Essex Aviation

  • Tracey Cheek posted an article
    FAQ: What is a Flight Department Review, and How Does It Work? see more

    NAFA member, Lee Rohde, Founder, President and CEO of Essex Aviation Group, Inc., discusses what a flight department review is and how it works.

    “Get a second opinion.” 

    It’s a phrase most commonly heard after a trip to the doctor’s office, but it’s applicable to almost all aspects of life. A second opinion provides fresh perspective, which can be valuable when figuring out what to do or how to improve. This is especially true for private business aviation when considering your aircraft management company or internal flight department.

    Whether applying due diligence or requesting information from your management company or flight department that might require mediation by a third party, a flight department review is an excellent way to ensure that your aircraft and the team that supports it are operating at optimal levels.

    H: What is a Flight Department?

    A flight department is the people and processes responsible for the ongoing management, maintenance and operations of an aircraft on behalf of its owner. A flight department’s responsibilities include, but are not limited to, trip analysis, ongoing maintenance, overall operations, aircraft scheduling, flight planning, crew management and so on. A flight department can range anywhere from a single pilot to an entire facility with an organization staffed by a wide range of aviation experts. 

    Although many aircraft owners choose to outsource their flight department to a third-party aircraft management company, it is possible — and common — to rely on an in-house flight department. There are, naturally, pros and cons to both options. First-time aircraft owners often utilize an aircraft management company in order to take advantage of its existing organizational structure, human resources, vendor relationships and regulatory knowledge. In-house flight departments will need to manage all of these aspects, often with the help of outside resources and the existing support available through their primary business organization. 

    Aircraft owners need to consider their overall goals and objectives in order to evaluate which option will best meet their needs. Most owners who are interested in chartering their aircraft will choose to work with a third-party aircraft management company and operate under its existing Part 135 certificate.

    H: What is a Flight Department Review? 

    A flight department review is, as its name implies, an evaluation of an aircraft owner’s flight department conducted by a third-party entity — usually a private aviation consulting firm

    During a review, a consultant will familiarize themselves with the company’s internal policies, as well as policies that ensure compliance with the FAA or other foreign aviation administration under which the aircraft operates. The primary objective of a review should be to determine whether a flight department is performing according to the standards outlined in their operating manuals, which are often contained within, but not limited to, flight operation and general maintenance manuals and safety management systems. In addition, the review should include an extensive study of maintenance records, personnel training, general organization and the level of care and custody extended to the aircraft.

    The results of this evaluation are presented in a written report to the client. More often than not, consultants have limited findings or concerns. The report will outline any findings, as well as potential solutions or options to correct existing issues. The owner is the sole recipient of this report unless they decide to authorize its release to any third parties.

    An experienced private aviation consulting firm will also share best practices and enhancements proven to be successful by other flight departments they’ve reviewed. Most flight departments are eager to share their experiences and solutions with others in the industry. Among other things, sharing best practices contributes to safety enrichment, costs savings and general efficiencies with flight operations.

    H: Who Can Request a Flight Department Review?

    A flight department review is typically requested by an aircraft owner or their direct advisor (such as a family office) as a measure of due diligence to ensure that their aircraft is being managed properly. However, an aircraft owner or advisor might also request a review if they have issues with personnel management or with certain aspects of their management company and its management of the aircraft. 

    In some cases, a management company will even request a flight department review in order to resolve a dispute with an aircraft owner. In situations like this, both parties look to the consultant to provide an unbiased review and information concerning industry best practices and procedures so that both parties can reach an amicable solution and move forward. 

    On occasion, an aircraft financial institution might request a flight department or management company review to ensure that their assets are being properly managed and operated and to confirm the aircraft records are properly maintained and up-to-date. 

    By getting a second opinion in the form of a flight department review, it’s possible for aircraft owners to ensure that they’re receiving the best service possible, be it from their management company or an in-house flight operation, and that they have a quality private aviation experience.


    Lee Rohde, Founder, President and CEO of Essex Aviation, a business and private aviation aircraft acquisition and consulting firm, has 30+ years of experience in financial and operational analysis, manufacturing, distribution and corporate business development.


