SPECIAL ADVERTISING SECTION // BUSINESS AVIATION

THE BEST-KEPT SECRET OF WRITTEN AND PRODUCED SUCCESSFUL COMPANIES BY MARK PATIKY

Despite a vacillating U.S. economy, the need for a company With necessary cost cutting, slim management ranks and plane appears to be stronger than ever. What’s driving it? a lot more territory to cover, time is the currency of the new “When business in general takes a downturn, that’s the time economy. This has not gone unnoticed by the more than when you’ve got to get out and see people more frequently. 15,000 companies, entrepreneurs and individuals in the We’re doing that, we’re growing, and our business aircraft are U.S.—mostly small and midsize fi rms—that operate more a big part of that,” says Edmund O. Schweitzer III, President of than 23,000 business aircraft. These aircraft are essential Pullman, Wash.-based Schweitzer Engineering Laboratories. tools in today’s global economy.

FLIGHT LOGS // REAL-LIFE BUSINESS AVIATION SUCCESS STORIES

DR. TIRON MIKE KURT DANNY BURKE PECHET LEEDS CROSBY LAVY JONES Radiologist Former CEO, CEO, Crosby CEO, Elite Independent CMP Media Tugs LLC Group Inc. Real Estate Investor PAGE 3 PAGE 4 PAGE 6 PAGE 8 PAGE 10 ADVERTISEMENT 2 // THE ENLIGHTENED BUSINESS TRAVELER

certainly won’t get there easily via airlines, which serve barely Your How-To Guide to 10% of these non-hub locations. It’s not only busy schedules that are driving the growth of a New World of Travel business aviation—it’s bottom-line results. A study of the S&P The Enlightened Business Traveler is your boarding pass to this 500 companies by Virginia-based consulting fi rm NEXA Advi- new world of travel. It examines business aircraft types, details sors LLC found that over a fi ve-year period, companies that the diverse access options, and illustrates how businesses and used business aircraft had twice the total shareholder return entrepreneurs with varied travel requirements are strategically of companies that did not. employing business aircraft to meet existing challenges and cre- “You have the freedom to operate on your own schedule,” ate new opportunities. But, most important, it discusses the ease says Lars Thrane, founder of Denmark-based global satellite with which you too can literally create time in your busy schedule. communications company Thrane & Thrane. “That’s a neces- sary part of our business. That effi ciency and fl exibility is an Time Flies—Shouldn’t You? essential factor in our success.” In addition, Thrane points out, Far from being the excessive indulgence mass media makes today’s business aircraft are often better equipped than many them out to be, business jets help a growing number of today’s offi ces, featuring phone, fax, TV and wireless Internet. So you savvy business leaders build strong bonds with customers and don’t just get there faster, you get there ready. clients. “Our planes are critical to our growth,” reports Danny The best part is you don’t even have to own an aircraft to gain Lavy, President of Montreal-based Elite Group Inc. all the valuable benefi ts. New access options such as jet cards “In this age of technology, a lot of people take personal rela- and fractional ownership have opened the skies to businesses tionships for granted. I think they’re making a big mistake,” says of all sizes, while new aircraft and technologies are making the Arthur Allen, President of Naples, Fl.-based ASG Software Solu- fl eet more fl exible, affordable and capable than ever. tions. “Our airplane allows us to bring our people together with clients, conduct real business and resolve issues face-to-face. It is an unbelievably effi cient use of our time,” he says. “You have “Our airplane allows us to bring our people to be out there with your customers and fi nd out what’s really together with clients, conduct real business and going on; it’s amazing what that really does.” resolve issues face-to-face. It is an unbelievably In addition to those that own their own airplanes, another effi cient use of our time.” 8,000 or more have chosen fractional ownership and prepaid —Arthur Allen, President, ASG cards, and thousands more companies and individuals enjoy the freedom of on-demand charter during any given week. And these planes are not just essential tools for senior execu- tives: According to a Louis Harris poll, over 70% of passengers aboard business aircraft are from mid-level ranks—salespeople, engineers, researchers and technicians. The trend is paying big dividends in time and opportunity.

New access options such as jet cards and fractional ownership have opened the skies to businesses of all sizes, while new aircraft and technologies are making the fl eet more fl exible, aff ordable and capable than ever.

