The past 12 months have brought a “plethora of cost reduction conversations” Patti Ann Sullivan told Corporate Jet Investor. This, together with the pandemic-induced shift away from business travel to primary personal private travel is why Sullivan decided to form AdviseAir Inc. “A company which helps aircraft owners and users make informed financial decisions,“ she explained.
Sullivan told Corporate Jet Investor: “Unlike the 2008 financial crisis, where aircraft were the first assets sold or turned back to the financial institutions, many aircraft owners are looking to reduce expense and hold on to their aviation assets during this pandemic. Further, new entrants to private aviation seek sound advice, some prior to acquisition and others after the dust settles and have total cost of operations shock syndrome.“
Post the 2008 market crash, Sullivan was recruited by a US bank to oversee its aircraft loan and lease portfolio and grow market share. She discovered poor purchase selection, ageing aircraft with aggressive loan terms and excessive wear-and-tear on chartered aircraft, representing a lose-lose proposition.
“A few years later, I was recruited by one of the largest aircraft management firms in the US and transitioned to aircraft management sales and client services,” said Sullivan.
‘Unique mission and operational nuances’
“From that point forward, my eyes have been opened to each owners ’unique mission and operational nuances and the need for informed initial projected budget design, operating cost controls, efficient accounting, reliable re-forecasting and asset preservation measures.”
During Covid isolation, Sullivan said she realised her professional purpose is to help owners and users plan and manage their assets to weather economic ups and downs and the cost fluctuations throughout an aircraft ownership life cycle.
AdviseAir does not offer aircraft acquisition or transaction services. “When it is time for clients to buy or sell, we come alongside their transaction firm armed with their specific culture, treasury strategy and asset value preservation objectives. Much like a family office, AdviseAir serves only our clients’ interests.”
One of the many shifts over this past year of much change is the growth in outsourcing Part 91 management support, according to Sullivan. With enhanced technologies, artificial intelligence and a new generation of aircraft owners choosing outsourcing over hiring in the market, there is an increased interest in needs based crew support.
“Not only have full service aircraft management companies enjoyed significant growth and change, so have the segmented flight management, scheduling and maintenance service providers,” she added. “It sure is a dynamic time to be in the private and corporate aviation industry.”
‘Dynamic time to be in the private aviation’
Looking at the industry post-pandemic, a hot topic seems to be capital planning and budget design predicting when business travel begins again, said Sullivan. The key topics that need to be addressed are:
• Who will have access to the aircraft or on demand supplemental lift options?
• Determining what changes in the use policy should be made in line with the ownership tax plan and administration thereof
• Does the current asset(s) meet the projected travel need?
• Purchase a fraction, jet card or alignment with a charter operator to supplement the owned whole aircraft or as an entry to private flight for new to aviation buyers.
Sullivan concluded: “Given the current limited commercial routing and risk to commercial travel, perceived or real, we aim to analyse the best solution. Time value of money has always been a consideration in flying privately and will continue to be, maybe even more so. The commercial flight route increased flights to remote locations limiting layovers and increase frequency of flights is yet to be seen, so we will model out best and worst case scenarios.”
