Every industry has been affected by the COVID-19 pandemic. We know that operational priorities are shifting, and operators need to make strategic decisions on where to allocate resources. While it can be tough to focus on the future amidst so much uncertainty, reducing your fixed costs is paramount. Here are four things operators can do to realize immediate savings, freeing up more capital.
REVIEW & OPTIMIZE INSURANCE POLICIES
Insurance premiums are going up, putting operators in a tough position. It’s more important than ever to benchmark your current coverage and premiums and to plan for the future, even if your policy isn’t up for renewal until later in the year. AVIAA helps our members offset insurance costs by combining fleet savings across our supplier network and utilizing unique financing techniques. We also have in-house experts to review our members’ current policies and provide comprehensive diagnostics.
CAPITALIZE ON TRAINING DEALS & AVAILABILITY
With the current restrictions, we’re seeing lots of training cancellations. This is naturally going to lead to a surge in training events compressed into a couple of months once those restrictions are lifted. That surge will more than likely exceed the current capacity of training centers, leaving lots of pilots out of currency with no options. It’s crucial to book training now and to consider online and more niche training providers, who will have more flexibility with scheduling and competitive rates compared to larger providers.
MOVE TO RECLAIM LOST TAX MONEY
VAT and Mineral Oil Tax can amount to 43% of your total fueling costs and under certain circumstances these taxes and excise duties are fully recoverable. You can reclaim tax and excise duties charged on fuel purchases, as well as VAT incurred through ground handling, navigation, and crew travel expenses. Put cash back into your pocket now by making sure you reclaim any VAT incurred on your recent trips.
RETHINK YOUR METRO STRATEGY
Most operators fly to the same popular airports. However, passengers fly to cities, not airports, and alternate ICAOs can provide savings in almost every major metro area. While fuel and handling are variable costs, and it’s not always feasible to fly into a different ICAO, cheaper trip costs offer thrifty owners and clients a win while enabling you to increase your addressable market (with lower cost flights). At AVIAA we recently published a study comparing fuel pricing across ICAOs in 25 major metropolitan areas. To request a complimentary copy of the study, please click here.
Not only will these steps help you free up needed capital in the short term, they’re best practices that will put you on solid footing coming out of recent events. At AVIAA, we will continue working on ways to help our members and supply partners operate more efficiently and cost-effectively, and support our larger general aviation community.
We’re in this together.