The Business Case, and Ethics Case, for Business Aviation

Over the last couple of months I’ve blogged a couple of times about ethics in the use of corporate jets. (See here and here.)

Last Friday, I participated in a ‘webinar’ sponsored by the National Business Aviation Association, called The Business Case for Business Aviation. My co-panelists were people who know a lot more about the aviation side than I do, including people who run Aviation departments for major corporations. They had interesting stuff to say about utilization policies, and the role aviation plays in the day-to-day affairs of a big company.

I kept my own comments pretty brief. I made two key points:

1) Appropriate use of aircraft is a matter of governance and accountability. At well-governed organizations, decisions promote the stated goals of the organization, whether those be be profits, expansion of market share, reduction in carbon footprint, etc. That means that at well-governed organizations, corporate jets will only be used in ways that advance legitimate corporate objectives. And that’s true for private firms, publicly-traded firms, nonprofit organizations, etc., and it’s true whether or not a company is getting some form of aid from the government.

2) The ethics case is part of the business case for business aviation. Business today depends on the goodwill of many stakeholders. In order to argue that corporate aviation makes good business sense, a company also has to justify their choices to key stakeholders, whether those be shareholders or taxpayers or someone else. Stakeholders who aren’t convinced can make life difficult. So, even a tool (e.g., an aircraft) that a company finds operationally useful can become impractical if the ethics case can’t be made to key stakeholders

5 comments so far

  1. Anonymous on

    Great points, esp. #2. Doesn’t new communications technology make many business trips (and academic conferences, I might add) unnecessary? Don’t advances in technology (e.g., video-conferences) make it more and more difficult to prove to stakeholders the productivity/business case for business aviation? Don’t drastic reductions in corp. jet miles make various “sustainability” statements by business more credible? Cheers, Marc

  2. Chris MacDonald on

    Marc:New technologies make <>some<> flights unnecessary, but not all of them. That’s why smart companies have explicit policies about <>when<> employees (and it’s not just senior executives) can fly on a company plane.If a company knows what it’s doing, it will have the rationale laid out ahead of time — including the relative costs of different ways of doing things — and will be able to point to that to justify their choices.Chris.

  3. Anonymous on

    I think that, in the current environment, business needs to do more than justify its *choice* of using corp. jets. It needs to embark on a clear, concerted strategy of *reducing* corp. jet miles (wherever and whenever possible) and its associated emissions, *especially* if that organization emphasizes its commitment to sustainability. Note: Not “abandon,” but “reduce” or “minimize” the use of corp. jets. If execs don’t do that, they are simply hypocrites engaging in “green” window-dressing. Cheers, Marc

  4. Chris MacDonald on

    Marc:Fair enough.My point is that at tightly-run organizations, use of jets isn’t a luxury good: it’s a business decision made based on the objectives of the corporation (including arguably sustainability).Luckily, jet fuel is not just environmentally bad, it’s also expensive. So well-governed firms do all they can to minimize its use.Chris.

  5. Anonymous on

    Chris: Exactly: “well-governed firms do all they can to minimize its use.” Let’s hope in the future corp. governance will be a sharp departure from corp. governance in the past (in general). Even though markets (e.g., price of jet fuel) may induce greater levels of diligence in the use of corp. jets or any other org. assets, often such market mechanisms will be insufficient (based on recent experience). Cheers, Marc


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: