Ensuring Corporate Relevance For Flight Departments

In the early 1960s, business and corporate aviation was getting its first real foothold as more owner-flown single-engine and light-twin models were giving way to professionally flown cabin-twins, turboprops and early turbojets. Light and medium twins had been staples in the hangars of even the country’s largest companies, except for a few that opted for surplus military airplanes, some of which were World War II bombers and transports outfitted with executive interiors. Those corporate DC-3s and Lodestars were then disappearing from the ramps, and industry publications were replete with advertising and news releases touting new aircraft models, such as the King Air, Sabreliner and JetStar. Learjets were several years away, and Citations would not be seen for another decade. Helicopters were a near exclusive of the military services.

While professional business pilots had been around since the 1920s, through the 1950s they tended to be former wartime squadron mates of a company executive. Long-time readers of BCA well remember the musings of J. Sheldon “Torch” Lewis in his Greenhouse Patter column, in which the lives and times of he and his fellow early corporate pilots were recounted in entertaining detail. Always printed on the final pages of each issue, most readers turned to his column first. Those who don’t remember Torch’s columns will be well served by looking them up and revisiting (borrowing a phrase from the “Lone Ranger” TV program) “those thrilling days of yesteryear.”

It was during the 1960s and 1970s that corporate aviation really came into its own. By then it was peopled with professional pilots whose skills matched those flying for the scheduled airlines but who transported the movers and shakers of the expanding corporatocracy on missions of capitalism, in their own aircraft and on their own schedules. Airplanes, systems and avionics were becoming more sophisticated; airspace more complicated and more regulated. Due to the mergers and acquisitions that were a forecast of the future, businesses were becoming larger, with subsidiary operations increasingly spread across the U.S. and beyond. The ability to fly farther, faster and in most weather conditions became more important, and business aviation was compelled to support those requirements with aircraft and aircrew able to meet those new realities.

As that new era unfolded, many corporate pilots were not even instrument rated, or for those who had been originally trained during the war, at least not instrument current. But the next decade saw a sea change as ratings and proficiency expanded to meet the increasing sophistication and capabilities of the business aviation fleet. To those then flying, it seemed as though the changes were monumental, but over the next several decades, they were to see technologies advance at an exponential rate.

As ol’ Torch might have said after a morning of EFB, NEF, FMS, PDC, EDCT, SID, LNAV, VNAV, RVSM, TCAS, STAR, GPS, ILS PRM and ASA, “You know, Hersch, the days are clearly over when we could just fire up the old girl on 30 minutes’ notice, fly over to Chicago and land.” He might even have mused about whether, given the rate that aviation was depleting the world’s supply of acronyms, there would be any left for use by our grandchildren.

The role of the pilot within the corporate organization has also changed. In the early days, it was usually just one pilot and an executive or two on board. Suddenly, even companies with piston or turboprop aircraft were using two pilots for the enhanced safety, improved efficiency and lower insurance rates that resulted. As the size of the corporate organization grew, its aviation operation also expanded commensurately and in many ways becoming a small airline not limited to just flight operations, but including dispatch, maintenance and line functions. The average flight department was no longer a one-man band, foretelling the trend that continues to this day.

One result of this evolution is that all members of a modern flight department must appreciate their roles within it and the broader organization. Flight department managers are responsible for the establishment of standards, training, oversight, enforcement and supporting documentation to ensure the department operates well and as an integrated part of the overall corporate structure. Individual pilots and mechanics have not only departmental duties and responsibilities, but also those as corporation employees and representatives.

In some cases, that requires the political skill to stand one’s ground where an ultimate decision about safety is at issue, while presenting it to senior management in a way that makes clear no affront to their managerial authority is intended. The modern flight department must retain the authority to make safety decisions, but will be expected to justify those decisions, as are other departments in their respective areas of expertise. Most modern flight departments effectively use the policies and procedures documentation of the company — usually developed and managed by the human resources (HR) department — to define their departmental authority, and the reasons for and limitations to that authority.

There is no “one size fits all” set of criteria for how a flight department should work within its particular corporate environment, but the following are offered as a primer regarding some of the things that you might consider with respect to your flight department.

Keep your position within the company in perspective. A level of professional intimacy is inherent because of the frequent personal interaction between senior executives and flight crew personnel, but it does not imply personal friendships. You can and should be cordial, but do not lose sight of your position with the company, and maintain the professional distance that accords senior managers the respect to which their positions entitle them.

Respect your chain of reporting. Resist any impulse to jump the chain of command by bringing problems directly to senior managers riding as passengers. It is easy to rationalize that their proximity gives you direct access around your official chain of reporting. Even if asked by an executive to provide some sort of information, it is important to report that request and bring the manager to whom you report into the loop, asking how he or she would prefer to see the matter handled. Breaching corporate protocol can be the start of a very turbulent flight.

Work to establish relationships with other departments. Always working with and through your reporting point within the organization, seek meetings with executive managers who will most often use aviation services, usually including the CEO and COO. Your questions will include how the flight department can best assist the other company functions, and the implicit message is that you understand the only reason for the existence of the flight department is to support the organization.

Make clear that you want the flight department to serve the interests of the company as seen by the executive management. Do not overlook that, whether its business is in service or manufacturing, the fundamental purpose of the company is to make money. Senior managers will evaluate your department through that prism, and you must make clear that efficiency — defined as effectiveness over expense and tempered by requirements to operate safely — is also your focus.