    This article was originally published by Essex Aviation

     

  • Tracey Cheek posted an article
    Aircraft Leasing: The Types of Leases & Your Lessor Options see more

    NAFA member, H. Lee Rohde, III, President and CEO of Essex Aviation, shares new options available in aircraft leasing.

    Similar to leasing an automobile, an aircraft lease involves the use of an aircraft for a specified period of time without transferring the title. The owner of the aircraft (the lessor) maintains legal ownership but the lessee holds possession of it through the duration of the lease.

    Leasing can be a more attractive option than purchasing depending on the utilization of the aircraft and how it impacts the ability to take advantage of any available tax benefits. Many people choose to lease an aircraft because they are not able to take advantage of the tax benefits that ownership can provide. Aircraft used for business purposes can provide tax benefits, but personal use does not. Understanding how the aircraft will be utilized can often be one of the primary driving forces in the decision to lease or purchase an aircraft.

    The Types of Aircraft Leases

    Aircraft leases are regulated by the Federal Aviation Administration (FAA) under the Federal Aviation Regulations (FARs).

    There are several ways to lease an aircraft, all with their own unique advantages and disadvantages. We recommend consulting with an aviation advisor to determine the lease type that is best for you.

    In the event damage was to occur to the aircraft during the lease, unexpected obligations may apply to the lessee. To avoid any uncertainty, a well-drafted lease should clearly outline each party’s responsibilities in the event the aircraft does sustain physical damage during the lease term. Another important area is to understand the terms for the lease return process. Consulting with an aviation advisor can help you answer any questions you may have about a lease agreement.

    Leasing vs. Chartering

    Aircraft leasing and chartering are both practical and flexible alternatives to flying on commercial airlines. Both certainly offer a more comfortable flying experience on a more reliable and convenient schedule. Similar to deciding to purchase, the option to lease an aircraft becomes more attractive when your annual travel needs exceed a certain level or when availability of charter aircraft might be an issue. Leasing provides the ability to have direct control over the aircraft and its availability while also assuming the responsibilities of operational control.

    With private aircraft charter services, you essentially have access to an aircraft on a trip-by-trip basis but availability is not guaranteed. The decision to lease involves a long-term commitment and allows the lessee to have full utilization and operational control of the aircraft. The advantage to private charter is the ability to access a variety of aircraft models and sizes, so you can select the aircraft that best meets the requirements of each individual trip.

    Lessor Options

    With more than 70 years of combined aviation experience, Essex Aviation has worked with a variety of financial institutions, banks and other companies to provide their clients with aviation financing options for both private owners and public or private corporations.

    The various types of lessors available in the market today include:

    • Traditional banks
    • Financial institutions that provide capital through private equity markets
    • Third-party service providers who facilitate the lease between an aircraft owner and a third-party lessee, but they do not actually take ownership of the aircraft

    The new options available in the aircraft leasing market today can provide certain benefits that were not historically available under traditional leasing structures. Consulting with an aviation advisor will allow you to review all the options available and determine which may best meet your needs and desires for the aircraft you are considering.

    Returning a Lease

    Aircraft leases should have specific terms and conditions detailed in the lease agreement that will outline the requirements and processes to be followed by all parties upon the return of the aircraft at the end of the lease. It’s recommended that you consult with an aviation advisor as you’re negotiating lease terms and conditions when entering into the lease and also having them work with you when going through the lease return process.

    An aviation advisor will be able to assist and advise you during negotiations concerning the lease return inspection requirements. Additionally, during the final aircraft lease return process, the expertise of an aviation advisor can often provide alternative or cost-effective ways to resolve certain issues while also satisfying the provisions and terms of the lease return process. These advisory services can greatly reduce your organization’s cost burden of unexpected return condition requirements or issues raised at that time with the aircraft.

    Essex Aviation Group, Inc. specializes in advising and representing clients with various aviation services including new and pre-owned aircraft acquisitions, new aircraft completion management, aircraft leasing and more. For more information about any of our services, please contact us.

    This article was originally published by Essex Aviation's blog on January 23, 2019. 

  • Tracey Cheek posted an article
    What to Consider When Selecting Your Aircraft Management Company see more

    NAFA member, Tom Mitchell, Executive Vice President of Essex Aviation Group, Inc. highlights what to consider when selecting your aircraft management company.

