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Chartering Business Aircraft Gives LaBov a Tool for Talent

Fort Wayne, Indiana is a great place to live, but traveling anywhere from Fort Wayne can be problematic. That was Barry LaBov’s dilemma when he opened the doors of his small marketing
communications firm, LaBov Advertising, Marketing and Training, in 1980.

Plane Advantage 3aChartering business aircraft resolved LaBov’s dilemma. “We were very ambitious, and we decided to specialize in sales and marketing communications training for companies with large manufacturing, distributor or dealer networks across the nation,” LaBov recounts. Most, including Harley-Davidson in Milwaukee, BMW and Ferrari in the New York area and UPS in Atlanta, were based in major metropolitan areas.

“Every flight to New York or Los Angeles, for example, was going to be at least two legs so we would have to set aside maybe six to seven hours for travel,” explains LaBov. “It immediately became clear that limited commercial airline service would present significant travel challenges. Flight cancellations or delays endangered our connections and appointments with clients.” That lack of accessibility put his company at a huge disadvantage over big-city competitors.

LaBov decided that chartering a business aircraft would enable the company to be more frequently and easily available. However, chartering ultimately lacked the consistency that he wanted. Pricing and quality varied from day to day and place to place, and his plane of choice wasn’t always available when needed.

“The thing that we like is that even though we don’t own those planes, the quality, consistency, reliability and safety is extraordinarily high.”

To gain more control, LaBov purchased a new, small-cabin Cessna Citation CJ1, which the company operated for seven years. At the time, fractional ownership was in its infancy and jet cards were just emerging, so full ownership was the best option. As the economy slumped, some clients went out of business and his aircraft use dipped to about 150 hours annually, increasing his per-flight-hour costs considerably. Four years ago, LaBov sold his jet and began using Sentient and Flight Options jet cards. “The thing that we like is that even though we don’t own those planes, the quality, consistency, reliability and safety is extraordinarily high,” LaBov says. He retained all of the business aircraft benefits that he had—in fact, gained some—while eliminating the fixed ownership costs such as maintenance, hangarage, insurance and pilot salaries, which accrue whether the plane flies or not. Equally important, he eliminated the market risk associated with owning any asset.

Although jet cards, which operate like pre-paid debit cards, typically cost more per flight hour than owning or chartering, they have some distinct advantages. LaBov pays upfront for exactly what he needs at an agreed per-flight-hour-rate. The hourly rate is the same whether he flies to or from Warren, Pennsylvania; Johnson City, Tennessee or Fort Wayne, and availability is guaranteed. In addition, unlike charter or ownership, he pays only for time aboard so he can arrive in Morristown, New Jersey, visit clients, drive to another meeting and call for his plane in
Bridgeport, Connecticut without incurring repositioning costs. In fact, he could easily change plans, return the next day or three days later, and the cost would remain the same. Perhaps best
of all, when all card hours are used, he can opt for a new one or walk away without obligation; there is no asset to sell or capital gain or loss to consider.

LaBov determined that although the jet card per-hour cost was higher, his overall annual outlay dropped considerably because he eliminated the administrative burden of running an internal flight operation. On the other hand, he gained complete cost predictability and quality, as well as flexibility to easily ramp up or ramp down usage as business conditions change. Whether with charter, outright ownership or jet cards, business aircraft access put an entirely new perspective on LaBov’s business. “It allows us to meet not just one but several clients in a day. We can fly to New Jersey, with large presentation materials and equipment, drop off half the team, three others can continue to Boston to meet with another client, and we can all fly home that night, be with our families and be fresh and ready to go the next morning.

A typical short trip to meet with a client in Toledo, Ohio, takes under an hour door-to-door. That’s faster than driving across the city at rush hour. Including connections, the equivalent commercial flight will eat up five hours of the workday day. Plus, LaBov can send five people to meet with a client and make great use of their time instead of flying one or two commercially and taking three days to do it. “Having a business aircraft available changed the way we do business, and it gave us a chance to grow faster,” LaBov says. “We went from a small-town, Midwest agency to a national contender, because we showed the wherewithal and the resources to be there and not spare convenience or expense to connect face-to-face with the client.”

LaBov, who employs about 30 people, considers numerous intangibles that don’t fit on a spreadsheet as key factors in the business jet value equation. “The use of a business aircraft must focus around people and opportunities,” LaBov points out. Making travel more comfortable and less time-consuming for his team members helps make the company a more desirable place to work, he says. “If we had to make every trip commercially, we would lose some very talented people, and we wouldn’t travel as frequently. However you gain the benefits, you have to look at a business aircraft as an investment for growth. If you are an aggressive, confident and growing company, a business jet is an essential tool. It certainly has been integral to our success. We have uncompromised freedom to travel and we control our own destiny.”

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About Mark Patiky

Mark Patiky
Mark Patiky’s aviation background spans four decades including writing and editing for more than a dozen international and U.S. aviation publications as well as Fortune, Forbes, ForbesBusinessAviation.com and Business Aviation Voice on Forbes.com. He has written a book on investing in Star Wars technology and currently owns and flies his own airplane, which he uses extensively for business.