bombardier business aircraft corporate productivity case study · pdf filebombardier business...
Post on 19-Mar-2018
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Executive Summary» In today's environment it is critical to have the right
tools to demonstrate the contribution of business aviation to corporations
» Existing public tools lack the capability to perform in-depth analyses of a flight department’s operations
» Bombardier Business Aircraft has developed the capability to extract time and costs savings associated with the use of business jets across an extended period of time
» Drawing from the expertise of Bombardier’s own Commercial Aircraft Division, the Business Aircraft Customer Analysis Group can assist customers demonstrate the value of their operations
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Case Study on Business Aviation» The case study analysis outlines the potential benefits of
aircraft ownership. It outlines an organization’s travel patterns in comparison to commercial aviation
» About the company:
– Headquarters in Tulsa, OK
– Multiple Business locations & Interests
• Company sites
• Key Customers, Suppliers & Partners
• Located across USA, Canada and Mexico
– Operates a Challenger 300 • Flying 700 flight hours per year
• Average of 2.5 business trips per week
• Business trips across North America
– Short and long-range missions
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Confidential
Flight Analysis
Challenger 300 is used to:» Connect Corporate
Headquarters to satellite offices
» Reach remote locations not extensively serviced by airlines (e.g. Alaska)
* At an average of 2.5 business trips per week, or 5 flights per week
Most frequent destinations:
Ratio of 5:1 = New York, Los Angeles, Miami, Boston, Washington, Toronto
Ratio of 3:1 = Seattle, Las Vegas, Houston, Montreal
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Confidential
EfficiencyBusiness Aircraft
Single hub: Tulsa / Direct flights: 100%
Multiple hubs: Tulsa, Denver, Chicago, Dallas, Houston, Atlanta, etc. / Direct flights: 11%
Average travel time: 2 hr 41 min Average travel time: 6 hr 01 min
Commercial Flights
Company A would suffer significant inefficiencies by flying commercial
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83%
6% 11%
Direct Flights
1 Connection
2 Connections
Commercial flight connections decrease efficiency & flexibility
Commercial flights increase travel time & decrease 1-day business trips
** Assuming a 14-hour-day. Commercial aircraft “one-day mission” average travel time (each way): 4 hrs 53 min
Business aircraft enable 1-day business trips 100% of the time, increase time on-site, and allow for multiple
destinations within the same day
Business aircraft 1-day trip: 8 hrs 38 min on-site*Commercial flights 1-day trip: 4 hrs 14 min on-site**
* Assuming a 14-hour-day. Business jet “one-day mission” average travel time (each way): 2 hrs 41 min
Flexibility
59%
6%
35%1-day business
trip2-day business
trip
3-day business trip
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Time Savings
Savings: 20% of management time
Scenario A) Management tool: top 10 management flying
Assumptions: 50 working hrs/week, 6 passengers per trip.
Commercial aircraft travel time
Business aircraft travel timeRegular working hours
Annual business aircraft travel time: 707 hrs
Annual commercial aircraft travel time: 1,587 hrsTime Saving = 880 hrs per traveler
Business aircraft scenarios and time savings
4,242
9,522
21,758
16,478
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
26,000
28,000
Business Aircraft CommercialAircraft
Man
agem
ent H
ours
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Time Savings
Assumptions: Pool of 100 employees sharing the corporate jet, 40 working hrs/week, 8 passengers per trip.
Savings: 176 more working weeks, or 3 employees per year
Annual business aircraft travel time: 707 hrs
Annual commercial aircraft travel time: 1,587 hrsTime Saving = 880 hrs per traveler
Business aircraft scenarios and time savingsScenario B) Project-optimization tool: pool of 100 staff
Commercial aircraft travel time
Business aircraft travel time
5,656
12,696
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000St
aff H
ours
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Confidential
Costs Efficiencies
Business vs. Commercial Aircraft Costs
In addition to cost advantages, business aircraft can generate additional opportunities and revenues, with 20% more management time or 176 more staff working-weeks
* Business aircraft assumptions: Total cost = direct and fixed operating costs (using Conklin & de Decker 2008 Vol.II assumptions) + 50% of employees travel time** Commercial aircraft assumptions: Total cost = tickets + hotels + extra meals + 100% of employees travel time
*** Operating costs do not take into account aircraft acquisition and depreciation. Commercial tickets were economy class purchased 3 days prior to departure (from www.expedia.com). Flat rate of 250$/hr per employee, hotel charge of 150$ per night per employee, meal charge of 50$ per employee per additional day on-site
$2,597,640
$2,964,591$2,780,762
$4,335,155
$3,251,366
$2,167,577
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
4 6 8
Number of Travelers per Business Trip
Ann
ual C
osts
($)
Business AircraftCommercial Aircraft
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Confidential
Indirect Benefits
These benefits, although harder to quantify, bring significant added value to business aircraft users
$$$
Well being
Time
Commercial Aircraft
Business Aircraft
Prod
uctiv
ity G
ain
(reference level)
(new level)
Work efficiency (real work environment, meeting capability)
Less time between arrival airport and true final destination (time saving not considered in this study)
Increased flight schedule flexibility
Greater availability (commercial flights could be sold out)
No lost luggage
Greater comfort for less fatigue
Morale of travelers (more time home with family)
Etc..
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Confidential
Methodology
» Commercial flights were economy class tickets purchased 3 days in advance using www.expedia.com
» Roundtrip price was selected, and divided equally for the inbound and outbound legs
» A total of 60 minutes was added to each commercial flight for security check-points and baggage pick-up
» For overnights missions, an extra 200$ (hotel:150$, meals:50$) was added per traveler per day
» Average total cost of 250$/hr per employee. 50% of business jet traveling time was credited as working hours from a cost point of view, but not from a direct travel time point of view (time on-site was privileged instead)
» Challenger 300 routes studies were performed using airways distance, 85% Boeing annual winds, typical BOW, M0.80 cruise speed and NBAA IFR 200 nm reserves. Costs were derived using Conklin & de Decker 2008 Vol.II assumptions, and the appropriate average mission length and annual utilization
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Confidential
Statistics
General:» Period covered: 6 months
» Number of missions (roundtrips) during period: 66
» Number of missions (roundtrips) per week: 2.53
Commercial aircraft:» Total commercial flight time (min) 47,611 min
» Total commercial flight time (hrs) 794 hrs
» Average commercial trip time (min) 361 min
» Average commercial trip time (hrs) 6.01 hrs
» Average "one-day mission" travel time (min) 293 min
» Average "one-day mission" travel time (hrs) 4.89 hrs
» One-day business trip 23
» Two-day business trip 39
» Three-day business trip 4
Business aircraft:» Total Challenger 300 block time (min) 21,211 min
» Total Challenger 300 block time (hrs) 354 hrs
» Average Challenger 300 block time (min) 161 min
» Average Challenger 300 block time (hrs) 2.68 hrs
» Average Challenger 300 ESAD (nm) 1,085 nm
» One-day business trip 66
» Direct flights 132
» Annual utilization (hrs) 707
» CL300 Hourly Cost (4 pax)* 3,174 $/hr
» CL300 Hourly Cost (6 pax)* 3,183 $/hr
» CL300 Hourly Cost (8 pax)* 3,193 $/hr
* Excluding acquisition cost and depreciation
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Confidential
Commercial vs. Business Aircraft Travel Time
0
100
200
300
400
500
600
0 50 100 150 200 250 300
Business Aircraft Travel Time (min)
Com
mer
cial
Air
craf
t Tra
vel T
ime
(min
)
Commercial direct flights
Commercial 1 connection
Commercial 2 connections
Ratio 1:1
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