Moving at the Speed of Business Business aircraft enable busy executives to visit multiple cit- ies in a day; to compress long, wasted hours of commercial air travel into short, intensely productive periods of time; and to bring key prospects to a facility. With the ability to land at 5,000 local airports across the country, these business aircraft provide unfettered direct access to virtually any community. And, given the dividends, they’re surprisingly affordable. You THE ENLIGHTENED BUSINESS TRAVELER // ADVERTISEMENT 3

The Ultimate Productivity Tool Companies around the globe with their own business air- craft are traveling when and where they want to with speed, safety and security. There is a vast range of aircraft choices, and each manufacturer and each model presents unique advantages. While many companies acquire their own plane and oper- ate it in-house, others outsource the operational responsi- bilities to management fi rms that take care of every detail. That means access to your plane and the rest of the world is only a phone call away. In addition, when your plane is “Companies today are trying to do more with idle, the management company can charter it. That’s been a less, and that means making the most bonus for Mike Leeds, the former CEO of CMP Media, who owns a Falcon 50. With limited fl ight requirements, he offers productive use of their most precious assets: his jet for charter when he’s not using it. The charter revenue people and time.” offsets some of the fi xed ownership cost. — Ed Bolen, President and CEO, NBAA

FLIGHT LOG

DR. TIRON PECHET enjoyment without losing half of it to commercial travel sched- Business: Radiologist ules or tiresome road trips. “We can drive an hour away from Boston and not even reach Cape Cod, or we can take a one- hour fl ight in the Phenom and be in Washington, D.C., or visit family in Pittsburgh. It’s great when you don’t have a lot of time. Now the enjoyment starts the moment we get to the airport.” Pechet has been fl ying jets for several years, but he was drawn to the Phenom 100 because of its level of sophistica- tion, self-diagnosing systems engineering and automation. “It turned out to be an incredible airplane,” he says. If there is any maintenance issue or concern, he can send the computerized data direct from the plane to technicians in . “By the time you pick up the phone, they’ve analyzed the problem and can talk about solutions.” The spacious cabin is another important advantage for Pechet. “The passengers have a lot of space and a lot of light. They just love it back there,” he says, adding that the fully enclosed lavatory, which can be converted to an additional passenger seat, is a big plus when traveling with family. n addition to being a formidable business tool, ’s The Phenom has been an all-around winner for Pechet: “It is Phenom 100 is also an affordable and effective choice for by far the most economical jet in this category, and it is 15% I those who, like Boston-based radiologist Dr. Tiron Pechet to 20% less expensive to operate than the turboprop we previ- and his two partners, own and fl y the small jet. All three have ously owned.” Pechet is also delighted with the Embraer Exec- equally hectic work lives, and, like many whose work infringes utive Care and Pratt-Whitney Engine Plan, through which—as on quality personal time, an airplane is just the ticket. “It is a with a bumper-to-bumper warranty—maintenance becomes great way to get around and take full advantage of precious and a predictable budget item. There are no surprises, he points often-fl eeting opportunities to be with my family,” says Pechet. out. If the Phenom works this well for an individual, imagine For Pechet, using the jet for a weekend away with his wife what it can do for a company. “From a business perspective and two young boys means he gains two or three days of it’s effi ciency, affordability and practicality combined,” he says. ADVERTISEMENT 4 // THE ENLIGHTENED BUSINESS TRAVELER

FLIGHT LOG

MIKE LEEDS says Leeds, had to do with the ability to meet frequently with Business: Former CEO of CMP Media clients. There’s no doubt that a business aircraft played a vital role in Leeds’ success. “You can see more customers, you can motivate more employees, and you can make the company stronger in so many ways by being more places in a short amount of time. We could take people who would be valuable in these meet- ings because we had the seats, and we could get them back very quickly. It was effi cient and effective. The key is time sav- ings, productivity and the actual business opportunities that are created as a result of going,” he explains. When he was planning the IPO, his was equally essential: “You could never see as many potential investors and institutions as we did in a couple of weeks without a business aircraft.” After leaving CMP, Leeds bought a Dassault Falcon 50 for his independent business interests. Leeds uses his plane about 150 hours per year and charters it for as many as 600 hours annually. With its three engines and enhanced low-speed aero- dynamics, the Falcon 50 is unique because of its ability to land or depart from challenging airports while maintaining ike Leeds took over his family’s small publishing busi- demanding safety margins. “We can operate without compro- ness in 1988, boosted sales by a factor of fi ve, doubled mise at high-altitude airports like Vail or Eagle Creek, Colo., M the number of employees, and took the company— or from small local airport runways like the one in Princeton, which evolved into the publishing giant CMP Media—public, N.J., that even smaller jets can’t negotiate.” For Leeds, it’s the and sold it for $940 million. Much of that growth and success, perfect charter aircraft.

