How will the recession affect corporate/charter?

[Capt1124]

A recession is beginning, and some marginal airlines have shut down. There will probably be more.

I have been through a recession in the cargo business, but not the corporate/charter business. Fuel prices haven't seemed to have had much effect, people with the money to fly this way seem to have just paid it.

At some point though I think corporate income has to be affected. How do you see this playing out? Slow hiring? No hiring? Layoffs? Or will it not have much effect?

 

[willNOTfly4free]

The only thing I noticed at my previous charter job was a higher percentage of business trips opposed to vacation trips. I had yet to see a slow down in flying as of last month when I left.

Some charter and corporate pilots might notice fewer golf clubs being taken on trips, but not much more than that. I do not foresee pax charter pilot layoffs and corporate flight department shut downs.

In my opinion, a full blown pt 91 corporate flight department does not run as tight of a budget as some 135 and 121 operators. Again, just my opinion, we corporate pilots also have more options available to control costs and are not as directly impacted by the increase in cost of a gallon of fuel.

As far as recession concerns, it depends on the industry segment a flight department is connected with. Health care and energy companies probably aren't hurting right now.

 

[blzr]

Also would depend on the type company you are with. If you are with an energy related company you may be getting more flying, conversely, if you are with a real-estate related company, you may not fare as well.

 

[Captain Morgan]

I was always under the impression that the first thing to go at a company was a flight department. I hope not, but that's just what I've been told. Good luck to all pilots in every corner of this industry, we're gonna need it!

CM

 

[Coool Hand Luke]

I was always under the impression that the first thing to go at a company was a flight department. I hope not, but that's just what I've been told. Good luck to all pilots in every corner of this industry, we're gonna need it!

CM

Well Morg, as with most of us here, I had the unfortunate experience of having a flight department (part 91) I worked for close it's doors. We were one of the last departments in the company to go. Ironically, after securing a part 135 job a few weeks later, I had the pleasure of flying our bankrupcy lawyers out to Delaware to liquidate our assets.

With this American Airlines debacle (and a few others) stranding pax left and right I'd say corporate departments (and the frax) are as safe as they have ever been, even with the price of gas.

 

[willNOTfly4free]

I was always under the impression that the first thing to go at a company was a flight department.

That's what the haters say.

A properly utilized corporate airplane is not a luxury. Rather it is an essential, time-saving, business-growing tool.

 

[DLS]

I just had the Pilatus PC 12 sold by the owner due to the economic decline in the US. The owner has 13 auto delearships in CA and AZ. I was the one man flight dept.

 

[400A]

In the past I have seen a slight reduction in Smaller Corporate departments and an actual small increase in 135 fleets. It sometimes forces those who are on the edge to put their aircraft into part time 135 service to help out in the slack times. The primary reduction will be in fleets that are over financed or the plane does not really meet their mission.

I am always careful in aircraft selection to not airplane myself out of a job. The Boss can afford anything he wants, but for our normal 1.4 hour stage length with 2-4 pax we do not need a huge aircraft. Our recent change from a 400A to a new Premier 1A makes me sleep much better at night. No Mx bills, and an average of $1000 less fuel on our normal round trip. No dispatch problems so far. Fun to fly too!

 

[Shag McNasty]

Any flight department can be adversely effected by a merger, acquisition, downsizing or change in top level management in good times and in bad. Poor economic performance is not neccessarily an indicator of when any of the above will occur. It's been said here before- The only thing that matters is whether the "Big Guy" wants to keep the airplane or not.

 

[psysicx]

I just had the Pilatus PC 12 sold by the owner due to the economic decline in the US. The owner has 13 auto delearships in CA and AZ. I was the one man flight dept.

Must be one of the american brands. Sucks bad.

 

[400A]

Must be one of the american brands. Sucks bad.

True, but one of our Nissan stores is off a bit. The others are doing well. I am aware of one guy who paid a few million to get out of a Ford store.

 

[AA717driver]

Off topic: In the mid to late '90's, Ford offered to buy out some of the larger dealerships and make them "company stores". The owners revolted because Ford was in the midst of a revival.

Bet they wish they'd taken the deal now...

On topic: I rarely ran into a corporate pilot who hadn't had at least one department shut down on them. I think that's just the corporate aviation business.

