the best-kept secret of successful companies

SPECIAL ADVERTISING SECTION // BUSINESS AVIATION
THE BEST-KEPT SECRET OF
SUCCESSFUL COMPANIES
Despite a vacillating U.S. economy, the need for a company
plane appears to be stronger than ever. What’s driving it?
“When business in general takes a downturn, that’s the time
when you’ve got to get out and see people more frequently.
We’re doing that, we’re growing, and our business aircraft are
a big part of that,” says Edmund O. Schweitzer III, President of
Pullman, Wash.-based Schweitzer Engineering Laboratories.
WRITTEN AND PRODUCED
BY MARK PATIKY
With necessary cost cutting, slim management ranks and
a lot more territory to cover, time is the currency of the new
economy. This has not gone unnoticed by the more than
15,000 companies, entrepreneurs and individuals in the
U.S.—mostly small and midsize fi rms—that operate more
than 23,000 business aircraft. These aircraft are essential
tools in today’s global economy.
FLIGHT LOGS // REAL-LIFE BUSINESS AVIATION SUCCESS STORIES
DR. TIRON
PECHET
MIKE
LEEDS
KURT
CROSBY
DANNY
LAVY
BURKE
JONES
Radiologist
Former CEO,
CMP Media
CEO, Crosby
Tugs LLC
CEO, Elite
Group Inc.
Independent
Real Estate
Investor
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ADVERTISEMENT 2 // THE ENLIGHTENED BUSINESS TRAVELER
Your How-To Guide to
a New World of Travel
The Enlightened Business Traveler is your boarding pass to this
new world of travel. It examines business aircraft types, details
the diverse access options, and illustrates how businesses and
entrepreneurs with varied travel requirements are strategically
employing business aircraft to meet existing challenges and create new opportunities. But, most important, it discusses the ease
with which you too can literally create time in your busy schedule.
Time Flies—Shouldn’t You?
Far from being the excessive indulgence mass media makes
them out to be, business jets help a growing number of today’s
savvy business leaders build strong bonds with customers and
clients. “Our planes are critical to our growth,” reports Danny
Lavy, President of Montreal-based Elite Group Inc.
“In this age of technology, a lot of people take personal relationships for granted. I think they’re making a big mistake,” says
Arthur Allen, President of Naples, Fl.-based ASG Software Solutions. “Our airplane allows us to bring our people together with
clients, conduct real business and resolve issues face-to-face. It
is an unbelievably efficient use of our time,” he says. “You have
to be out there with your customers and find out what’s really
going on; it’s amazing what that really does.”
In addition to those that own their own airplanes, another
8,000 or more have chosen fractional ownership and prepaid
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 executives: 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 fleet more flexible,
affordable and capable than ever.
Moving at the Speed of Business
Business aircraft enable busy executives to visit multiple cities 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
certainly won’t get there easily via airlines, which serve barely
10% of these non-hub locations.
It’s not only busy schedules that are driving the growth of
business aviation—it’s bottom-line results. A study of the S&P
500 companies by Virginia-based consulting firm NEXA Advisors LLC found that over a five-year period, companies that
used business aircraft had twice the total shareholder return
of companies that did not.
“You have the freedom to operate on your own schedule,”
says Lars Thrane, founder of Denmark-based global satellite
communications company Thrane & Thrane. “That’s a necessary part of our business. That efficiency and flexibility is an
essential factor in our success.” In addition, Thrane points out,
today’s business aircraft are often better equipped than many
offices, featuring phone, fax, TV and wireless Internet. So you
don’t just get there faster, you get there ready.
The best part is you don’t even have to own an aircraft to gain
all the valuable benefits. 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
fleet more flexible, affordable and capable than ever.
“Our airplane allows us to bring our people
together with clients, conduct real business and
resolve issues face-to-face. It is an unbelievably
efficient use of our time.”
—Arthur Allen, President, ASG
THE ENLIGHTENED BUSINESS TRAVELER // ADVERTISEMENT 3
The Ultimate
Productivity Tool
Companies around the globe with their own business aircraf t 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 operate it in-house, others outsource the operational responsibilities to management firms 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
idle, the management company can charter it. That’s been a
bonus for Mike Leeds, the former CEO of CMP Media, who
owns a Falcon 50. With limited flight requirements, he offers
his jet for charter when he’s not using it. The charter revenue
offsets some of the fixed ownership cost.
“Companies today are trying to do more with
less, and that means making the most
productive use of their most precious assets:
people and time.”
—Ed Bolen, President and CEO, NBAA
FLIGHT LOG
DR. TIRON PECHET
Business: Radiologist
I n addition to being a formidable business tool, Embraer’s
Phenom 100 is also an affordable and effective choice for
those who, like Boston-based radiologist Dr. Tiron Pechet
and his two partners, own and fly the small jet. All three have
equally hectic work lives, and, like many whose work infringes
on quality personal time, an airplane is just the ticket. “It is a
great way to get around and take full advantage of precious and
often-fleeting opportunities to be with my family,” says Pechet.
For Pechet, using the jet for a weekend away with his wife
and two young boys means he gains two or three days of
enjoyment without losing half of it to commercial travel schedules or tiresome road trips. “We can drive an hour away from
Boston and not even reach Cape Cod, or we can take a onehour flight 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 flying jets for several years, but he was
drawn to the Phenom 100 because of its level of sophistication, 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 Brazil. “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.
The Phenom has been an all-around winner for Pechet: “It is
by far the most economical jet in this category, and it is 15%
to 20% less expensive to operate than the turboprop we previously owned.” Pechet is also delighted with the Embraer Executive Care and Pratt-Whitney Engine Plan, through which—as
with a bumper-to-bumper warranty—maintenance becomes
a predictable budget item. There are no surprises, he points
out. If the Phenom works this well for an individual, imagine
what it can do for a company. “From a business perspective
it’s efficiency, affordability and practicality combined,” he says.
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FLIGHT LOG
MIKE LEEDS
Business: Former CEO of CMP Media
M
ike Leeds took over his family’s small publishing business in 1988, boosted sales by a factor of five, doubled
the number of employees, and took the company—
which evolved into the publishing giant CMP Media—public,
and sold it for $940 million. Much of that growth and success,
Fractional Ownership
and Jet Cards
Fractional ownership has enabled thousands of companies and
individuals—many of whom never imagined it possible—to gain
all the benefits of a business aircraft plus many unique advantages whole aircraft owners don’t have. The idea is simple: Why
buy an entire aircraft when you need one only part of the time?
For a fraction of the whole aircraft price, buyers gain full
business aircraft advantages. Every management and operational detail is taken care of. Your plane is guaranteed, ready
when you are, anywhere across the nation.
In addition to the capital investment, owners pay a monthly
management fee plus a fixed per-flight-hour charge, but only
for the time spent aboard. Unlike charter, fractional ownership
does not incur any repositioning or return flight charges. Owners also gain access to an entire fleet, with the freedom to
substitute a larger or smaller aircraft depending on specific
trip requirements.
says Leeds, had to do with the ability to meet frequently with
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 meetings because we had the seats, and we could get them back
very quickly. It was efficient and effective. The key is time savings, productivity and the actual business opportunities that
are created as a result of going,” he explains.
When he was planning the IPO, his business jet 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 aerodynamics, the Falcon 50 is unique because of its ability to
land or depart from challenging airports while maintaining
demanding safety margins. “We can operate without compromise at high-altitude airports like Vail or Eagle Creek, Colo.,
or from small local airport runways like the one in Princeton,
N.J., that even smaller jets can’t negotiate.” For Leeds, it’s the
perfect charter aircraft.
Jet Cards, typically sold in 25-hour increments, make fractional ownership benefits even easier to acquire. There is no
major investment or asset-value concern. Buyers prepay for
usage based on fixed hourly rates and, unlike with charter,
there are no positioning or empty return-leg costs. When hours
expire, you simply walk away without further obligation.
NetJets
More than a quarter century ago, Berkshire Hathaway’s
NetJets® Inc. pioneered the idea of fractional ownership. It
remains the global leader, with 7,500 fractional and jet card
owners that fly to more than 170 countries annually. It also has
the largest and most diversified business aircraft fleet, with
more than 700 aircraft worldwide comprising 13 aircraft types.
NetJets also offers the broadest range of business aircraft
services, from fractional ownership to the 25-hour Marquis
Jet Card to charter and wholly owned aircraft management
through its subsidiary, Executive Jet Management.
In addition, NetJets, which is the only provider with operations in Europe, recently announced plans for NetJets China.
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Owners in any global area gain flight privileges in any other;
so, for example, a U.S. owner could fly commercially to Hong
Kong or Beijing and pick up his NetJets aircraft, or he could
fly direct from any U.S. city in one of NetJets’ large-cabin
intercontinental-range jets.
While the economy remains in a multiyear holding pattern,
NetJets owners are on the move, reports NetJets North America Sales, Marketing and Services President Adam Johnson.
Sales are growing, flight hours are increasing and global travel
is on a sharp rise, he notes.
To accommodate strong demand for large-cabin, long-range
aircraft on international routes—particularly to and from China—
NetJets recently purchased 50 ultra-long-range Bombardier
Global 5000, 6000, 7000 and 8000 aircraft, the first of which will
be delivered this year. The Bombardier Global aircraft, capable
of nonstop flights between New York and China or Indonesia,
underscores the intense focus on Asian business relationships.
The Bombardier purchase follows an earlier order for 50
Embraer Phenom 300 Platinum Edition aircraft, which will
begin entering the NetJets fleet in April 2013. Like the Bombardier jets, the Phenom 300s will have interiors custom designed
exclusively for NetJets owners. “The small-cabin jet looks
and feels like a much larger one,” says Johnson. “It offers
exceptional speed, range, reliability and economy unmatched
in its class.”
“Having a plane when and where we need it
has definitely paid off. It’s convenience,
safety and peace of mind knowing we can
respond effectively.”
—Kurt Crosby, CEO, Crosby Tugs LLC
NetJets is forecasting clear skies ahead for business aviation. The company recently signed yet another deal worth $9.6
billion—the largest in private aviation history—for 275 Bombardier Challenger 300 and 605 aircraft and 150 of Cessna’s
newest midsize jet, the Latitude.
FLIGHT LOG
KURT CROSBY
Business: Crosby Tugs LLC
Y ou might not expect a company operating a fleet of lumbering tugboats and barges to need Mach speed, but
Kurt Crosby, CEO of Crosby Tugs LLC, would beg to
differ. “This is a very competitive business, and we definitely
have to react quickly,” says Crosby, who never knows if his
next opportunity will be around the corner or across an ocean.
Of course, when you’re headquartered in a place like Galliano, La., time is not always on your side. The nearest commercial flight from New Orleans demands an onerous drive and
nearly a half day is lost before the wheels have even left the
runway. So when those deep-sea drilling rigs need to move,
Crosby can’t afford to wait for an airline flight.
With the local airport just ten minutes away, however, Crosby
and his team—key managers from several departments who
collectively fly 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 flew with NetJets exclusively, but as his
travel demands increased, his company purchased its own
midsize business jet, which flies 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 supplement. Crosby likes the flexibility: “Instead of just one type of
jet, we have a fleet to choose from depending on where we’re
going and how many are flying. That is a big advantage to us,”
says Crosby.
Although many small business owners think business jet
access is beyond their budget, Crosby is quick to point out
that dollar amounts do not tell the whole story. It’s not about
the cost of travel, it’s about the cost of doing business, he
explains, and the ability to be there for his clients when it
counts is priceless. “Having a plane when and where we need
it has definitely paid off. It’s convenience, safety and peace of
mind knowing we can respond effectively,” he says. “We can
take care of business and serve our customers better. We’ve
grown tremendously as a result.”
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Flight Options
Well known for its innovative fractional ownership offerings,
Flight Options is creating new opportunities that give customers a whole lot more for a whole lot less, says President
Mike Silvestro. Whether it’s a large-cabin, 13-passenger jet
like the Embraer Legacy 600, which comes with the price
tag of a midsize jet; or the small-cabin, best-in-class performer like the Embraer Phenom 300 with unparalleled speed,
performance and range; or a totally remanufactured Nextant
400, Silvestro is standing by the company’s core principle of
providing added value.
For example, Flight Options’ older Hawker 400s are being
replaced with the completely manufactured Nextant 400XT,
which features a 30% lower operating cost, a thousand-mile
range increase, latest-technology digital cockpit, all-new interiors and new fuel-efficient Williams engines. In addition, the
ever-popular Flight Options Citation Xs are undergoing a total
makeover inside and out featuring winglets for greater fuel
economy and improved performance at a lower cost.
It was Flight Options’ alluring combination of products
and programs that ultimately led to a 53% increase in new
fractional owners during 2011 over the previous year. The
company scored again with Jet Club Membership for the
Phenom 300.
This latest program combines jet card benefits with perhour pricing that rivals fractional ownership rates. Similar to a
prepaid lease, Jet Club Membership eliminates major capital
investment and asset-value risk. After a one-time fee, members can purchase up to three 25- or 50-hour time blocks over
36 months. Growth in the Phenom 300 membership program
has been exponential.
For those with more modest flight-time needs, Flight Options
also offers 25-hour JetPASS Jet Cards for the Hawker 400XP,
Hawker 800 XP, Citation X and Legacy 600.
“You have to be very innovative. I think,
opportunity-wise, this is actually a better time to
get out in the market and grow your business.”
— Danny Lavy, CEO, Elite Group Inc.
Flight Log
Danny Lavy
Business: Elite Group Inc.
W
hen Walmart, Lowes, Target, Kohl’s or Costco calls
for a meeting, you don’t wait for the next airline
flight. “You go now,” says Danny Lavy, CEO of Montreal-based Elite Group Inc., one of North America’s largest
distributors of electric home appliances.
Ten years ago, Lavy realized that providing his sales and
product development teams with fast access to big-name U.S.
and international retailers was vital. As a result, Elite Group
took off with fractional shares in Flight Options’ Hawker 400,
Hawker 800 and Cessna Citation X. Profits and utilization—as
much as 500 hours annually—soared.
Today, Elite maintains multiple Flight Options shares
accounting for about 200 annual flight hours, but Lavy added
a wholly owned Dassault Falcon 2000LX, which flies more than
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 anywhere. “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 distances and negotiate shorter runways was a huge advantage,
enabling him to use smaller, local airfields versus the heavily
trafficked major airports. Aloft, Lavy remarks, it’s business as
usual: Travel time is productive time and never wasted. Wireless Internet keeps everyone in constant contact, and he can
hold confidential business discussions with ease.
At a time when companies are cutting costs to remain profitable, Lavy is focused on revenue. He is generating new products
and product lines to appeal to evolving markets. “You have to
be very innovative. I think, opportunity-wise, this is actually a
better time to get out in the market and grow your business.
With a business aircraft, you look forward to traveling,” he says.
“If you’re not going to go on that trip, you don’t even know what
you’ve lost. Even if it cost me a million dollars a year, you’re talking about one great order that will cover that.”
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Avantair
Probably the most unique of the fractional ownership companies 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-field capability that opens access to hundreds of additional airfields. Add to that the ability to climb quickly to 41,000
feet, well above weather and airline traffic, miserly fuel consumption that’s a 40% improvement over that of light jets, plus
ample range to fly halfway across the country, and you have
unmatched performance and value.
Avantair also offers the industry’s lowest entry costs to business aviation, making fractional ownership, leasing and time
cards practical and affordable. This has caught the attention
of a lot of small and midsize businesses. “Usage is up, companies are flying more hours, they are putting more people on the
airplane, and they are covering more destinations in one day to
be more efficient,” says Avantair CEO Steve Santo.
Santo knows a good aircraft is only part of Avantair’s success formula. His focus on safety and exemplary service
draws high praise from owners, and so does the consistent,
set-priced monthly (or annual) billing plan, which Avantair pioneered. It combines management fees, flight-hour costs and
fuel surcharges into one predictable monthly bill.
In an economy where concern over long-term commitment,
market risk and financial uncertainty has constrained many
buyers, innovative programs like Avantair’s popular Edge Card
make it easier and less costly than ever to gain business aircraft benefits. For a single, all-inclusive payment, the Edge
Card provides Avanti airtime in 15-, 25- or 50-hour increments.
Axis Lease, which can be structured from two to five years,
takes economy and practicality a step farther. This popular
lease option eliminates the major capital investment, fractional
ownership flight-hour costs apply, and there is no residual
value risk.
FLIGHT LOG
BURKE JONES
Business: Independent Real Estate Investor
B
ased in Sun Valley, Idaho, independent real estate investor Burke Jones needed to travel frequently throughout
the Western states, but with two titanium knees, he
faced a major speed bump at TSA security checks. Five years
ago, Jones purchased an Avantair fractional share and immediately saw his mobility and his investment portfolio take off.
This newfound agility opened up a world of opportunity for
him: “Avantair affordability, reliability and service allowed me to
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 ownership to Avantair’s Axis Lease. Now he’s gaining all the fractional ownership advantages without the large financial commitment. “It frees up capital for property investment, and you
have exactly the same benefits as an owner. I can add hours
and I have the flexibility 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
Oregon, Washington, California, Nevada and Arizona. “I can
get into smaller airports that many jets can’t and fly as fast as
a light jet, and the Avanti will use about half the fuel.” He also
emphasizes that travel time is never “lost” time: “I love the fact
that I can spread out all my information and computers on the
large table and that there’s a phone and Wi-Fi on the plane. It
is absolutely perfect.”
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Shaping the Future
of Business Travel
Honda, well known for quality engineering, efficiency and
affordability on the roadways, is the latest entry in the technologically advanced, highly efficient small-jet marketplace.
Impeccably timed for takeoff in 2013—as the economy hopefully begins an upward climb—the all-new small, fuel-efficient
HondaJet is poised to open the skies to companies and individuals who previously could only dream of ownership. “It
will empower small and midsize companies to explore new
and existing markets with frequency, economy and ease, and
enable entrepreneurs and small business owners to be their
own corporate pilots,” says Byron Severson, Honda Aircraft
Vice President of Sales.
“We think the HondaJet will define a new category,” says
Fujino, “and I want to call this the ‘Advanced Light Jet.’” Fujino
is fulfilling his promise. The new HondaJet brings a new level of
personal mobility to the skies combined with a new standard for
performance, comfort and quality.
Prepare for Takeoff
In any period of financial turbulence, opportunities emerge.
That’s when companies with vision, foresight and agility can
change their fortunes dramatically for the better. That’s where
business aviation comes in.
From industry giants to independent firms, companies and individuals are realizing that the true cost of a business aircraft is in
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 firm 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 outprice them.” His business aircraft makes that possible.
Clear Skies Ahead
Manufactured in Greensboro, N.C., by Honda Aircraft
Company, the new HondaJet takes an unconventional leap
forward in aircraft design. By placing the engines on top of
the wings, engineers were able to give this otherwise small
jet a generously sized cabin as well as a fully enclosed lavatory—features that are completely uncharacteristic of this
aircraft category.
“Applying lessons from automotive development, HondaJet
engineers focused on ergonomic design that would maximize
pilot and passenger comfort and functionality, and then built
a unique, incredibly aerodynamic airplane around that,” says
Michimasa Fujino, Honda Aircraft President and CEO. The lightweight, all-composite fuselage and newly designed GE Honda
turbo-fan engines and low-drag airfoil add up to impressive performance and operating economy 15% to 20% better than that
of similar-size business jets, he says. The new jet will be able to
fly nonstop from New York to Miami; reach speeds of 480 mph;
take off from short, 3,200-foot runways; and offer the ability to
cruise at 43,000 feet, well above weather and traffic.
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
and time,” says President and Chief Executive Officer of the
National Business Aviation Association (NBAA) Ed Bolen.
The real value of business aviation is in creating opportunity, generating productivity, building efficiency and saving
time. What’s the cost? You can’t calculate that in terms of
airplane tickets and hotel stays. According to Barry LaBov,
President and CEO of Fort Wayne, Ind., marketing communications company LaBov & Beyond, “You have to look
at a business aircraft as an investment for growth: not as a
cost-cutting move or an efficiency measure, but as a growth
opportunity. You are able to utilize your best people with your
best clients on a moment’s notice.”
When you consider it that way, then the calculation is meaningful. Then the future becomes clear, because the sky is no
longer the limit.
For more insight on the benefits of business aviation
and to join our online conversation, visit
forbes.com/business-aviation
Written and produced by: Mark Patiky ([email protected])
Principal Photography: Paul Bowen