Jet Cards, typically sold in 25-hour increments, make frac- Fractional Ownership tional ownership benefi ts even easier to acquire. There is no major investment or asset-value concern. Buyers prepay for and Jet Cards usage based on fixed hourly rates and, unlike with charter, Fractional ownership has enabled thousands of companies and there are no positioning or empty return-leg costs. When hours individuals—many of whom never imagined it possible—to gain expire, you simply walk away without further obligation. all the benefi ts of a business aircraft plus many unique advan- tages whole aircraft owners don’t have. The idea is simple: Why NetJets buy an entire aircraft when you need one only part of the time? More than a quarter century ago, Berkshire Hathaway’s For a fraction of the whole aircraft price, buyers gain full NetJets® Inc. pioneered the idea of fractional ownership. It business aircraft advantages. Every management and opera- remains the global leader, with 7,500 fractional and jet card tional detail is taken care of. Your plane is guaranteed, ready owners that fl y to more than 170 countries annually. It also has when you are, anywhere across the nation. the largest and most diversifi ed business aircraft fl eet, with In addition to the capital investment, owners pay a monthly more than 700 aircraft worldwide comprising 13 aircraft types. management fee plus a fi xed per-fl ight-hour charge, but only NetJets also offers the broadest range of business aircraft for the time spent aboard. Unlike charter, fractional ownership services, from fractional ownership to the 25-hour Marquis does not incur any repositioning or return fl ight charges. Own- Jet Card to charter and wholly owned aircraft management ers also gain access to an entire fleet, with the freedom to through its subsidiary, Executive Jet Management. substitute a larger or smaller aircraft depending on specifi c In addition, NetJets, which is the only provider with opera- trip requirements. tions in Europe, recently announced plans for NetJets China. ADVERTISEMENT 6 // THE ENLIGHTENED BUSINESS TRAVELER

Owners in any global area gain fl ight privileges in any other; begin entering the NetJets fl eet in April 2013. Like the Bombar- so, for example, a U.S. owner could fl y commercially to Hong dier jets, the Phenom 300s will have interiors custom designed Kong or Beijing and pick up his NetJets aircraft, or he could exclusively for NetJets owners. “The small-cabin jet looks fl y direct from any U.S. city in one of NetJets’ large-cabin and feels like a much larger one,” says Johnson. “It offers intercontinental-range jets. exceptional speed, range, reliability and economy unmatched While the economy remains in a multiyear holding pattern, in its class.” NetJets owners are on the move, reports NetJets North Amer- ica Sales, Marketing and Services President Adam Johnson. “Having a plane when and where we need it Sales are growing, fl ight hours are increasing and global travel has defi nitely paid off . It’s convenience, is on a sharp rise, he notes. safety and peace of mind knowing we can To accommodate strong demand for large-cabin, long-range aircraft on international routes—particularly to and from China— respond eff ectively.” NetJets recently purchased 50 ultra-long-range Bombardier —Kurt Crosby, CEO, Crosby Tugs LLC Global 5000, 6000, 7000 and 8000 aircraft, the fi rst of which will be delivered this year. The Bombardier Global aircraft, capable NetJets is forecasting clear skies ahead for business avia- of nonstop fl ights between New York and China or Indonesia, tion. The company recently signed yet another deal worth $9.6 underscores the intense focus on Asian business relationships. billion—the largest in private aviation history—for 275 Bom- The Bombardier purchase follows an earlier order for 50 bardier Challenger 300 and 605 aircraft and 150 of Cessna’s Embraer Phenom 300 Platinum Edition aircraft, which will newest midsize jet, the Latitude.

