is Bizav the Key to Economic Recovery?
The impact Covid-19 is having on virtually every industry is jaw-dropping and almost inconceivable. And, as it has been widely reported, the aviation industry has been one of the hardest hit.
While aviation on the whole is in the throes of a catastrophic downturn, certain facets of the industry may be a key to economic recovery.
As I see it, the value of business aviation and the corporate aircraft has never been greater. This segment will likely be a critical catalyst to the resumption of business when the travel bans are lifted.
Out of the gate, I think we have the means and wherewithal to help considerably as this country and the world at large try to recover economically. So, from that hopeful perspective, the “silver lining” is that business aviation is very likely a good sector of this industry to be working in.
The “New Normal”
Aviation has had its historical ups and downs as an industry. On the downside, in 2009, fueled by three automakers’ trip to Congress, our industry was vilified. But here in 2020, the bizav industry sector appears to be a key element to economic recovery from the pandemic shutdown.
Once shelter-in-place recommendations are lifted, I believe the business aviation industry will come back into a position of strength. And wisely so, the majority of Part 91 in-house corporate aviation departments are putting a high value on business aircraft and the critical role they play in the wake of any emergency.
As most of us are aware, at the onset of the pandemic, business aviation was tapped to fly to destinations to pick up employees and family members, and charter service increased exponentially. Now, however, flights are down 70-80 percent.
Aircraft movements occurring now are mostly related to supply chain activity and transporting key business leaders to Washington, DC. We are also seeing a limited number of personal trips—e.g., moving people from one home to another, or in response to major family issues.
Recommendations to Consider
So, I spoke recently to a few business aviation leaders, and the following are some of the suggestions they gave to either get some momentum going or build on what’s already stirring:
- Do your utmost to keep your team intact, and help them stay focused on morale. You’ve worked really hard to create a great team. So don’t jeopardize it.
- Remember, leadership matters. Every department manager has the responsibility to be the cheerleader in their respective organizations. Now more than ever, a proactive department manager should be working closely with their reporting executive to ensure that the department is aligned with the company, and that the company has a full understanding of the value and opportunities the department can deliver, during this crisis and afterwards. Likewise, they need to be open and transparent with their team about the realities of their individual companies and what to expect in the post-COVID world.
- Communicate with your team often, and be as transparent as possible. Working from home? Host virtual video calls and meetings. Brainstorm ways to be creative to get the aircraft back to business.
- Align with the corporation. Now more than ever, aviation needs to be in lockstep and ready to serve the organization to help bring in revenue. Creative, “out-of-the-box” thinking on travel may be necessary. This is a great time to reinforce the value of business aviation to the organization.
Unique Bizav Challenges to Consider
The current situation poses some unique challenges and some critical questions arise. How, for example, does what’s going on affect the talent shortage?
As we know, most hiring is on pause. But our business aviation employees are more critical than ever, and in most corporate departments, we are not looking at layoffs or furloughs. However, there are some exceptions, especially in the areas of hospitality and entertainment.
I was recently asked if it’s now possible to get a “bargain” on a pilot at a reasonable rate? My answer was “Sure, but it may only be a bridge job, and that pilot will leave as soon as he or she can, taking your training investment with them.”
But when things reopen, you’re likely going to see a pile of resumes from airline pilots. There will be available talent in the market in the short term, but be wary of the fact that, as I mentioned above, airline pilots might not stay long-term. They will still probably require type-ratings, which are costly and take valuable time. And, when the airline needs them back in a few years—and they will need them back—they will make it quite attractive for them to return.
Predicted trends in pilot attrition won’t alter considerably once we get back to work. By our calculations, even since the mid-March shutdown, at least 300 airline pilots have hit the age 65 mark and have been taken out of the talent pool.
That calculation is based on data from Future and Active Pilot Advisors (FAPA) Founder Louis Smith. Smith has recently published research that indicates more than 2,000 professional airline pilots will retire in 2020. The trend increases for the next five years until it peaks with more than 3,100 pilots annually reaching their mandatory retirement age of 65. Those numbers remain high through at least 2034, Smith says.
So, the talent imbalance, while now upside-down, will likely right itself in a few years. Therefore, it’s more important than ever that we continue to maintain the progress that has been made in business aviation compensation, for all roles, making business aviation the career of choice.
Regarding trip planning, in multinational companies, there will be a healthy demand for international business travel, but logistics will be vastly different, and more complex. Aircraft cleaning, and flying with two pilots for every one needed are just a couple of developments we’ll have to take into consideration in this “new normal” environment. What’s more, approved users of business aircraft may likely expand to other areas of the organization that relied on airline travel.
Is Bizav the Key to Economic Recovery?
The bottom line, in my viewpoint, is that when we come back to being “open” again, business aviation will be in high demand. After all, it will be easier to use private aircraft versus the airlines.
But travel won’t be the same; it will require some significant change and creativity. There will be a whole new playbook. Perhaps we’ll fly longer hours, or fly out and back in one day. Maybe we’ll focus on domestic travel until international flights open back up. One thing is for certain, executives will want more than ever to visit their employees, vendors and partners. But will those people be willing to receive them? Time will tell.
Right now, there are more questions than answers, but as time passes and we gain some insight into this situation, we may indeed find ourselves poised to recapture some success. Let’s all be ready for it.