A Tale of Two Standards

Remember VHS vs. Batamax? Business aircraft charter saw tremendous growth in the 1990s and received another boost after 9/11/2001 when airline travel was extremely restricted. Major corporations and fractional companies like NetJets, FlexJet and others needed to be confident that the companies operating the business jets they chartered had the highest level of safety.

Although the U.S. market had several quality auditing firms performing independent safety audits, the charter community and the buyers of charter, were desperately seeking a globally accepted solution to the myriad of audits and standards being utilized. With the support of International Civil Aviation Organization (ICAO), and in conjunction with numerous business aircraft operators and regulators around the globe, International Business Aviation Council (IBAC) developed the International Standard for Business Aircraft Operators (IS-BAO), and introduced it to the aviation community in 2002.

IS-BAO was designed to establish a professional safety code of practice for flight departments worldwide, developed by the industry, for the industry. This safety standard has applicability for domestic and international flight operations, private as well as charter, and scales from one aircraft operators to the largest fleets. Through tremendous efforts over the last 7 years, hundreds of business jet operators have gone through or are going through the IS-BAO registration process. Regulators around the world recognize the validity of the IS-BAO standard.

In 2009 a second standard was announced by the Air Charter Safety Foundation (ACSF), a new organization developed by the National Air Transportation Association (NATA). ACSF will limit audits under their standard to only members of ACSF.

ARG/US, Inc. has been a globally recognized and respected data collection, analysis and auditing firm of aircraft operators for over a decade. ARG/US has declined to endorse or join ACSF as they see no value in introducing another standard created by a U.S. trade association that has no acceptance outside of the United States. Furthermore they feel the ACSF plan dilutes the enormous efforts by IBAC in achieving global acceptance of IS-BAO.

The wounded (by the collapse of JetDirect) aircraft management/charter industry does not need a battle like this.

Business Aviation, Twittering the Recovery

The cover of the June 15th edition of Time magazine is a picture of an iPhone, or a similar device, with a Tweet about the cover story on Twitter, the innovative fast growing social network. What could this possibly have to do with the recovery and growth of Business Aviation? Read on.

In my last article for Hangar Talk I wrote about Glenn Hutchins, founder of Silver Lake, and his prediction that innovation would lead us out of this recession. This week in the cover story for Time Magazine, author Steven Johnson writes about the amazing growth of Twitter, the social networking site that has grown using "end-user innovation," a concept that Johnson explains as, "where consumers actively modify a product to adapt it to their needs.”

Twitter was introduced to the Internet and the social networking community in 2006 and like blogging was picked up first by teenagers as a way to stay connected. They have a compelling need to know what their circles of friends are doing. In fact when you go to Twitter the first thing you see is a text box asking the question, “What are you doing?”

When I first saw this my questions were, “Who cares, and why do I want to know?” But alas I am not a teen or even a 20 something, but believe me, they want to know. Not what I am doing, but what their circles of friends are doing. Then came The Campaign. Hundreds and maybe thousands of young campaign workers wanted to stay connected. With Twitter they could do so, and view the Tweets, which are limited to 140 characters, on cell phones and BlackBerries as text messages (SMS), and on computers. I have a feeling that the need for Twitter feedback, and not just email, might have been behind President Obama’s fight to keep his BlackBerry.

Johnson tells of attending a small private conference on the future of education attended by 40 educators, entrepreneurs, scholars, philanthropists and venture capitalists. At the beginning the organizers announced that anyone could record their comments and questions on Twitter. During the conference comments were being displayed on a screen. Before the end Tweets were pouring in from far beyond the confines of the room where the attendees were sitting.

This week I am attending the Air Charter Summit where over 100 business jet operators will be assembling at a hotel and discussing how to address and solve some of the very significant challenges facing the business jet industry. Will this group be Twittering their thoughts in real time along with many others not at the meeting? Maybe not, but think about how more productive the meeting might be with thoughts, not just from the 100 physically present, but from many others not able to attend in person.

(Full disclosure, Steven Johnson, the author of five best selling books, contributor to The Wall Street Journal, The New York Times, The Guardian, Wired Magazine, and a futurist much in demand on the lecture circuit, is my nephew.)

Will Innovation Lead the Way?

Glenn Hutchins one of the founders of the highly successful private equity firm Silver Lake, after studying and outlining how we got into this mess, sees the way out - Innovation.