If I were the frac's, I'd be jumping for joy right now. Between the economy and the airlines tanking, I'm sure their business (and that of new-entrant 91 departments) will be booming. IMO. TC

 

[hawkerflyer]

While I agree that corporate may fare a bit better than expected, especially when you see what's happening at the airlines, I don't know that anyone is out of the woods. The amount of posts regarding flight department closings is noticeably up on NBAA's AirMail message board. Pfizer just announced the closing of its EMB-145 shuttle operation. Also, if you look at the increase of aircraft entering the preowned market in recent weeks, it's pretty substantial. Our flight department is 90% business travel and will continue to be a necessity, not a luxury but I do believe that the prices of Jet-A will have a negative effect on many small to mid-size flight departments.

 

[psysicx]

So its a good time to buy a ford dealer?

 

[Hawker800]

Our flying has actually picked up this year. (Pt91) A friend was just laid of by JSSI. Several field reps and some sales people also. Not good sign.

 

[part61]

some folks are looking for the economy to dump and then buy another plane at a bargin price.

I believe post 9/11 some GIV's were selling for about 11M, maybe it will happen again...

 

[Jetdriver69]

It hasn't affected us one bit. In fact we just hired two new pilots and are flying more.

 

[stupidpilot]

I don't think it will affect it much either. The filthy rich will remain filthy rich, and will still be able to afford to do what they want to do.

 

[pilotyip]

That is my experience also

I was always under the impression that the first thing to go at a company was a flight department. I hope not, but that's just what I've been told. Good luck to all pilots in every corner of this industry, we're gonna need it!

CM

When a company has tuff times, the first thing to go is the Flight Dept. It happened to me at a Fortune 500 auto parts maker in 1982, I became the first pilot in their company history to be laid off. I watched it happened to friends of mine at Chrysler, K-Mart, Ford Motor Company, the Drug Company in Kalamazoo used to be Upjohn, US Steel, some dept store chain out of St Louis, MO. Job security in the Corp world is not a sure thing.

 

[Corp Pilot]

Job security in the Corp world is not a sure thing.

There is no such thing as job security in ANY occupation.

 

[sleepy]

My company has hit rock bottom withthe housing problems and recession. We are still making $2 billion a year (down from $4 billion a few years ago) and we are flying more than ever as they work to fix problems in our stores. If our department can survive this then I don't ever see us having a layoff in the future.

 

[pilotyip]

I felt the same way

My company has hit rock bottom withthe housing problems and recession. We are still making $2 billion a year (down from $4 billion a few years ago) and we are flying more than ever as they work to fix problems in our stores. If our department can survive this then I don't ever see us having a layoff in the future.

I felt the same way until the lay off, we flew a lot prior them pulling the plug.

 

[sleepy]

I felt the same way until the lay off, we flew a lot prior them pulling the plug.

Well, you never know anymore in any business. Only executives have job security (with their contracts and buyouts, they always land on their feet).

 

[Gulfstream 200]

My company has hit rock bottom withthe housing problems and recession. We are still making $2 billion a year (down from $4 billion a few years ago) and we are flying more than ever as they work to fix problems in our stores. If our department can survive this then I don't ever see us having a layoff in the future.

Often the numbers you see have nothing to do with the departments longevity.

 

[sleepy]

Often the numbers you see have nothing to do with the departments longevity.

True. Any Fortune 50 corporation will have any aircraft they want for as long as they want it. If they decide to get rid of a flight department it will have nothing to do with the actual cost of the department. It could be shareholders, bad flight department management (which you often see), or just a whim..... They could replace it with a management company, a fractional, or just the airlines. Nothing we can do about it.

 

[Publishers]

I am often reminded of two meetings that I attended many years ago. At one, it was a group of corporate executives in a midwestern city and a number of them had aircraft. Interest rate levels were high and all were concerned about the economy and where things were going. Several were discussing canning their aircraft and using mine on a charter/block time basis.
That same week, I attended an aviation meeting in the same town and because our flight operations were under my position. You would of thought you were in a different country. All of them were looking for newer bigger aircraft and their departments were going to be hiring. Many of those companies and flight departments do not exist today.
I have already seen three significant aircraft sold and the people let go in the first quarter of the year.
It is rarely that a company cannot afford the aircraft but deteriorating margins that bring the department down.