Many of you may have read our Fall Newsletter published two weeks ago. One of the articles that has been receiving a lot of traction is "5 Acquisition Stragetges in a Slow Economy."
Let me first explain why I decided to write this article. If you look at a recent blog post called "Top 5 Collegiate Aviation Challenges" you will find the top two challenges UAA institutions are facing:
- Transitioning to new equipment
- Program cost management
Both of those issues are addressed in this white paper, so be sure to take notes. This will be a two part series, so stay tuned for part 2 next week!
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We are faced with a multitude of challenges today: budgets are constrained, pending federal regulations may significantly change flight training, and the cost of education is rising. It is important for us to implement strategies to mitigate risk, decrease costs, and flatline budgets.
1. When is the right time to upgrade my fleet?
Avionics technology in airlines and training aircraft is always changing. Most educators will argue it is important that students are exposed to the latest technology. Many successful collegiate flight programs are on a schedule to transition part of their fleet every 7 years with new aircraft for the reason of keeping up with technology.
Clearly, buying new aircraft gives you a tremendous advantage and allows you to take advantage of a manufacturer warranty. However, in today’s circumstances, not all flight programs can afford factory-new technically advanced aircraft. In a slow economy, consider acquiring a fleet of slightly used technically advanced aircraft (no more than 5 years old) at a discount from new aircraft.
This will still allow your program to transition to newer aircraft and teach the most advanced systems and avionics while preserving your operating budget.
2. What is the right number of aircraft to acquire?
There is no “one size fits all” ratio of aircraft to students. However, our data analysis shows that aircraft ratio can range anywhere from:
- 1 aircraft to 13 students
- 1 aircraft to 10 students
Fleet size can also have a direct impact on utilization. The smaller your fleet, the higher utilization per aircraft you can achieve if you can operate efficiently. From our data analysis, most schools strive to reach 600 hours per aircraft annually.
If you would like to download "5 Acquisition Strategies in a Slow Economy" as a PDF click here.