Hutchins says, "While at times rushed and incoherent, the public policy response to the crisis has been breathtaking in its scale. The approximately $10 trillion in resources shoveled at the problem dwarfs any prior undertaking in our history including World War II - which is estimated to have cost $5 trillion in today's dollars. This is the all-important difference between today and the '30s. In contrast to the passive and counterproductive actions taken then by the Hoover administration and the world's central bankers, today's leaders - having learned the lessons of the Depression and quickly grasping the ramifications of the Lehman failure - resolved to err on the side of doing too much rather than too little."

Hutchins is may be right about innovation but consider that ninety percent of new products fail. Venture Capitalists have shoveled billions at innovation for years yet only one in ten shows any return and most are returns are modest. The aviation is landscape is littered with the wrecks of the dreams of dreamers. The Eclipse Jet is only the most recent disaster.

Tony Ulwick developed a concept he calls Outcome-Driven Innovation® (ODI) and founded Strategyn, Inc., a global innovation management firm. ODI starts not with a product but by finding the answer to the question, “what does the customer want to accomplish? Or as Harvard professor Theodore Levitt often remarked, “People don’t want drills, they want holes.” DARPA didn’t want the Internet; they wanted a way to communicate.

I am concerned that throwing $10 trillion at our current problem might result in getting a lot of “drills” that don’t work very well. It may be too late to apply ODI concepts to what we need. But perhaps in a small way we can fund innovation in a different way. Ulwick and Jay Haynes have formed a new venture capital firm, Strategyn Ventures, to fund ODI proven products and services. If they can change the odds from 1:10 to something much less, perhaps innovation will lead the way out.

A Marvel, Misunderstood

Why are we vilifying a $100 billion sector of our manufacturing economy? The business jet is an important tool that permits businesses to compete effectively in multiple locations domestically and internationally. It has been documented that the most profitable companies own business aircraft. Cessna Aircraft (Textron), Gulfstream (General Dynamics) and others are tightening their belts against the economic tsunami, but perception may be their greatest challenge.

Who is responsible for the economic mess we are in? We all are, says Steven Pearlstein in a column in the Washington Post, “Let’s Put Down the Pitchforks.” Today the villains are the AIG bonus recipients, the Treasury Secretary, members of Congress, and so on. For the last few months it has been almost anyone seen stepping on or off a business jet.

On Super Bowl Sunday the New York Times published an Op-Ed piece by Bill Garvey “The Mile High Office.” Bill gives the example of two competing companies. Both travel to a prospective client’s office. One company travels by a business aircraft that can fly directly to almost any airport. The other takes the commercial airlines. The latter suffered through security lines, perhaps changed planes and maybe missed a connection and arrived, well let’s just say hassled.

Guess which company has the best opportunity to close the sale? The business people with the corporate jet won’t just arrive faster; they’ll also show up better prepared, rested and alert. In their own airplane they were free to discuss confidential information or polish up a PowerPoint presentation. They were able to use phones, BlackBerries and the Internet en route. In other words, they were in their office while they were traveling.

Malcolm Forbes called his business jet, "The Capitalist Tool." Warren Buffett called his first business jet "The Indefensible," and then quickly renamed it "The Indispensable," and then bought NetJets, the largest operator of business jets in the world.

The business jet manufacturers are seeing orders canceled and backlogs shrink. Major suppliers like General Electric (engines), Honeywell (engines and avionics) and many others are feeling the effects of the slow down. This manufacturing industry is far different from the auto industry. Not one business jet manufacturer has asked for bailout funds, and I predict none will. The biggest threat is the negative public image inflicted by grandstanding members of Congress and a President who is trying to distract attention from a failing financial system, a broken economy, and mistakes by his own administration. CEOs do not disappear on business jets. They are off closing deals, fixing assembly lines, and yes, flying to Washington to raise funds to save the auto industry.

Miracle in the Pacific

About 45 years before US Airways Captain Sully Sullenberger successful ditched an Airbus in the Hudson, a Pan Am crew, flying Flight 943, a Boeing 377 Stratocruiser, did the same in the Pacific halfway between Hawaii and California. The ABC Evening News ran the fascinating story, The Hero Pilot of 1956, in mid-February. The Boeing 377 was the last of the large commercial transcontinental/oceanic piston engine transport aircraft. It had private staterooms and a lower deck lounge. It was just a few years after this accident that the jets arrived – first the Douglas DC-8 and the Boeing 707.

