Planning Supplemental Lift into Your Operation

There are five situations where the need for additional lift is not likely to be solved anytime soon. In these cases, the need may be measured in years. The required flight hours may not justify the cost of another wholly owned aircraft. In these cases, supplemental lift could also include Fractional Ownership. Following are our five scenarios…

Scenario 1: You need more flying hours, but not enough to justify adding an additional aircraft to your flight department. This scenario is especially salient for the single-airplane operation. Doubling the size (and expense) of your aviation operation for anything less than a doubling of the utilization may not make financial sense. However, if your aviation department is routinely seeing flights turned down due to a lack of aircraft availability, you will need to look for a solution.

Two trips lost per month equating to 10 flight hours adds up to 120 flight hours per year. While this is far below the financial threshold justifying the addition of another aircraft to the department, supplemental lift for those extra flight hours will allow the aviation department to meet all the demand.

Based on the above example of 10 flight hours per month, ad hoc charter will probably be an expensive solution, so either jet cards or a fractional share in an aircraft should be considered.

Scenario 2: As a bridge before the eventual purchase of another aircraft. If the flight demand is growing at a steady rate, the Flight Department will eventually need to acquire another aircraft.

Supplemental lift can fulfill any urgent additional need while the Flight Department does due diligence, planning the addition of another aircraft in advance with all of the necessary operational and financial analysis.

Scenario 3: The ability to use simultaneous aircraft. One aviation department I worked with would commonly send their aircraft to pick up major clients to bring them in for meetings, or board members for board meetings. There were between eight and ten occasions annually when they needed aircraft to fly simultaneously.

While their annual utilization for these missions didn’t justify an additional owned aircraft, in their case they had a top tier charter operator located at their home base who was able to provide for the need with a high-quality service.

Scenario 4: Personal use of the business aircraft. Personal use of a business aircraft can result in extra tax considerations for a corporation. One consideration concerns the imputed income to the user for the value of the personal use of the business aircraft. Another relates to the risk of losing some of the business tax depreciation. Both require consultation with an aviation tax authority.

One company I knew specifically offered the CEO up to 25 hours of personal use of an aircraft per year, purchasing the CEO a 25-hour Jet Card, giving a specific value to the imputed income, and preserving all of the tax depreciation on the company’s owned business aircraft.

Scenario 5: Supplemental lift for different capabilities. Supplemental lift can provide more, or less, of an aircraft than what you already have, which can be important in providing the best possible service at a cost-effective price.

We had one client who had a long-range business jet capable of non-stop trips from the US East Coast to all of Western Europe. Their business was growing towards Asia, and their aircraft could only make the Asia trip with two or three fuel stops. The flight department would also need to pre-position relief crews at a fuel stop as their aircraft didn’t have a place for supplemental crew to rest. The client believed their only option was to get an even bigger jet.

When analyzing their travel, however, it was clear the Asia trips were only needed a few times each year. 

Preferring not to spend $70m on an upgrade, the client used supplemental lift in a suitably-sized jet for the occasional Asia trips.

Conversely, sometimes the need is for something smaller – for example, when your jet is restricted to runways of a minimum length, but some of your destinations are closer to smaller airports. Why drive an extra two hours when you can land much closer? Chartering a smaller aircraft with the necessary short-runway capabilities could be an answer to that problem.

When and How to Plan Supplemental Lift Solutions? 

The assumption in this article is that you already own an aircraft. If you employ your own pilots, they’re the ones best qualified to analyze your requirements and help in the vetting of a possible supplemental lift provider.

Similarly, if you are under contract with a management company they may even have the charter ability themselves. Planning ideally happens well in advance of the need. If your aircraft is scheduled for 60 days of maintenance, this is likely to be planned months ahead - and so should the supplemental lift be.

If utilization is increasing, polling the users for their expected utilization may reveal a steady increase, a sudden jump, or a short-term need.

You also need to take into consideration the service levels and costs. If you’re evaluating adding a second aircraft instead of supplemental lift, run the numbers, plan for the acquisition, and act accordingly. And look at the legal and tax considerations.

Ultimately, with all the options for private air travel today, whether through ad hoc jet charter, jet cards, fractional, shared, or whole ownership, there’s no reason to ever not have an aircraft available to you.

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