One careful owner
When aspiring companies consider entering the business jet aviation market they often underappreciate the importance of service to their potential customers.
Dean Roberts, Rolls-Royce Director of Market Analysis, Civil Small and Medium Engines for Rolls-Royce, argues the case for knowledge and experience in the support of business aircraft.
Above all else, time is the important benefit delivered by business aircraft, and the service provider needs to fundamentally appreciate this. And if time is critical, then you need to know that your aircraft is serviced and ready to fly whenever you want it.
There are two types of business aviation customers and outside observers can often get confused between the two. For simplicity, let’s call them the user and the operator.
The user is the person that is transported by the aircraft and is often termed ‘the person sitting in the back’. This could be, for example, the senior management of a company visiting outlying facilities that are distant from major airport hubs, or the sales/commercial people flying out of the country to negotiate an important deal with a new customer.
I will define the operator as the team that flies and maintains the aircraft. In many cases this will be a handful of individuals and they will be responsible for a multi-million dollar aircraft asset. As ‘fleets’ of one aircraft are the norm in business aviation, having a vast support team is not feasible. So the support infrastructure for these operators is minimal. As a result they are more dependent on the original equipment manufacturer (OEM), or a third party service provider.
The two business aviation customers have different perspectives but they are united in one belief - the aircraft is a time machine. Users want to arrive at their destination as fast as possible, this is the utility value of the aircraft. The aircraft is not usually a revenue earner, but it is a profit or relationship enabler. In short, the aircraft is a productivity investment and time is the metric of value being measured.
For the business jet operator the requirements are straight forward; exceptional levels of aircraft reliability and outstanding levels of service. Reliability is required because the operator’s role, with limited resources, is to get the user to their destination on time. Outstanding service is required by the operator when very occasionally things go wrong. So in essence, reliability and service are discriminators that define leading aerospace companies that ‘get’ business aviation.
So what does this mean for companies wanting to enter business aviation as a service provider? The problem with much of the economic and management theory on market entry to business aviation is that it does not capture the importance of intangibles such as service.
In business aviation the need for service is not a regular event. If, for example, the aircraft needs to go in for a D-check, or the engine experiences some FOD, the non-availability of an aircraft far outweighs the cost of the service activity. Especially if you understand that time is the metric of value in business aviation.
Inexperienced entrants tend to concentrate on the quantifiable rather than the more abstract. So they focus on whether they have the technology, facilities and the financing in place rather than whether they have a professional service network deployed. Some see their service operation as an annoying cost. However, rather than cost centres, successful operators see their service networks as investments in goodwill and customer loyalty.
It is these companies that garner the high customer satisfaction ratings and their operators actually become advocates for them.
Most aircraft today are incredibly reliable and from year-to-year you may not need to use an aircraft or engine service organisation.
In the case of Rolls-Royce, four factors drive our approach to service:
- Asset valuation - one of the most telling indicators of an excellent service provider is whether their service programme can be reflected in the aircraft asset value. Some OEM maintenance-by-the-hour service programmes like CorporateCare® actually enhance the value of the aircraft. This is the free market’s assessment of the worth of the service and is a significant positive endorsement.
- Resources that are fit for purpose - some service companies claim international reach but may not be able to deliver in a timely manner. For example, if you operate globally, consider whether your service provider can get spare engines into far flung countries - quickly.
- Business aviation experience - if the service provider has been in the business sector a long time it is likely that they understand the market. In 2012, Rolls-Royce celebrated 50 years of selling Power-by-the-hour™ programmes. This has evolved to become the company’s CorporateCare service. With that level of experience, we feel we understand business aviation well.
- Independent customer satisfaction surveys - an independent survey of a service provider’s performance is very valuable in consistently tracking aircraft, engine and avionics performance.
In my 30 years in this industry one of the consistent misunderstandings I have seen is that new entrants often do not realise the crucial importance of service to the business aviation operator community. The notion that the role of the aircraft is to buy valuable time is the key differentiator from other civil aircraft sectors.
When considering which service provider to use, checking the four factors is a good place to start. They will provide a good indication of whether a service provider understands business aviation and is in the industry for the long term. As far as Rolls-Royce is concerned we have a track record that I hope demonstrates that commitment and we are happy to be judged on the four key points here.
We continue to bring new product to the market in this important sector. In late 2012, the new Gulfstream G650 entered service, powered by the Rolls-Royce BR725 engine. In 2013, the latest version of the Cessna Citation X, powered by the Rolls-Royce AE 3007C, will follow.