AVIA 360-B02: Corporate Aviation Proposal Outline

Corporate aviation proposal outline AVIA 360-B02 Helmut Castaneda Liberty University * INTRODUCTION Commercial aviation is a growth segment in the aviation industry as commercialization of flight hours makes it easier to meet the business needs of the commercial carriers used in business travel. The commercial aviation option is convenient compared to commercial carriers that are booked based on flight schedules, and it is unusual for the public to book the commercial aviation carriers. Pilots of corporate aviation have commercial licenses besides an instrument rating. Corporate Aviation is a viable business segment in aviation, and the proposal will highlight the case for corporate aviation, requirements and acquisition of aircrafts. Business & Commercial Aviation * TRAVEL NEED ANALYSIS Ї Organizational Travel History From the KBNA, Nashville International in Springfield, TN the staff makes more frequent trips from and to *Owensboro, KY Anderson, SC Athens, GA *Effingham, IL *Mitchell, IN *Sedalia, MO and *Union City, TN. Ї Future Travel Analysis The Cessna Citation M2 is incredibly popular for being bigger and lighter than smaller personal jets like the Mustang, which were the preferred before the 2008/ 2009 crisis. The M2 is capable of traveling in thin air compared to earlier models, which improves speed and the planes can fly above 40,000 ft high. Even as personal jet transportation and commercial aviation represent a small market share of the airline industry, there is growing demand in business aviation in North America, Europe and Asia. Economic drivers play an important role in the success of commercial aviation. The Citation M 2 is fast, efficient as a low cost aircraft it is a preferred entry-level craft for single-pilot operations. There is growing demand for such light and cost efficient aircrafts. * AIRCRAFT REQUIREMENT Ї Aircraft Choice: Citation M2 н Specifications Textron Aviation (2019) report that the aircraft is for the entry level jets for pilots that focuses on “speed, control, range and comfort complete the aircraft providing you with serious jet performance.” The aircraft is also suitable for commercial aviation because of the in-cabin technology, the touch-controlled avionics and two Williams FJ44 engines that allows the craft to reach a cruise speed of 404 knots and range is 1,550 nm (Textron Aviation, 2019). A GARMIN G3000 system is integrated in the flight deck of the Citation M2 aircraft. н How it will meet the required mission and parameters ш Viability and suitability for the travel requirements of the company and its staff within the most travel cities. Considerations will also include the range, maintenance costs, and even duration of flight for the 300nm trips which are the most common. Ї Aircraft Capital Cost н Initial Cost of acquisition (new or used) ш (GlobalPlaneSearch.com, 2019) According to GlobalPlaneSearch.com (2019) the cost of a Cessna Citation M2 of an old aircraft ranges from $550,000 to $ 1,100,000. Most of the planes cited are second hand, but the current market for these plans is $ 3.2 million to $3.8 million. ш projected travel requirements A new plane will be used and there is sufficient capacity to use the craft in different routes at low costs and the aircrafts will primarily serve business passengers. The company also has the capacity to accommodate the aircrafts and business needs without needing to improve on the facilities. Sheehan (2013) pointed out that the seating capacity should not be reserved for the passengers who are necessary to conduct the business of the employer as the value of the flight declines. н Cost of operations The fixed costs are incurred regardless of the number of hours flying and these costs include crew, crew training, insurance, aircraft management, hangar and miscellaneous expenses. The variable costs are the direct hourly costs such as fuel, maintenance, engine overhaul as well landing and handling. The annual budget for flying 400 hours per year is approximately $1.2 million, and the highest costs are for the fuel and crew. These costs are justifiable for the organization as they make revenue surplus. ш Hourly costs of operation Fuel Cost @ $4.40/gal $796.40 Maintenance $530.00 Crew/Landing/Handling $200.00 Engine Overhaul $470.00 Miscellaneous Variable $25.00 Total Direct Operating Costs per hour $2,021.40 When there is an increase in the hours flown, the share of variable costs to total costs increases * MANAGEMENT REQUIREMENT Ї Basic structure of the corporate flight department for the company н Personnel required The Citation M2 aircraft crew requires two (2) licensed pilots with private or commercial license, instrument and multi- engine ratings and air- plane pilot timed. Two mechanics with experience are also required. The chief operating office heads the depar...