Gaining New Ground

In the face of an increasingly complex retail real estate investment environment, and a world where constantly evolving technology enables us to be connected 24/7 with both current and potential partners, as well as have access to real-time market and property data and analytics at our fingertips, retailers and commercial real estate professionals are being increasingly challenged to be more nimble, flexible and connected than ever before — and to find new ways to maximize efficiency and productivity in the non-stop deal-making environment.



With the market continuing to heat up, retail real estate pros know there is little time to spare when researching, forming and managing deals. Significant competition in primary markets is pressing investors to be quicker and more aggressive in those regions, and is driving many investors to look more closely at secondary and tertiary markets for new cost-effective opportunities. With lower barriers to entry, and potential higher returns due to rising population and traffic rates in previously slower regions, secondary and tertiary markets are becoming a more attractive investment. And while technology, including videoconferencing, databases and websites, allows us to get a virtual understanding of potential and existing locations anywhere in the world, at the end of the day, nothing replaces an in-person walk-through of properties or a face-to-face meeting with potential partners.



One tool that many retail real estate leaders have already, or are increasingly turning to, in order to maximize efficiency and productivity in this climate is business aviation. An alternative to standard travel on commercial airliners, with rigid schedules and relatively limited destinations, business aviation is increasingly being used as a means to enhance company productivity and output, and as a way to attract and retain top talent. Because of new technology capabilities with on-board high-speed Internet, “Text and Talk” features and sound systems and monitors, business aviation utilizes these advancements to increase users’ productivity and connectivity.



What follows is an overview of the business advantages of adopting a business aviation program, what considerations you need to make when determining what type, if any, program makes sense for your company, and key questions to ask when vetting potential partners to ensure you select the right program.



Soaring to new heights



While there is no doubt that business aviation is a significant investment, the benefits can be game-changing regardless of company size. According to the National Business Aviation Association (NBAA), 97% of companies that utilize business aviation are small to mid-size businesses, and another NBAA study found that companies using business aircraft generated more income, reduced recession impact and achieved better customer success.



One of the most critical benefits for the retail real estate industry is the ability to hit multiple locations in one day, and to get closer to your final destinations than commercial airliners allow. Whereas the major public airlines reach around 500 airports, private aircraft have the ability to fly into nearly 3,000 North American communities non-stop. With the increasing popularity of secondary and tertiary markets, this can be a huge difference maker — rather than flying in to a location, driving another hour or two to reach your destination, then turning back around and flying out again—that is, if the commercial airlines have a flight that night; if not, add hotel time and costs to the assessment — business aircraft can get you closer to your destination much more quickly and back out on your schedule.



Another key advantage is the ability to dictate the schedule — you can often fly in as little as a few hours’ notice, you can set the flight times for when is most convenient for you and your team, and you can arrive at the airport minutes before your departure time, saving an immense amount of time.



Going the distance — Selecting the right program



When contemplating whether or not to form or secure a business aviation program, it is important to know the options. There are a plethora of programs available that can often be customized to fit your company’s specific needs. Key considerations to make when researching and deciding what options to pursue include center, of course, on your company’s specific situation and needs — How many hours, on average, do your employees fly each month? Each year? What locations are they flying to most frequently? How many people, on average, will need to be accommodated? Keeping this information top of mind will help determine which of the four most common categories will be the best fit:



Fractional aircraft ownership



Fractional aircraft ownership is one of the most cost-effective and efficient programs for companies who are flying their team on a fairly regularly basis (50-200 hours per year on average), but not regularly enough to warrant purchasing an entire aircraft. Fractional aircraft ownership is like a timeshare for a plane — you purchase or lease a portion of a specific aircraft that is proportionate to the amount of time you will need it per year — whether it is one eighth, one quarter or one half of the year. Fractional programs grant you a higher level of flexibility and control, and thus make sense for companies flying to multiple locations in a day, those who fly on peak or typically restricted travel days, or those who often need to fly on short notice. Fractional ownership comes with a guaranteed level of safety and service as well.



Charter service



For companies with unpredictable schedules who travel only occasionally throughout the year, or who do not often need to fly groups of people at once, charter services that allow you to rent from a wide range of aircraft types on an as needed basis can get a strong fit. One of the characteristics of this program that separates it from fractional ownership is that you will often never fly in the same jet — charter services often operate as brokers, so the type of aircraft may ultimately be based on the availability and the owner’s schedule.



Jet cards



For those flying less than 50 hours per year, but who fly frequently enough that commercial travel can be cumbersome or not effective, pre-paid private jet cards are a favorable alternative. Jet card programs allow you access to private aircraft without the long-term commitment that comes with more robust programs. Many of these programs operate simply as charter brokers. However, the jet card provider will, in most cases, vet the charter aircraft provider for you. A benefit over charter flights on your own.



Whole craft ownership



For companies who travel more than 250 hours per year and spending a substantial amount of time arranging this travel, whole craft ownership — the purchasing and management of an aircraft for your company — is an option to consider. While it comes at a much higher price point, this option offers unparalleled flexibility and customization, and enables complete control. If your company is not equipped to develop and manage a program internally, and you most likely are not, there are many business aviation companies out there that can build and manage this program for you.



Vetting potential partners



Once you have determined what your company’s general need and budget is, the next step is to identify and secure a partner t