FLIGHT LOG

KURT CROSBY Crosby can’t afford to wait for an airline fl ight. Business: Crosby Tugs LLC With the local airport just ten minutes away, however, Crosby and his team—key managers from several departments who collectively fl y about 350 hours a year—take off on their own schedule, shave hours off trip times and get back quickly to tackle the next big call. Normally, they’re dealing with multiple projects simultaneously, says Crosby. “A typical trip requires them to get up and go immediately. I can arrive just minutes before takeoff, and we do our day’s work and normally come back that evening.” For years, Crosby fl ew with NetJets exclusively, but as his travel demands increased, his company purchased its own midsize business jet, which fl ies more than 300 hours a year. His Marquis Jet Card, which he uses about 50 hours a year in a NetJets Dassault Falcon 2000, remains the perfect supple- ment. Crosby likes the fl exibility: “Instead of just one type of jet, we have a fl eet to choose from depending on where we’re going and how many are fl ying. That is a big advantage to us,” ou might not expect a company operating a fl eet of lum- says Crosby. bering tugboats and barges to need Mach speed, but Although many small business owners think business jet Y Kurt Crosby, CEO of Crosby Tugs LLC, would beg to access is beyond their budget, Crosby is quick to point out differ. “This is a very competitive business, and we defi nitely that dollar amounts do not tell the whole story. It’s not about have to react quickly,” says Crosby, who never knows if his the cost of travel, it’s about the cost of doing business, he next opportunity will be around the corner or across an ocean. explains, and the ability to be there for his clients when it Of course, when you’re headquartered in a place like Gal- counts is priceless. “Having a plane when and where we need liano, La., time is not always on your side. The nearest com- it has defi nitely paid off. It’s convenience, safety and peace of mercial fl ight from New Orleans demands an onerous drive and mind knowing we can respond effectively,” he says. “We can nearly a half day is lost before the wheels have even left the take care of business and serve our customers better. We’ve runway. So when those deep-sea drilling rigs need to move, grown tremendously as a result.” ADVERTISEMENT 8 // THE ENLIGHTENED BUSINESS TRAVELER

Flight Options and programs that ultimately led to a 53% increase in new Well known for its innovative fractional ownership offerings, fractional owners during 2011 over the previous year. The Flight Options is creating new opportunities that give cus- company scored again with Jet Club Membership for the tomers a whole lot more for a whole lot less, says President Phenom 300. Mike Silvestro. Whether it’s a large-cabin, 13-passenger jet This latest program combines jet card benefits with per- like the , which comes with the price hour pricing that rivals fractional ownership rates. Similar to a tag of a midsize jet; or the small-cabin, best-in-class per- prepaid lease, Jet Club Membership eliminates major capital former like the Embraer Phenom 300 with unparalleled speed, investment and asset-value risk. After a one-time fee, mem- performance and range; or a totally remanufactured Nextant bers can purchase up to three 25- or 50-hour time blocks over 400, Silvestro is standing by the company’s core principle of 36 months. Growth in the Phenom 300 membership program providing added value. has been exponential. For example, Flight Options’ older Hawker 400s are being For those with more modest flight-time needs, Flight Options replaced with the completely manufactured Nextant 400XT, also offers 25-hour JetPASS Jet Cards for the Hawker 400XP, which features a 30% lower operating cost, a thousand-mile Hawker 800 XP, Citation X and Legacy 600. range increase, latest-technology digital cockpit, all-new inte- riors and new fuel-efficient Williams engines. In addition, the ever-popular Flight Options Citation Xs are undergoing a total “You have to be very innovative. I think, makeover inside and out featuring winglets for greater fuel opportunity-wise, this is actually a better time to economy and improved performance at a lower cost. get out in the market and grow your business.” It was Flight Options’ alluring combination of products — Danny Lavy, CEO, Elite Group Inc.

