The hot topic lately, especially among aircraft owners, seems to be fuel efficiency and lean of peak. Oddly, in an economy where fuel costs are eating away at the bottom line, “lean of peak” is a perfect analogy of where most flight schools find their profit margins.
Cost control is always paramount to increasing profit, but how do we combat the rising cost of fuel and insurance? Many flight schools are passing on additional fees in the form of surcharges to their students. But with student attrition already wreaking havoc in the industry, pushing them over budget will just keep edging them out the door.
Instead of taking the blows, fight back and “go green.” If you can’t fork out the cash for fuel efficiency modifications or avionics upgrades to your aircraft, then team up with your A&P to develop a solid business proposal for a prospective investor or banker.
Technical jargon, statistical data, and performance assurances from an FAA-licensed professional mechanic will show that you’ve done your homework, illustrating that you are a careful, savvy business manager not willing to put your operation at risk of falling behind the competition and able to meet growing demands. Use aircraft sales comps to illustrate the initial investment will actually increase the value of your aircraft assets. Demonstrate that not only can you increase profitability by cutting fuel and maintenance costs tremendously with efficiency modifications, but you can substantially lower insurance rates by installing improved safety equipment. Presenting a complete picture can definitely strengthen your position in obtaining financing.
Terra Evans
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