Corporate planes give business owners an edge
12/13/2012 6:39 AM
12/13/2012 6:41 AM
If it wasn’t for business aviation, the Berry Companies wouldn’t be the company it is today.
“We wouldn’t be nearly as far flung,” Walter Berry, president, said of the Wichita-based company’s eight divisions and 29 locations in six states – Wyoming, Colorado, Kansas, Oklahoma, Missouri and Texas.
“We wouldn’t have looked at opportunities as far away. ... We’d be a lot smaller.”
Walter and his father, company chairman Fred Berry, both pilots, have used a variety of airplanes over the years to fly themselves and staff members to their growing number of sites.
Last year, the company moved up from a Socata TBM 700 turboprop to a faster, higher-flying Cessna Citation Mustang light business jet.
Company officials say they make about 75 business trips a year.
The plane can leave Jabara Airport early in the morning, for example, fly to Garden City for meetings, over mountains for meetings in Grand Junction, Colo., back across the Continental Divide to Cheyenne, Wyo., and then to Denver— all in a day. They then hold meetings again the next day.
“Commercially, you couldn’t do that,” Walter Berry said.
Berry is one of a multitude of Wichita-area and Kansas businesses – car dealers, bankers, manufacturers, oil companies, health professionals and others — who rely on business aviation.
Last month, a study of U.S. Standard & Poor’s 500 companies by NEXA Advisors concluded that companies that used business aviation during the economic downturn — from 2007 to 2011 — outperformed competitors that did not.
The companies had better profits, created more jobs and were among the best managed companies in the U.S., according to the research, which was sponsored by the aviation industry.
The findings also indicated that companies using business aviation recovered from revenue setbacks more quickly and were more likely to grow their workforce.
Past studies looking at smaller companies showed similar results, said Ed Bolen, president and CEO of the National Business Aviation Association, which sponsored the study along with Bombardier Aerospace and Embraer.
“In Wichita, everybody knows that business airplanes represent good manufacturing jobs,” Bolen said. “But they’re also critical to companies all over the United States.”
Business aviation provides a valuable tool and a competitive edge, he said.
“Companies that use business airplanes are outperforming their competitors in the same industry that do not use the airplanes,” Bolen said. “That’s the bottom line.”
The number of Fortune 500 companies relying on business aviation has risen in the past four years, Bolen said.
“At times of economic pressure, companies need to be efficient and proactive,” Bolen said.
At Berry Companies, the use of an airplane “allows us to get out with our people, and we think that’s important,” Walter Berry said. The Wichita office is the administrative group for the various divisions and provides the accounting, processing, payroll, insurance, advertising and financial services.
The ability to visit multiple locations in a day and get employees home at night has value, Berry said.
And “If a meeting runs over, I have the keys in my pocket,” he said.
Walter Berry, with more than 2,700 flight hours, does most of the flying. Fred Berry no longer flies.
The company also uses backup pilots from Aviation Dynamix.
The Mustang is an investment, said Fred Berry. “But it’s a long-term investment.”
The jet will serve the company for 20 years.
Still, the trips must make sense.
Operating costs for the Mustang run about $700 per flight hour, Walter Berry said. That cost will rise once the plane is out of warranty.
A trip in the Mustang with its seats full beats the cost of airline tickets.
Flying with the plane half full is a convenience.
And if you fly alone?
“You pay a premium,” Walter Berry said.
“We do go through that equation,” he said. “If I’m flying alone or one of our people is flying alone, we would tend to use the airlines.”
A jet such as the Mustang might be more difficult to justify if there weren’t multiple people needing to travel, Berry said.
“Or you might justify a single-engine piston plane as opposed to a jet,” he said. “It (the plane) does need to be geared toward how you’re going to use it.”
Local companies use a variety of single-engine and twin-engine airplanes to do business.
Chuck Pierson, a dentist with Wichita Family Dental, uses a twin-engine Cessna 421 in his practice, which employs 30 people, including three other dentists.
Two-thirds of the time, Pierson does the flying.
He flies staff members and dentists to continuing education classes to learn the latest in clinical procedures, techniques in making crowns or performing root canals or on updating computer software.
The ability to get to training and home in the same day is a convenience, he said. And it saves money on hotels and meals and additional pay for more time on the road.
Recently Pierson and another dentist jumped in the airplane on a Wednesday to look at dental equipment in Colby, a trip that would have taken four to five hours of drive time.
“There’s no way we would have driven out there on a Wednesday night,” Pierson said.
Andy Smith, president and owner of Alltite, a distributor of industrial maintenance equipment, began using a plane in his business after he flew to Grand Junction, Colo., with a friend, who then let him borrow both the airplane and pilot for the week.
Smith did business in seven cities in Colorado, Utah and Wyoming and was back in Wichita on Thursday in time to watch his son’s baseball game.
Without the plane, visiting that many customers would have taken three separate trips over three weeks.
He was sold.
Smith decided then that he wanted to learn to fly and turned to the pilot, Steve Hinkle, for advice.
Hinkle became his flight instructor. Smith earned his private pilot’s license in March 2011. He earned a multi-engine rating in August and is working on an instrument rating.
At the same time, Smith sought advice from Sabris Corp. for help in buying the right plane for his business needs.
“We went through many different models and picked it out based our mission and what we were going to be doing,” Smith said.
He bought a 1978 twin-engine Piper Aztec.
For now, Smith typically flies with another pilot on board, unless he’s sure the weather will let him fly under visual flight rules.
His customers are in rural communities without commercial airline service.
“I go to where there’s wind farms and refineries and oil fields, and they’re never in big cities,” Smith said.
Getting from Grand Junction, Colo., to Vernal, Utah, would take him hours.
It would take three hours just to drive over Douglas Pass, a mountain pass in Colorado located between the two cities, because of switchbacks, winding roads and slow traffic.
“In an airplane, it takes 30 minutes to get over the pass,” Smith said.
He often takes along sales staff and the pilot drops everyone off in various cities to see customers, and then picks them back up.
The plane has allowed the business to grow quickly.
“I can close deals that I otherwise probably wouldn’t be able to do,” Smith said.
He’s been able to add sales staff and plans to add more.
When a customer is in a bind and needs a part, Smith can send the part out right away.
“When you do that, you’ve got a customer for life,” he said.
His small company competes with much bigger businesses.
“But the president and CEO of that company doesn’t go to the middle of Nowhere, Texas,” he said.
“When someone says the president of our company is going to fly down there and see you, that’s a huge benefit,’ he said. “They don’t know I’m not flying in a $12 million Learjet, but I still get there.”
There’s nothing inexpensive about owning an airplane, Smith said.
The cost of fuel, maintenance, oil, hangar rental, insurance and other costs average about $320 a flight hour.
But, “it makes complete sense,” he said. “I’m using the plane to make money. ... It allows me to be more places and do what I’m good at.”
He doesn’t use the airplane, however, on trips that take two hours or less to drive.
“I’m not a millionaire,” Smith said. “I’m a regular guy with a little airplane. But it works out for what we do.”
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