Flight Log

Danny Lavy a wholly owned Dassault Falcon 2000LX, which flies more than Business: Elite Group Inc. 350 hours per year on the increasing number of international flights to Europe and beyond. Many flights make more sense commercially, but if his team can see more customers and create more opportunities, it uses the Flight Options aircraft, which can pick up and drop off any- where. “We’re able to use the plane that’s best suited for the flight depending on the number of passengers and distance,” he says. When a large group is flying, it will use the Embraer Legacy 600 with its 50-foot-long cabin and spacious comfort for up to 12. “It gives us tremendous flexibility.” Lavy recently returned from a three-week European sales tour using his Falcon 2000. The Falcon’s ability to fly long dis- tances and negotiate shorter runways was a huge advantage, enabling him to use smaller, local airfields versus the heavily hen Walmart, Lowes, Target, Kohl’s or Costco calls trafficked major airports. Aloft, Lavy remarks, it’s business as for a meeting, you don’t wait for the next airline usual: Travel time is productive time and never wasted. Wire- Wflight. “You go now,” says Danny Lavy, CEO of Mon- less Internet keeps everyone in constant contact, and he can treal-based Elite Group Inc., one of North America’s largest hold confidential business discussions with ease. distributors of electric home appliances. At a time when companies are cutting costs to remain profit- Ten years ago, Lavy realized that providing his sales and able, Lavy is focused on revenue. He is generating new products product development teams with fast access to big-name U.S. and product lines to appeal to evolving markets. “You have to and international retailers was vital. As a result, Elite Group be very innovative. I think, opportunity-wise, this is actually a took off with fractional shares in Flight Options’ , better time to get out in the market and grow your business. Hawker 800 and Cessna Citation X. Profits and utilization—as With a business aircraft, you look forward to traveling,” he says. much as 500 hours annually—soared. “If you’re not going to go on that trip, you don’t even know what Today, Elite maintains multiple Flight Options shares you’ve lost. Even if it cost me a million dollars a year, you’re talk- accounting for about 200 annual flight hours, but Lavy added ing about one great order that will cover that.” ADVERTISEMENT 10 // THE ENLIGHTENED BUSINESS TRAVELER

Avantair Probably the most unique of the fractional ownership compa- nies is Avantair, which exclusively offers shares in the Piaggio Avanti. The twin-turboprop with the incredibly quiet stand-up cabin is a huge performer. It can attain cruise speeds of 460 mph—faster than many light jets—and it boasts exceptional short-fi eld capability that opens access to hundreds of addi- tional airfi elds. Add to that the ability to climb quickly to 41,000 feet, well above weather and airline traffi c, miserly fuel con- sumption that’s a 40% improvement over that of light jets, plus ample range to fl y halfway across the country, and you have unmatched performance and value. Avantair also offers the industry’s lowest entry costs to busi- ness aviation, making fractional ownership, leasing and time cards practical and affordable. This has caught the attention In an economy where concern over long-term commitment, of a lot of small and midsize businesses. “Usage is up, compa- market risk and fi nancial uncertainty has constrained many nies are fl ying more hours, they are putting more people on the buyers, innovative programs like Avantair’s popular Edge Card airplane, and they are covering more destinations in one day to make it easier and less costly than ever to gain business air- be more effi cient,” says Avantair CEO Steve Santo. craft benefi ts. For a single, all-inclusive payment, the Edge Santo knows a good aircraft is only part of Avantair’s suc- Card provides Avanti airtime in 15-, 25- or 50-hour increments. cess formula. His focus on safety and exemplary service Axis Lease, which can be structured from two to fi ve years, draws high praise from owners, and so does the consistent, takes economy and practicality a step farther. This popular set-priced monthly (or annual) billing plan, which Avantair pio- lease option eliminates the major capital investment, fractional neered. It combines management fees, fl ight-hour costs and ownership flight-hour costs apply, and there is no residual fuel surcharges into one predictable monthly bill. value risk.

FLIGHT LOG

BURKE JONES him: “Avantair affordability, reliability and service allowed me to Business: Independent Real Estate Investor do more business in less time and get to places that I couldn’t go to commercially,” says Jones. Though he considered other aircraft options, at 6 foot 4, Jones found the spacious Piaggio Avanti cabin to be the most appealing. “I considered the speed, comfort and size of the Avanti, and it beat any other light-jet options.” Recently, Burke switched from Avantair fractional owner- ship to Avantair’s Axis Lease. Now he’s gaining all the frac- tional ownership advantages without the large fi nancial com- mitment. “It frees up capital for property investment, and you have exactly the same benefi ts as an owner. I can add hours and I have the fl exibility to go whenever I need to. If the plane is leaving at 3:00, I can leave home at a quarter to, be on the plane, get up in the air and arrive relaxed and on time.” Jones’ business primarily takes him to remote locations of ased in Sun Valley, Idaho, independent real estate inves- Oregon, Washington, California, Nevada and Arizona. “I can tor Burke Jones needed to travel frequently throughout get into smaller airports that many jets can’t and fl y as fast as B the Western states, but with two titanium knees, he a light jet, and the Avanti will use about half the fuel.” He also faced a major speed bump at TSA security checks. Five years emphasizes that travel time is never “lost” time: “I love the fact ago, Jones purchased an Avantair fractional share and imme- that I can spread out all my information and computers on the diately saw his mobility and his investment portfolio take off. large table and that there’s a phone and Wi-Fi on the plane. It This newfound agility opened up a world of opportunity for is absolutely perfect.” ADVERTISEMENT 12 // THE ENLIGHTENED BUSINESS TRAVELER

