News & Views
Elevate Aviation Group's Keystone Aviation appoints David Allen Vice President of Operations
Miami, FL – November 16, 2022 — Elevate Aviation Group recently named David Allen Vice President of Operations for Keystone Aviation, a leading provider of aircraft charter and management. Mr. Allen will lead operations and build on the success and growth of Keystone Aviation which was acquired by Elevate Aviation Group in January 2022.
Mr. Allen, who has more than 35 years of aviation experience, joined Keystone Aviation in 2018 as Manager of Air Carrier Safety & Quality Assurance, with responsibility for establishing Keystone’s Safety Management System (SMS). Most recently, he was Director of Air Carrier Safety at Keystone Aviation’s Salt Lake City operations.
“David has an extensive and impressive background working with 121 carriers, 135 operations, leading teams in airline hub environments with responsibility for all below-wing operations and aircraft movement,” said Greg Raiff, CEO of Elevate Aviation Group. , “His operational experience and safety focus make him the right person to deliver benefits at scale to our clients without sacrificing safety or the personal touch.”
Prior to joining Keystone, David ran TAC Air’s Airline Services, leading a team serving airline partners for all below-wing operations, charter operations and refueling. Mr. Allen has held various management positions in both operations and customer service at major airlines including Delta, Northwest and US Airways.
“I’m pleased to work with a highly motivated team focused on the long-term success of Keystone Aviation as well as ensuring 100% satisfaction for our customers,” said Allen, who is based in Keystone Aviation’s Salt Lake City headquarters. He holds a Certificate of Management in Aviation Safety (CMAS) from Embry-Riddle Aeronautical University.
Elevate Aviation Group’s Keystone Aviation Appoints Colleen McCauley Vice President of Sales & Owner Services
Miami, FL – November 16, 2022, Elevate Aviation Group’s Keystone Aviation, a leader in aircraft management with a fleet of business aircraft located throughout the US, has named Colleen McCauley to the new position of VP, of Sales & Owner Services.
McCauley joined the group’s Elevate Jet sales unit last year with similar responsibilities. In January 2022, Elevate Aviation Group acquired Keystone Aviation’s aircraft management and charter operations plus Keystone MRO and is now consolidating all sales and owner service activities under McCauley’s leadership.
“Colleen is a stand-out talent with the experience and drive to grow all these business lines and maintain the very highest satisfaction levels among our customers,” said Elevate founder and CEO Greg Raiff. The company manages more than 30 business aircraft with plans to add more. It charters aircraft domestically in the U.S. and around the world. Keystone MRO in Salt Lake City offers major maintenance for multiple brands of turbine business aircraft.
McCauley previously was director of charter sales at an aircraft management company for nearly 10 years, helping grow the fleet from 25 aircraft to over 185 aircraft. Prior to that, she was president and director of flight operations at charter firm Jetworks International for seven years. McCauley brings nearly 30 years of Aircraft Charter & Management experience. She has a bachelor’s degree from San Francisco State University in Environmental Sustainability and Social Justice.
Why You Should Charter Your Jet
It goes without saying that, like home ownership, buying a private jet is a substantial investment. In addition to the initial price tag, the ongoing costs of owning a private jet includes required maintenance and scheduled inspections. Without these, the jet will not retain its airworthiness. These costs do not include other required expenditures like jet fuel, hangar space, staffing, and so forth. However, there is a well-known way to recoup some of the expenses associated with owning an aircraft: chartering your jet through an aircraft management company. Should you decide to take advantage of this revenue source — and there are very few reasons not to — here are some considerations to think about.
The main reason to charter your plane is to offset maintenance and operating expenses. Chartering is a service offered to owners by some management companies, like Keystone Aviation. In addition to managing and maintaining private jets, Keystone is an FAR Part 135 certified air carrier, which means it can charter your aircraft legally and safely, subsidizing a substantial part of your aircraft cost with charter revenue.
While chartering will not likely generate a profit, it offers a great way to provide substantial income toward expenses. How much chartering can financially benefit an owner is variable, based on factors such as the terms worked out with the aircraft management company as well as how often an owner decides to charter his jet. These situational factors aside, chartering can provide a savings of up to 80% of the ownership costs. Savings can be hard to calculate, but a reputable aircraft management company will be transparent about how much chartering a private jet would offset operating costs.
The financial boon to deciding to charter your jet is unmistakable, but there are some minor drawbacks to consider. For instance, owners must relinquish some control over their aircraft because it will not always be available to them. However, they can work with the management company to decide how often they want to make the aircraft available for charter.
Another major benefit to working with a management company like Keystone is that you receive fleet-wide discounts if you need to utilize another aircraft when yours is being chartered. So, not having access to your aircraft does not mean that you are stranded.
The Bottom Line
Deciding to charter one’s private jet is good financial sense with very few downsides. Charter services add a healthy revenue stream to offset operating costs, and the more time an aircraft is made available by an owner, the more lucrative of an option it is.
Owners considering chartering their jet for revenue-generating flights should ask themselves how flexible their flying routine is. Someone who wants to be able to fly at a moment’s notice might be reluctant to choose to charter their jet. But in this case, a good management company can work with clients regarding availability if they choose to charter their jet. Also, for those spur-of-the-moment trips, companies like Keystone that run their own fleets can likely provide a replacement when an owner’s aircraft is being chartered or is grounded for maintenance or other reasons.
Deciding whether or not to charter a private jet is a no-brainer. The question for owners shouldn’t be, is it worth it to charter my jet? Instead, it should be, how can I maximize charter revenue?
Here are a few tips for getting the biggest bang for your buck when chartering your aircraft:
Hire the right advisors. Not all aircraft management companies are created equal. Ask for details on how aggressively the company would market your aircraft to its clients.
Give the management company you’re working with advanced notice of your schedule every month. That way, the company can readily make the aircraft available for charter.
If possible, plan to use your private jet during non-peak periods. Flexibility in your schedule will allow you to make the aircraft available when it is most coveted by charter customers — during peak periods, such as holidays.
How you decide to charter out your private jet is a personal decision as well as a financial one. Working with consultants at an aircraft management company like Keystone can help inform that decision. Reach out to us, and let us figure it out together.
Addressing the Pilot Labor Shortage in Business Aviation
By Aaron Fish
As pandemic restrictions subside, the war in Ukraine intensifies, and the price of oil skyrockets, the worldwide pilot shortage continues to fly under the radar for most people. Those of us in the industry know that the labor crisis has loomed large for the past decade due (in part) to the aging workforce and barriers to entry, such as the prohibitive costs and demands of training. Although the global shutdown offered a temporary reprieve, the ongoing shortage is now a disruptive force across the entire aviation industry, causing some airlines to cut routes and others to reduce their schedules.
Across the business aviation sector, the labor strain is amplified where we’ve seen an unprecedented amount of customer demand driven by a thriving economy and safety concerns. With fewer touchpoints, less time spent in busy travel hubs, and controlled cabins, private aviation is the safest way to fly. Customers don’t have to worry about unknown travelers sitting next to them when flying with colleagues or business partners.
In its most recent Employment Projections, the U.S. Bureau of Labor Statistics projects the need for an average of 14,700 additional pilots each year over the next decade. Forecasts from Boeing and global training provider CAE more than double this figure, the former estimating a need for 612,000 total pilots to maintain the global commercial fleet over the next two decades.
One key aspect to solving the qualified pilot shortage comes down to quality of life
While pilot compensation plays an integral role in retention, the driving force causing pilots to seek out other opportunities in the industry is the perception of better quality of life. Unfortunately, the upfront investment of training and historically low wages have done the industry a disservice. Fortunately, this is changing now, with the shortage driving salaries up exponentially. As United Airlines’ CEO Scott Kirby recently remarked, a career as a pilot has quickly become “one of the most lucrative jobs in aviation.”
Pilots are in the driver’s seat when it comes to industry job offers, but six-figure salaries and signing and retention bonuses can only go so far. Yes, they may make positions more attractive, but what good are financial incentives if work schedules and demands don ’t allow pilots to enjoy them? Case and point: In a 2017 poll conducted by the National Business Aviation Association, pilots ranked compensation, schedule, benefits, and career advancements as the four key factors that motivate them to switch jobs. In a more recent survey of business aviation job seekers, work-life balance ranks ahead of salary (37.97% versus 32.91%), followed by company strength and stability (13.29%) and long-term career potential (13.29%).
It’s imperative to provide a work-life balance that will make qualified pilots and personnel want to stay with your organization. We don’t want to burn pilots out, so leaders must look for ways to create operational synergy between the owners, pilots, and the organization and enable everyone to look out for each other’s best interests. For example, depending on the owner's mission profile and flight activity, adding a third pilot to crews is one way to create a more flexible workplace and build a culture of solidarity. While the higher upfront overhead and operation costs make this a difficult business decision for some, in the long run, investing in greater work-life balance improves retention and morale, which is why we’re already seeing the marketplace make these accommodations.
What does quality of life look like for pilots in business aviation?
Apart from the fundamentals, quality of life can mean something different to each pilot. For some, it means a stable and reliable work routine. For others, especially the younger generation, it means having the opportunity to try and experience new things. It’s no secret that pilots with a preference for the first option typically flock to airlines even though history proves that the commercial sector can be more volatile and are likely to furlough employees during downturns, as confirms a report from the U.S. Government Accountability Office, published before the pandemic.
One of the downsides of choosing to fly with airlines is that pilots don’t have access to the same experiences and opportunities as they do in general aviation. A pilot may fly from Chicago to San Francisco week in and week out with an airline. With on-demand charter, the sky is the limit. Pilots are more likely to fly into cool airports where airlines aren’t permitted to land and travel to different corners and destinations across the country and globe. Private aviation service gives pilots a more diversified experience with exceptional clientele, from professional sports teams to changemakers and across an array of business and political sectors.
Careers in business aviation offer pilots security and excitement. If we can strike the right balance between compensation, and time away from home, general aviation becomes even more attractive and competitive by providing pilots with the quality of life they seek. That means finding creative ways to support pilots’ aspirations both on and off the job. For instance, when employees at Adobe commemorate their five-year anniversary with four weeks of paid leave to take their dream vacation, finally write that novel, or simply relax and recharge. If we compete with compensation alone, pilots will always be lured away by the next best offer. When an organization finds ways to show employees that it respects their quality of life, it earns that respect and loyalty back in spades.
How can we make the next generation excited to fly again?
As we work to improve wages and quality of life, we must also address the barriers that stop young individuals from pursuing pilot careers. A recent survey by Zety asked American adults to recall what they wanted to be when they grew up. “Pilot” did not even land in the top 20. In a similar poll conducted in the U.K., “pilot” also failed to make the top 20, despite “train driver” placing 14th. The pilot career path needs to be on everyone’s radar, from young children to young adults. As an industry, we need to ask ourselves how to fix that.
We must be more proactive in introducing the aviation lifestyle to young adults, demystifying training processes, and making more resources available—from job shadowing opportunities to financial assistance. We need to plan and create an infrastructure that supports sustainable long-term growth for the future. In the end, it comes down to owners and organizations thinking outside the box. How do we break down the barriers for entry, reduce costs, pool resources, and create more flexibility for pilots? These are the questions that we must come together to answer to meet the demands we face today and tomorrow.
The Promise and Shortcomings of Sustainable Aviation Fuel (SAF)
In the 1990s, the automotive industry faced seemingly insurmountable challenges in curbing its carbon footprint. Three decades later, the general public is gravitating toward environmentally-friendly autos more than ever before, a trend certain to continue until vehicles powered by conventional gasoline become a thing of the past. Today, the aviation industry is grappling with similar issues and hopes to reach similar heights, but it has a long way to go. Currently, the sustainability ambitions of the industry largely rest with a commodity commonly referred to as SAF.
What is SAF?
SAF stands for Sustainable Aviation Fuel. In comparison to fossil fuels, SAF in its pure form reduces carbon emissions by up to 80 percent. Unlike finite fossil fuels, SAF is produced using feedstock, which consists of renewable, biological materials, such as cooking oil, plant oils and agricultural residues.
While current international aviation regulations only allow up to 50% of SAF in jet fuel blends, the end product is no different from conventional fuel, experts say. The regulations are due to understandable caution. However, research has shown that jet engines are just as receptive to SAF as they are to conventional fuel. In fact, airlines are rapidly on the way to proving that SAF would be capable of completely replacing conventional fuel if it were more affordable and plentiful. The obstacles related to SAF have much less to do with efficacy than they do with cost and supply.
The challenges regarding the adoption of SAF for the aviation industry are plentiful. But they mainly boil down to two main issues: 1) supply and demand and 2) cost.
Separate from the supply chain issues that have arisen as a result of the pandemic, one of the main barriers to SAF being the answer to aviation’s carbon footprint is availability. Current production is less than 1% of the global jet fuel demand with hopes that that figure will grow to 2% by 2025. Only three major SAF production facilities are currently operating worldwide. Without demand, the goals of SAF advocates appear untenable. However, with appropriate legislation, be it tax penalties or incentives, SAF might still thrive in the aviation industry.
Inextricably connected to SAF supply is the fuel’s cost. The expense of the production process, along with the lack of supply, has caused SAF to be up to five times more expensive than conventional jet fuel, which is why legislation is crucial. For example, a fixed-base operator (FBO) in Los Angeles recently made a 30% SAF blend available to jets, and the cost per gallon is more than a dollar greater than that of conventional jet fuel.
Europe and the United States have different opinions about the best way to encourage the usage of SAF. Whereas European nations are in favor of tax penalties and use requirements, the U.S. favors incentives because tax penalties are unlikely to pass in Congress. With policy roadblocks, it is up to aviation companies to bridge the gap and come up with alternatives to make flying more environmentally friendly until SAF becomes more mainstream.
While SAF is a scientifically proven and highly publicized way for the aviation industry to reduce its carbon footprint, the aforementioned challenges still leave the aviation industry decades away from biofuel making a meaningful environmental difference.
In the short term, alternative solutions are needed. Unfortunately, viable alternatives are wanting. For example, while the auto makers can go electric, this is not an option for aviation because batteries are currently too heavy for flight. Aerodynamic advancements and new technology are other ways the aviation industry can become more sustainable, but such solutions involve a slow, uphill progression, much like the challenges of SAF.
In the meantime, companies that want to make an immediate difference need to consider carbon offsets. For instance, with its carbon neutral flight program, Private Jet Services (PJS) has committed to offset carbon emissions by pledging to plant “79,200 trees in two of the nation’s most needed regions and will reconcile its reforestation program annually to compensate for increased flight activity, ensuring that the PJS Carbon Neutrality Pledge is honored in perpetuity.” This is one way both private and commercial aviation companies can do their part to stem the consequences of carbon emissions.
Sustainability in aviation has a bright future with the promise of SAF. But with the meaningful impact of renewable fuel still decades away, it is up to individual companies to commit to legitimate, attainable efforts until then. It takes a village; every individual can do their part to diminish the effects of climate change. Likewise, aviation companies can make a difference when they decide to lead rather than follow.
Why the Value of Private Jets Are Surging
The current market for pre-owned and new business jets is in the midst of a well publicized crisis. Much like the housing boom that coincided with the pandemic, demand is sky high and inventory is at record lows. For sellers and aircraft manufacturers, this is a good problem to have. However, for buyers, it is a source of frustration. How did the industry find itself here, and when and how does it end?
Similar to why housing prices reached the stratosphere, high demand in aviation is closely tied to the new reality brought on by the pandemic, which left homeowners abandoning cities and commercial airlines virtually grounded. Also, COVID-19 health concerns made flying private appealing because it allowed for the avoidance of crowded airports and packed airplanes. Another factor driving demand is rising wealth that has brought an influx of first-time buyers to the industry. Enticing this new segment of buyers were low interest rates and a 100% bonus depreciation bestowed by the Tax Cuts and Jobs Act of 2017, a reform bill that is in effect until the end of 2022. As the pandemic lifted, corporate customers wishing to build their fleet added to the demand.
Tightening the vise on the market crisis is low inventory, which also has the pandemic partly to blame. 5-6% of the world’s fleet of business aircraft is for sale right now, which is the lowest in decades. While the market is great for sellers, many do not want to part with their aircraft because of the difficulty in finding a replacement, not to mention the desire to travel more safely by avoiding commercial airlines. Meanwhile, on top of global shipping delays, the production of new aircraft and parts stalled during the height of the pandemic, resulting in a shortage of newer-model jets that drove up the demand and, consequently, the prices of pre-owned aircraft.
Though it is too early to tell, the sanctions placed on Russia in response to the Ukrainian invasion could also squeeze inventory. The sales of Russian-owned aircraft and even those with unorthodox ownership structures are bound to be rife with complications and scrutiny, and that assumes that the sanctions do not render certain types of sales completely off limits.
The idea that prices will fall as the pandemic fog lifts and people return to flying commercially is possible. But as Greg Raiff, CEO of PJS, wrote in a recent LinkedIn article related to business travel, “Factor in the convenience of flying according to your schedule, the privacy to conduct business on board, and the ability to reduce travel time and expenses, and airline travel no longer adds up … For the first time, it’s more cost-efficient to fly a group of mid-level managers on a private aircraft than it is to send them on a commercial flight.”
For the foreseeable future, buyers will continue to scramble to close on aircraft they covet. The frenzy has caused buyers to make decisions that range from necessary, such as paying upfront with cash, to irrational, like foregoing a pre-purchase inspection to close on an aircraft. Aircraft acquisition experts urge buyers to be sensible despite being in a disadvantaged position. Using brokerages, such as Keystone Aviation, can help buyers with paperwork and the inspection processes, so that they can more easily navigate this market crisis and move quickly enough to snap up the unique aircraft that meets their needs.