March 12, 2010 | Posted by Scott Cutshall
Signs of recovery for the business aviation industry are weak for 2010 but point to improvement in coming years, the head of the industry’s trade and advocacy group said March 11.
Speaking at the National Business Aviation Association Regional Forum at Van Nuys Airport, association President and CEO Ed Bolen said that aircraft deliveries will not be particularly strong in 2010 but that forecasters point to 2011 for when new plane purchases will pick up.
Andrew Richmond, TWC Aviation's President
Flight activity has picked up, sale prices of aircraft have stabilized and the inventory of pre-owned aircraft has dropped when compared to a year ago, Bolen said.
“We are beginning to see progress at the economic level,” Bolen said.
Industry analysts had evidence of slight improvements.
Takeoffs and landings in December were 5 percent higher than the year before, according to UBS Investment Research Business Jet Monthly.
While jet fuel sales dropped in 2009, Brian Foley Associates forecasts more than 21 billion gallons being consumed over the next decade. The firm also expects 9,000 business jets worth $170 billion to be delivered through 2019.
About 1,000 people were expected to attend the daylong event taking place at TWC Aviation. This is the first forum NBAA has had at Van Nuys in about five years.
The association returned because with its new 43,000-square-foot hangar and 22 acres of ramp space there was the room for the 70 exhibitors and the 17 static aircraft on display, said TWC President Andrew Richmond.
“It gives people a chance to see our new hangar and our new plane, a Falcon 2000 LX,” Richmond said.
TWC relocated to the Valley airfield from Bob Hope Airport in Burbank in 2008.
The aircraft management and charter service firm had a good 2009 and is seeing an increase in both charter flights and owners using their planes.
The company is in a hiring mode having added a new a management position, dispatchers and sales people, Richmond said.
Categories: Industry Articles | 
Tags: aircraft management, nbaa, private jet ownership | 
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January 28, 2010 | Posted by Scott Cutshall
“How many charter hours can you put on my plane?” That’s often the first question I’m asked by clients looking for an aircraft management company. While the answer is important, the number of charter hours is only part of the profit equation. It’s the type of charter trip—the quality of the hours, if you will—that matters most to your bottom line.
Why? Lets take the same plane, an eight-passenger Cessna Citation X super midsize jet, and fly it on two different charter journeys to see which is more profitable for the aircraft owner.
The Citation X has a range of 2,900 nm, or seven hours and burns 370 gallons of fuel for the first hour and 300 gallons for the second hour and beyond. For our comparison, we’ll make three basic assumptions when calculating the Direct Operating Cost (DOC) below: 1) fuel is $4.00/gallon; 2) the aircraft is on the standard engine program; and 3) you are allocating dollars for routine maintenance.
Charter Trip #1: LA to Chicago to LA
Flight Time: 7 hours
Average Fuel Burn: 320 g/hr
DOC: $2,160/hr
Charter Revenue: $3,485/hr
Profit: $1,325/hr (38% gross margin)
Charter Trip #2: LA to San Francisco to LA
Flight Time: 2 hours
Average Fuel Burn: 410 g/hr (lower-altitude flying burns more fuel)
DOC: $2,520/hr
Charter Revenue: $3,485/hr
Profit: $965/hr (27% gross margin)
The difference is striking. If you were the owner, you’d make $360 more per hour from Trip #1 than Trip #2, boosting your gross margin by eleven percent. This means that at 20 charter hours per month, you would make an additional $7,200 by flying charters similar to Trip #1. Moreover, the difference grows along with the number of charter hours. For example, at 40 charter hours per month the delta would be $14,400—enough to cover monthly management, hangar, and insurance fees, with a few thousand left over to go towards pilot salaries or other expense. Plus, these numbers don’t include the cost of additional wear and tear on the aircraft from flying so many short trips which increase maintenance costs and lower resale value.
What does all this have to do with choosing a management company? Simple. Although your profit fluctuates with the cycle length, the management company’s profit per charter hour stays constant, and that can create conflicting interests. If your management company is truly interested in helping you reduce your cost of ownership, treating your aircraft just as they would their own, they should be as concerned with the quality of charter hours as they are with the quantity..
So when a company tells you how many hours of charter you can expect, your follow up question should be: “What is the average cycle length for those hours?” Their answer will tell you a lot about what you can expect from that company in every aspect of managing your aircraft.
>>> What’s coming next week?: Fuel tax credits, lay-up provisions, and other financial benefits you should receive if your management company is acting on your behalf.
Categories: Management | Tags: aircraft management, private jet ownership | No Comments »
December 8, 2009 | Posted by Ken Webster
S
cott Cutshall oversees TWC’s charter services division, and is responsible for the expansion of our diverse fleet of charter and privately managed aircraft. Mr. Cutshall brings outstanding customer relationship skills and wide-ranging experience to this key role in our company. Prior to assuming his current position, Mr. Cutshall managed operations at TWC’s Orange County Base, and earlier served as Manager of Business Operations. Before joining TWC Aviation in 2000, he was a flight instructor in Fullerton, CA, and worked in fixed-base operations management with Signature Flight Support. Mr. Cutshall holds aviation licenses as a Commercial Pilot and Certified Flight Instructor, Instrument and Multi-Engine (CFII, MEI), and has a B.S. in Business Management from Biola University.
Categories: About TWC | Tags: aircraft management, private jet ownership | No Comments »
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