“We think the HondaJet will define a new category,” says Shaping the Future Fujino, “and I want to call this the ‘Advanced Light Jet.’” Fujino is fulfi lling his promise. The new HondaJet brings a new level of of Business Travel personal mobility to the skies combined with a new standard for Honda, well known for quality engineering, efficiency and performance, comfort and quality. affordability on the roadways, is the latest entry in the tech- nologically advanced, highly effi cient small-jet marketplace. Impeccably timed for takeoff in 2013—as the economy hope- fully begins an upward climb—the all-new small, fuel-effi cient Prepare for Takeoff HondaJet is poised to open the skies to companies and indi- In any period of fi nancial turbulence, opportunities emerge. viduals who previously could only dream of ownership. “It That’s when companies with vision, foresight and agility can will empower small and midsize companies to explore new change their fortunes dramatically for the better. That’s where and existing markets with frequency, economy and ease, and business aviation comes in. enable entrepreneurs and small business owners to be their From industry giants to independent fi rms, companies and indi- own corporate pilots,” says Byron Severson, Honda Aircraft viduals are realizing that the true cost of a business aircraft is in Vice President of Sales. not having one at all. “Clients don’t want to hear that you can’t be there,” says Stuart Piltch, managing director of the Philadelphia, Pa.-based consulting fi rm Cambridge Advisory Group. “A lot of our competitors are larger than we are and have more resources, and to compete effectively we need to outwork, outthink and out- price them.” His business aircraft makes that possible.

Clear Skies Ahead The trends driving the growth of business aviation are unlikely to wane. The need to be highly efficient, to take control of time and to have the ability to travel anywhere at any time is not going away. At the same time, new technologies, new aircraft and new access options are driving down costs while increasing capabilities, reliability and safety. “Companies today are trying to do more with less, and that means making the most productive use of their most precious assets: people Manufactured in Greensboro, N.C., by Honda Aircraft and time,” says President and Chief Executive Offi cer of the Company, the new HondaJet takes an unconventional leap National Business Aviation Association (NBAA) Ed Bolen. forward in aircraft design. By placing the engines on top of The real value of business aviation is in creating opportu- the wings, engineers were able to give this otherwise small nity, generating productivity, building effi ciency and saving jet a generously sized cabin as well as a fully enclosed lava- time. What’s the cost? You can’t calculate that in terms of tory—features that are completely uncharacteristic of this airplane tickets and hotel stays. According to Barry LaBov, aircraft category. President and CEO of Fort Wayne, Ind., marketing com- “Applying lessons from automotive development, HondaJet munications company LaBov & Beyond, “You have to look engineers focused on ergonomic design that would maximize at a business aircraft as an investment for growth: not as a pilot and passenger comfort and functionality, and then built cost-cutting move or an effi ciency measure, but as a growth a unique, incredibly aerodynamic airplane around that,” says opportunity. You are able to utilize your best people with your Michimasa Fujino, Honda Aircraft President and CEO. The light- best clients on a moment’s notice.” weight, all-composite fuselage and newly designed GE Honda When you consider it that way, then the calculation is mean- turbo-fan engines and low-drag airfoil add up to impressive per- ingful. Then the future becomes clear, because the sky is no formance and operating economy 15% to 20% better than that longer the limit. of similar-size business jets, he says. The new jet will be able to fl y nonstop from New York to Miami; reach speeds of 480 mph; For more insight on the benefi ts of business aviation take off from short, 3,200-foot runways; and offer the ability to and to join our online conversation, visit cruise at 43,000 feet, well above weather and traffi c. forbes.com/business-aviation

Written and produced by: Mark Patiky ([email protected]) Principal Photography: Paul Bowen