The Cost of Business Travel: Companies Turning to Corporate Jet Options to Save Time, Money
What’s your time worth to you?
That’s a question that more and more of our clients are asking themselves.
As advancements in technology boosted the ability to communicate and do business across vast distances, companies have realized that nothing takes the place of face-to-face interaction. And as business travelers take to the skies in increasing numbers, the age-old idiom of “time is money” has become more relevant, especially as commercial travelers find themselves at the mercy of changing schedules, limited flights and high costs.
The relevance of the phrase has grown so much so that businesses are increasingly exploring transportation options that not only help their travel dollars work harder, but offer better stewardship of employee hours, which are often wasted in airport terminals around the world.
Driven by increasing demand for improved passenger experience, introduction of new business jet services and programs, and business jets market is projected to grow from an estimated $30.1 billion in 2022 to $41.8 billion by 2030, according to a Markets And Markets report.
Is Travel Using a Business Jet Right for My Company?
As with nearly every business decision, when it comes to making a significant change to procedures that will impact the bottom line, it’s important to step back and take a 360° look to identify not only the practical considerations, but also the financial and regulatory implications to make the right decision.
1. Audit Travel Time
Before you begin evaluating the multitude of options available, begin by internally auditing corporate travel to determine how beneficial moving from commercial to private flights would be for your business. Consider the number of out-of-state and even international locations of your company’s operation sites, business partner locations, suppliers and others who are critical to your business and how frequently you need to make in-person appearances.
Once you have a handle on the volume of travel, take costs into consideration. Beyond the actual flight and accommodation that is spent, consider the cost of lost productivity. For instance, if your employees arrive at the airport 90 minutes before their flight, then experience an unexpected delay of several hours or a cancellation, they may be forced to spend anywhere from 2 hours to overnight stays to catch a flight that may be the following morning. Considering flight tracking service, Flight Aware, recently shared that there are nearly 1,000 flight cancellations in the U.S. daily and more than 7,500 delays, the cost of lost productivity is creating a more significant problem for travelers and employers than ever before.
2. Put Experts on the Case
While the audit will give you a good idea of how much money your company is spending on travel, knowing what those numbers mean in the short- and long-term is critical. Take time to assemble a team of individuals that include legal, banking and operations experts to evaluate the numbers and give you an idea of how you can make better use of your corporate travel dollars.
3. Determine Your Options
Your team should provide you with an honest lay of the land in helping you match your current and anticipated needs with the different options available, which include:
- Full ownership: This is what many people think of when it comes to private travel. In this instance, the company owns the plane and has full responsibility for securing a qualified crew, maintenance, inspections, storage and safety. And as with most equipment owned outright by a company, having a corporate jet means that it will depreciate over time, become outdated or require costly repairs from time to time.
- Joint ownership: Joint ownership combines elements from full and fractional ownership, making it more cost effective, but exposing your company to risk in finding the right partner.
- Charter service: While this is among the most flexible options in terms of cost and liability, it may be less convenient as companies are still reliant on flight schedules, especially during peak periods. Also, there are additional fees levied, such as fuel surcharges, landing fees, crew wait costs and more.
- Flight Cards: Similar to purchasing tickets for commercial planes, this option is based on purchasing a bank of flight hours or a specific dollar amount that will go toward travel. While the price is competitive with a charter service, it is more expensive for companies whose staff travel frequently.
From convenience and increased productivity to greater privacy and time savings, the true benefits of private jet travel are becoming more appealing and a worthwhile investment.
For companies considering making a change, being backed by a knowledgeable, seasoned team is a practical and smart-money solution, especially when it has the power to positively impact your bottom line, increase productivity and save time and stress. For more information about how Western Alliance Bank’s Equipment Finance Group can help your company weigh your corporate travel options, connect with Brian Scott, Managing Director of the Equipment Finance Group:
Brian Scott: [email protected], 602-296-6649