My wife Nancy was a flight attendant for Pan Am in the 1970s. After leaving Pan Am, she worked as a safety specialist for the Association of Flight Attendants. Pat Pimsner, a flight attendant on Flight 943, tells of her experience that day, October 16, 1956. My wife says Pat reminds her of her boss, Del Mott. Bright, beautiful, and tough is how Nancy remembers her. Del is also a former flight attendant who became a safety hawk and is credited with many of the cabin safety procedures that are common today. Some no doubt helped bring about the more recent Miracle on the Hudson.

Note: After she read my original post, I received an e-mail from Del Mott explaining that Flight 943 was not a DC-7, but was a Boeing 377. After a little research, I discovered that of course she was correct and I made the change. Thanks Del.

Gliding to a Soft Landing

Last year the words “soft landing” appeared frequently in the press. They were used to describe the economy. Today “crash” is the word we hear most often. For a few days in January, the media moved Wall Street and the economy to page 2. "The Miracle on the Hudson" became the lead story. A select few really understand how this could happen. The emergency landing of US Airways flight 1549 was not a miracle, but the result of a crew that remembered their training, and a pilot with a glider rating who understood and had experienced “off-field landings”.

For many years I flew gliders, or sailplanes as they are known to those in the sport. Racing sailplanes is very similar to sailboat racing but with a third dimension. I was a Naval Aviator for 5 years flying carrier-based jets. I have flow many different aircraft. Sailplanes have always been my favorite. It was in these aircraft I really developed my flying skills.

The article (click this link), “Training for that Moment When Every Second Counts”, explains how Captain “Sully” Sullenberger accomplished the amazing feat of saving his passengers and crew. In this article you will see a couple of pictures including one of a sailplane water landing.

My sailplane was a LS1-f (similar to the one below). I landed it often “off-field” but never in water.

New York, New York

It would have been impossible for anyone to have missed the amazing story of US Air Flight 1549, and the heroes of this event – the crew and first responders. However, some may have missed a story in USA Today only a few days before, “Airlines Go Two Years With No Fatalities”. When a flock of Canadian geese tried to end this streak, New Yorkers saw to it that everyone aboard was safely on ferry boats that beat NY Fire Department rescue boats to the sinking plane. As a write this a New York City parade of heroes is being talked about.

One man, who should be in the parade and probably will not, is a former New York City cop. Nick Sabatini, the FAA’s Associate Administrator for Aviation Safety, retired at the end of 2008. Nick began civilian life by joining the NYC police department after completing a tour with the Army where he was a helicopter pilot. In 1979 he joined the FAA and he spent next 30 years with a safety bone in his teeth. No one person can lay claim to the outstanding safety record that all aviation enjoys, but no one doubts that Nick made a significant contribution.

Food for Thought

Many years ago I met Wilbur Ross who was a college and business school classmate of a friend of mine. Since that meeting Ross has become a billionaire. He began his business career (he first aspired to be a writer) by gluing back the wrecks of Michael Milken's junk-bond financings. Last fall he was interviewed on National Public Radio. He talked about one of his newest investments, SpiceJet, a low-cost airline in India. During the interview he elaborated on one of the reasons for his investment in SpiceJet:

“India is a very large land mass, very large distances between the major population centers, but ground transportation is very, very difficult. They've not put enough into infrastructure for roads or even railroads to make that a very good means of transport. So air transport, we think, is uniquely important to India.”

I found this interesting because the same can be said about many other emerging economies, such as China, Russia, etc. And when you think about it - how easy is it to get to places like Spring Hill, Tennessee (the location of the original Saturn plant) or many other small factory towns in the United States? Driving, taking a train, or bus is not practical when speed is of the essence to restart a shut-down assembly line.

The three Detroit automobile CEOs should have taken a page from Lee Iacocca when he came begging for loan guarantees in he early 1980s. Iacocca replied to the grandstanding congressmen when they suggested he sell his company’s Gulfstream jet, “OK, I’ll sell it, but I will be damned if I know how I will run Chrysler’s plants in small towns all over the USA. I guess will just have to lease it back.” And that’s what he did, and he saved Chrysler.

How Iacocca got to Washington is not known, but it was not the public relations disaster of last fall. The Washington offices of the car companies advised the CEO not to fly to Washington in their companus’ jets. Thet ignored the advice and the rest is history.

And where is Iacocca when we need him. Well he is back and has written a new book, Where Have All the Leaders Gone? If you have an answer, post a comment below.