    When acquiring your first aircraft, one of your first decisions will be how the aircraft will be managed and operated. Some owners opt to run their own flight department, but many seek out a third-party aviation management company. These companies have decades of experience managing aircraft of all types and sizes and their purpose is to make your ownership as seamless as possible.

    When considering the various management company options available, you can be certain that they are all quite different as to what they can offer. Depending upon your specific needs and requirements, you will find many of the options may not be the best fit for your specific needs and requirements.

    Types of Aviation Management Companies

    In the private aircraft management industry, there are three (3) primary types of aircraft management companies:

     

     

     

     

     

     

     

     

     

     

     

     

     

    Within each category are differences in the scope of resources offered, and several factors should be considered and evaluated to determine which type of organization is best for your needs. Always assess each management company’s safety culture, research their incident and accident history and learn about and understand their operational experience and reputation.

    Aircraft Management Services

    Although every aircraft management company offers different management services, there are certain basic services you should expect to receive such as crew recruitment, accounting, flight coordination, and a well-organized charter department. We recommend that clients who are evaluating a management company consider the following:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Things to look for: Make sure you understand the aircraft management company’s key operations, maintenance, crew management and administrative functions. All of these factors will directly impact your relationship with the company and your use of the aircraft.

    Also, keep in mind the geographic location where you intend to base your aircraft. Some aircraft management companies may base all the aircraft they manage at one central location requiring that your aircraft be positioned to your desired departure airport for your trips or for maintenance. Other management companies are able to support your aircraft based at any airport you choose that supports your aircraft’s operational requirements.

    Your Requirements for an Aircraft Management Company

    A good first step is to outline and prioritize your goals as a private aircraft owner, in order to define what would make an ideal relationship. Be sure to allow sufficient time to review and receive proposals from a range of aircraft management companies and compare their differences. If you begin the selection process with an honest self-assessment, the relationship you build with your aviation management company will be that much better.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Things to look for: Chartering your aircraft to third parties can be a way to generate revenue when you aren’t using your aircraft. If you plan to charter, there are many things you’ll require from your aircraft management company. First and foremost, make sure your management company can operate your aircraft under their own Federal Aviation Regulation (FAR) Part 135 charter certificate.

    Charter Capabilities

    Allowing your aircraft to be utilized for third-party charter can generate revenue to reduce the owner’s overall operating costs and can also make your aircraft attractive to outside aviation management companies. You should, however, not get false hopes about covering your overall operating costs. “There’s almost never a break-even point,” said Kyle Slover, COO of Volo Aviation “The better way to think of it is, ‘what does it do to my (the owner’s) occupied hourly rate?’ Discuss with your management provider what the financial metrics are that you are trying to reach.”

    If internal or third-party Part 135 charter is one of your goals it is prudent to engage the assistance of an independent and knowledgeable industry consultant or advisor to facilitate the ownership structure.

    Private aircraft management companies of varying sizes will provide certain advantages and limitations when it comes to chartering. Regardless of who you choose, you’ll want to be sure they’re equipped to handle all aspects of chartering and aviation management.

    • Supporting varying flight destinations and times of travel
    • Managing all ground services, details and security
    • Negotiating discounts on your behalf

    As you make your final selection, be sure to choose a private aircraft management company that can meet not only your current but also your future needs. Whichever company you choose, you can and should expect it to partner with you to meet your travel needs, your budget and any charter revenue requirements.

    The original article was published in Business Aviation Magazine and on the Essex Aviation blog, June 29, 2018.

  • Tracey Cheek posted an article
    Top Considerations When Purchasing a New Aircraft see more

    NAFA member, Essex Aviation, shares top considerations when purchasing a new aircraft.

    Private aviation offers several benefits, including comfort and convenience. If you or your client is considering private aviation for business or personal use, there are several considerations to take into account as you evaluate your options.

    Advice for buyers when purchasing a new aircraft

    Follow the 80/20 rule

    When shopping for an aircraft it can be tempting to “over buy.” To avoid purchasing an aircraft that delivers more than you need, consider how you will be using the aircraft, a majority of the time. Will it just be you and perhaps a business partner traveling to meetings a couple states away? Or will you be traveling internationally with your entire family monthly? The aircraft you choose should meet your mission requirements roughly 80 percent of the time. So, if you will only be traveling internationally once in a while but will be using your aircraft primarily for short business trips, consider purchasing an aircraft that best supports the business trips and consider utilizing charter or purchasing a fractional share to meet your international travel needs.

    Weigh your options: New vs. Pre-Owned

    Spend some time determining whether a new or pre-owned aircraft is the right option for you. Depending on your needs, a pre-owned aircraft may be a more affordable choice and will offer you the option of doing various types of refurbishments, upgrades or customization to the aircraft to meet your needs.  A new aircraft can be fully designed but the lead time for delivery will be anywhere from 12 – 18 months or longer.

    Bring an unbiased aviation advisor on demo flights

    Before deciding on an aircraft, often you can do demo flights on different planes to assist with your evaluation of the various options. It can be extremely beneficial to bring a professional and unbiased aviation advisor along with you on the flight to assist with your review of the aircraft and the various options each aircraft type provides.  Each demo flight will provide an opportunity for you and your aviation advisor to work together to determine which aircraft type best meets your needs and requirements.

    Decide what’s important to you — speed / range / cabin size?

    While every aircraft owner would like to say I want it all, the reality is that most aircraft can meet many, but perhaps not every desire of the purchaser. Your aviation advisor can assist you with the evaluation of how each aircraft model can meet your defined requirements.  An aviation advisor can also assist you with navigating all of the available information so that you can truly understand each option, including the pros and cons of each and ultimately make as informed a decision as possible.

    If you’re financing, start the process early

    Since a loan or lease for an aircraft purchase is an involved process, the financial institution you choose to work with will need time to perform their due diligence. So, if you are going to compare rates and request proposals from multiple lenders it’s important to leave yourself time. The initial review and due diligence process to receive a formal proposal typically takes about a month and sometimes longer.

    Determine how you will be using the aircraft

    If you are primarily using your aircraft for business purposes you may be able to benefit from certain tax benefits.  Your aviation advisor can recommend an aviation specific legal and/or tax advisor to work with your internal advisors on properly structuring your aircraft ownership and utilization to maximize the use of any tax benefits.

     

    The new aircraft acquisition process

    The process of acquiring a new aircraft typically includes:

    The initial evaluation and aircraft identification

    There are many choices when it comes to purchasing a newly produced aircraft — starting with the decision to purchase an aircraft that allows you to choose the floorplan and all the specifications and materials or a “white-tail” aircraft, which has already been produced and gives you very limited opportunities to make changes. Your aviation advisor can work with you to evaluate different aircraft options based on your specific needs and desires.

    The design phase

    Once you have identified an aircraft for purchase you enter the layout and design phase.  Your aviation advisor can assist you throughout the series of specification meetings to assist with any questions.

    The production phase

    With a final and approved design in place the aircraft production process is launched. The production process for a new aircraft can take up to a year or longer depending on several variables.  Your aviation advisor can provide regular on-site representation to review and monitor the on-going production process.

    Final delivery and acceptance

    When your aircraft is ready for final delivery your aviation advisor along with the owner’s existing flight crew will work through the formal delivery and acceptance process with the manufacturer.  Once the aircraft has been accepted the final delivery and transfer of title will be completed.

    The aircraft acquisition process can get complicated and has several parties involved. Retaining an unbiased aviation advisor to represent you and manage the complete process will provide you with both value and comfort throughout the acquisition process.

    If you would like to speak with an experienced aviation advisor who can provide unbiased advice and help you through the aircraft acquisition process, contact Essex Aviation.

    Essex Aviation Group, Inc. was founded in 2013 with the primary goal of providing clients with the most current industry knowledge and experience, a vital component in evaluating business and private aviation transportation needs.

    Representing clients in a wide range of services, Essex builds client relationships through dedication to trust, integrity and a level of responsiveness not found anywhere else. Services include new or pre-owned aircraft acquisitions, new aircraft completion management, pre-owned aircraft refurbishment and upgrade management, block and ad hoc charter services, and much more.