Flight department operations will often include activities that also require involvement of the financial, HR, legal and risk-management departments. Your efforts to affirmatively reach out to the managers in these areas will demonstrate that you want the flight department to be an efficient contributor to the company’s success, and your concern as to flight department issues that also impact the work of other company departments.

Flight department budgeting is of significant importance to both the department and the company. Meet with the CFO and let him or her know that you want to develop a two-way communication protocol that allows all concerned to have a dependable budget but acknowledging the variables that make the flight department unique. If the CFO understands how unforeseen expenses can occur in the context of Airworthiness Directive compliance requirements, or engine issues, it allows the finance department to structure a reserve fund or other mechanism in advance to cover such contingencies. This approach is far superior to first educating the finance department about such things after the unexpected expense arrives without notice.

Often the flight department will learn through industry trade associations, publications or other information sources about pending legislation that may impact the way in which tax laws affect the ownership and operation of the company aircraft. Such information should be shared promptly with the finance department. Let the CFO know that you would like to work with a team of people from both the flight and finance departments on budget development, and for the purpose of quickly bringing the finance department into the loop if and when circumstances change from those assumed in the budgeting process. For example, world events may indicate that fuel expenses could increase beyond the forecasts originally used for budgeting.

Executive management and finance are always concerned about presenting earnings forecasts to the market that are borne out by financial results. Your efforts to help provide data that allows finance to stabilize the sometimes less-than-stable realities of aircraft operation will demonstrate your interest in the company beyond the hangar walls.

A recurring problem across the industry is that flight departments somehow slip through the cracks where HR is concerned. This is most often because the department is located away from the main company premises, coupled with its characteristically lower number of employees.

The unique requirements for aviation professionals also present some issues that are different from the normal processes of evaluation and hiring. More than a few flight department managers have been distressed to learn that HR has hired a new crewmember absent any advice from the department itself as to qualifications or experience requirements. Affirmative efforts to educate HR employees in advance will help to ensure that the standards and processes used to locate, interview and hire for the flight department will include its input.

Federal and state laws—and regulations promulgated under and in support of those laws—apply to the flight department as they do to other departments of the company. Those laws and regulations are diverse, and the specialized knowledge of HR personnel can be critical to operating legally. Everyone has heard about the Occupational Safety and Health Administration (OSHA), and most aviation professionals know there are federal regulations of the Department of Transportation addressing hazardous materials. But few know the extent of those requirements, or the myriad laws and regulations of federal and state agencies that govern employment practices.

Consequently, manuals must be developed, approved and maintained, including requirements for training, record-keeping and the reporting of defined events. Which laws and regulations apply depends upon the state in which you are located, and specific facts, such as whether a fuel farm or maintenance facility is operated to support your aircraft. A working relationship with HR can be the key to avoid becoming an embarrassment to the corporation. In too many cases, the failure of the flight and HR departments to effectively interact on such issues first comes to light in the context of regulatory violations, appearance in an administrative law court and fines.

Insurance issues are usually within the province of legal or risk management, and it is axiomatic that aircraft operation presents insurance issues different from those of other departments. Flight department audits routinely reveal problems with insurance that range from modest administrative oversights to failures to meet basic conditions of the insurance contracts that could result in a failure of coverage. Too often, such audits occur in the wake of a coverage denial. A general rule is that lawyers and risk managers know little about airplanes, and pilots know little about insurance. It is essential they work as a team so the intended coverage is in place and operations are conducted to ensure coverage will apply in the event of a loss.

Do not oversell your areas of expertise. A pilot is often presumed to be an expert in everything aviation, from aircraft evaluation to tax laws and accounting regulations relating to aircraft use. Resist the temptation to give advice beyond your actual areas and levels of expertise. If you are aware that proposed or newly enacted legislation may be relevant, do not stray too far beyond the flight deck in an effort to seem more knowledgeable than you are. It is best to raise the issue along with the suggestion that the legal and finance departments investigate and determine the potential applicability.

Even when asked about things that are closer to flight department operations, such as the evaluation of a new or different aircraft type, it is best to not “shoot from the hip.” Rather, note that there are many issues to consider, offer to pull together some preliminary data, and suggest a team of people from at least the flight, finance and executive management areas should work on the matter. Team with a reputable consultant to be certain that all possible issues are considered.

You might have a favorite aircraft model or brand, but do not confuse your personal preference with what is best for the company. Be cautious about over-reliance upon any single source of data, even that from a manufacturer. Executives take this type of approach when evaluating the acquisition of a subsidiary or the construction of a new building and will appreciate your similar conservative professionalism.

Ensure that professionalism and ethics guide operations. There have been many changes to corporate flight operations over the past six decades, but safety and efficiency continue to be fundamental for any flight department managed and operated with beacons of professionalism and ethics at its core.

Operations must always be conducted in a good faith effort to comply with all laws, regulations and good operating practices. Department personnel must understand that a single failure of professionalism or ethics can result in corporate ramifications far beyond an FAA enforcement proceeding or NTSB accident investigation. A high-speed pass at a remote airport, falsification of documents or attempts to work around charter regulations can have disastrous effects on such seemingly diverse factors as corporate share price or a potential merger.

Evolution exists in business, just as it does in nature, and a flight department that does not evolve to conform to the tenets of the modern business enterprise may find itself extinct — replaced by a “jet card.”