Aviation will always be in the cross hairs of those who do
not fully understand the value of the benefits and see the plane as a
luxury. While study after study has
proven that those with a plane produce higher revenues, grow faster and have
better returns for their investors, to a small vocal few, it falls on deaf
ears. More needs to be done to
incorporate modern productive/human capital valuations that can be used in NPV,
IRR and CBA analysis. Methodology that
investment bankers and accountants can use in valuing human capital in other
business enterprises is in desperate need to be utilized in our industry.
The high visibility of the plane has always been a flash
point for emotional versus objective decisions.
The last 7-8 years we saw just how negative the politics of guilt by
association can be with comments like “fat cats” and their tax savings and the
Big 3 automakers huge blunder. The
blunder wasn’t showing up in their planes, but not knowing how to defend their
use in black and white terms that would have made the question of why they flew
to the meetings silly even to the non aviation community. Private aviation became politically
incorrect.
The National Aviation Business Association (NBAA) has
commissioned studies regarding how to calculate productivity by time savings,
work environment etc. and yet it never reaches mainstream benefit analysis in
the form of calculating revenues. The
story becomes a discussion of the chicken and the egg, which came first,
success that allowed them to buy a plane or success because they purchased the
plane?
Return On Investment (ROI) for human capital is not new,
however it is getting much more refined for calculating the value of human
capital in a company. The management
axiom, “what can be measured can be managed” needs to become mainstream in the
corporate aviation world. Developing
productivity or human capital returns should be a goal to corporate aircraft
operators to prove the value in more black and white terms. More productive time should not be as elusive
as it seems to be to calculate and used for productivity measurements.
My challenge to those who are in positions of influence
within our community is to continue to strive and update methods that can
calculate the value of the plane. There are plenty of bright people who
calculate various efficiencies and productivity in the business world. ROI of human capital is one method that
should help. Our industry needs to develop
an accepted model that companies can use to take the plane from being
considered a toy to the real business tool it is.
Mike McCracken
President
Hawkeye Aircraft Acquisitions
Office 727 796 0903
"Jets without Regrets"
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