    This article was originally published on Essex Aviation's blog.

  • Tracey Cheek posted an article
    What You Need to Know Before Choosing a Private Jet Charter Provider see more

    NAFA member, Essex Aviation, shares what you need to know before choose a private jet charter provider.

    If you frequently fly commercial for business or personal reasons, you might want to consider making the switch to private aircraft chartering. Compared to flying on commercial airlines (notorious for their unreliable flight schedules, long security lines and cramped quarters), private jet charter services provide the flexibility to travel almost anywhere in the world, often arriving at a location closer to your final destination, on your own schedule and in total comfort and convenience.

    Most air charter companies offer a wide variety of options, so you can choose the aircraft that best meets your specific aviation needs and the requirements of each individual trip. Chartering is also practical from a cost perspective because you pay on a trip-by-trip basis. Although chartering does not guarantee aircraft availability the way membership programs, fractional or whole aircraft ownership does, it’s still one of the most convenient means available to access private aviation.

    Before making the transition from commercial airline travel to a private aircraft charter, there are a few important things you should know. There are a few ways to charter a plane, including working directly with a charter operator or going through a charter broker.

    Charter operators are directly responsible for the on-going management and operation of the aircraft on their charter certificate, as well as staffing the plane. Charter operators are required to be certified by and receive regular oversight from the Federal Aviation Administration (FAA).

    Charter brokers are agents who act as liaisons between the client and the charter operator. If you choose to work with a charter broker, they will present you with a cost quote for your trip and, once you’re satisfied with the price and approve the quote, they will work with the multiple charter operators they have relationships with to secure the aircraft to complete the trip. A few days prior to your trip, your charter broker will send you the airplane tail number (the plane’s FAA registration number) and all other relevant information.

    Unlike charter operators, charter brokers aren’t required to be FAA licensed nor are they regulated — in fact, charter brokers aren’t even required to have any prior experience in the aviation industry. Although the majority of brokers are reputable professionals with extensive industry experience, it’s still important to do your due diligence before signing a charter contract through a charter broker. For example, if your broker is able to arrange an aircraft for charter but is reluctant to give you certain information about the plane (including the year, make and tail number) or who the actual charter operator is that will be completing the flight, it’s best to take your business elsewhere.

    Before working with a charter operator or broker — or even pursuing charter services at all — consider seeking the advice of a qualified private aviation consultant. Aviation consultants, such as the experts at Essex Aviation, use in-depth cost and usage analysis to help you determine which private aviation service or combination of private aviation services is the best fit for your specific needs. If you decide to pursue private jet chartering, your consultant will represent you throughout the charter evaluation and trip approval process and work closely with your charter operator of choice to secure the best value and safest charter aircraft solution possible.

    Essex Aviation Group, Inc. was founded in 2013 with the primary goal of providing clients with the best, most current industry knowledge and experience, a vital component in evaluating the many options available to meet their business and private aviation needs. Essex has experience advising and representing clients in a wide range of services, including: new or pre-owned aircraft acquisitions, new aircraft completion management, pre-owned aircraft refurbishment and upgrade management, block and ad hoc charter services and more. If you’d like to learn more about Essex Aviation and the services we provide, contact us today.

    This original blog article was published by Essex Aviation

  • Tracey Cheek posted an article
    H. Lee Rohde, President of Essex Aviation, discusses options to consider when aviation needs change. see more

    NAFA member H. Lee Rohde, founder, President, and CEO of Essex Aviation, advises on a few different options to consider when your aviation needs change. 

    When your aviation needs change, there are a few options to consider, such as total aircraft replacement, refurbishment or utilizing third party supplemental lift services. Lee Rohde, President & CEO of Essex Aviation recently shared three avenues to consider with Business Aviation Advisor in their featured cover story, Time for a New Aircraft – or Not? 

    An experienced and unbiased aviation advisor can help you weigh the different options and make a choice that is right for you or your client’s unique needs. Read the full article to learn more about the alternatives to aircraft replacement and then contact Lee Rohde or Tom Mitchell who can help answer any of your questions.

    This article has been publish as it appeared in the March/April issue of Business Aviation Advisor.