The Fibonacci Sequence and Business Aviation!
You do not have to be Neil deGrasse Tyson to understand the Paradox that is business aviation.
The real absurdity of business aviation is not the fact that it does not work, but the lack of connection between innovation, knowledge, and execution.
The Fibonacci theory is considered nature’s code, and to demonstrate the Fibonacci sequence he used rabbits as an example. 0,1,1,2,3,5,8,13 etc. Simple but brilliant and it works in all of nature.
Therefore, when we apply Fibonacci’s simple lucidity to business aviation it should grow without disappointment, be profitable, and remarkably successful. But (metaphorically speaking) when you start out in business aviation with the equivalent of two rabbits, but of the same sex it will never work. It cannot work or expand. You no longer have a golden ratio or circle, but an actual money pit.
This is where business aviation generally gets it wrong. Metaphorically speaking (again), the self-styled leaders that dominate business aviation apparently never understood that two rabbits of the same sex cannot breed but will most definitely create a money pit!
Revenue business aviation has never understood the problem, with few exceptions, especially if actual profitability was the aspiration! Oh sure! There is a river of cash flow to keep the claptrap working, but minimal actual revenues to brag about.
There are also tons of bunkum excuses to use business aviation as a write off, but factually, write offs are not actually profits. Therefore, actual profits never existed. Codswallop exists, but how do you take THAT to the bank?
The one thing that no one wants to know or admit is that the system known as business aviation does not work. That is very simple to understand for a logical person. Begging the question then, why do the people that run business aviation not understand the problem?
Egos, compounded by lack of knowledge, that’s it. That’s all there is too it. Egos, resulting in aviation’s version of the dead cat bounce is the answer to the obvious.
The simple conclusion is that if you do not understand you have a problem, but know something is wrong, ask for help. And when you realize you have a problem, before you reach V-1, you must admit it and ask for help or it is not going to end well for anyone.
Asking for help appears to be something that currently is not attainable in the kingdom of business aviation.
The end result of huffing and puffing through V-1 and without achieving VR with insufficient speed is “Boom”.
A real-life example of a VR issue or Dead Cat Bounce in the business of business aviation goes to a concept that I created in 1988 and co-founded in 1989 with Rick Haskins, known then and known today as Jet Support Services Inc., aka JSSI.
There are a lot of things I know about aviation/flying, but not specific to maintenance. Maintenance is a black hole for aircraft owners simply because maintenance is required and unless you understand how maintenance really works, aircraft owners are easy marks. So, I knew that a JSSI was needed, so I created it in 1988/89.
Also, I knew how to weaponize what I did know regarding engine TBO’s and took it to the banking system. When they understood what they did not know about TBO’s and how that affected their bottom line, they immediately required aircraft owners (they were funding) to have engine maintenance accounts (airframes to follow), ideally at JSSI. I also knew that the only other engine maintenance system at the time was based on a manufacturer trying to ease the pain of their new engine that did not work so great for a few years (I was aware of the problem and the kind of, sort of fix when I flew aircraft with that engine). So once aircraft owners were required to have a maintenance account by the banks, that manufacturer did not know how to react.
First the banks did what the banks do best, they sent out a letter to all aircraft owners requiring them to have or be with someone that provided engine reserve accounts in 90 days, and we were in place to respond to the call. Call and response!
The afore-mentioned manufacturer stumbled enough in the beginning since they originally set their entry price based on aircraft hours since new (which could be millions of dollars or more). Meantime I set up a pro rata system at JSSI which meant there was no sign-up fee or upfront costs except onboarding. That did it, everyone immediately came to us and did not ask a lot of questions simply because our contract satisfied the bank’s requirements, which I had been aware of since I triggered the requirement in the first place. So, it did not cost owners any huge upfront fee. Also, I knew that the velocity of hours per year per aircraft was extremely low, which meant that in most cases the aircraft would be traded well before any major work was needed.
Since the contract was for the plane, and not an individual when the aircraft was traded, the contract went with the aircraft, not the last owner. Meaning the next buyer would have to do the pro rata overhaul, but there were already tons of money in the aircraft’s reserve account based on the pro rata, that dramatically reduced their overhaul costs. Therefore, the next overhaul would be much cheaper than those that did not have the reserve account. Aircraft salespeople loved it because that made it an easy sale for salespeople!
All of that made the JSSI system develop very quickly.
After I left JSSI, things started to happen internally that caused JSSI to get sold off in the 2,000’s to the current owner. This owner knew zero about aviation, but he went to air shows to attain knowledge, knowledge that did not apply or work.
I never thought about JSSI again until I started hearing from some people that had been looking to buy JSSI and found there was a problem. When I heard it, I got it, so at that point I reached out to the then owner to offer a heads-up with the situation and if needed a helping hand, I knew how to fix the problem and I would help him. Of course, the new owner is full Dunning Kroger, and responded by telling me I was delusional.
But it turns out I was not delusional, nor were the companies that were seeking to acquire JSSI delusional or wrong. There was only one person in that circle that was delusional, and that became apparent to everyone when changes came a few years ago.
Knowledge not money is the keystone to success in aviation, and as of now, I have a record of accomplishment by creating two successful companies and know and understand the current problems within the revenue classification. So, if things are not going the way you need them to go, let me know. I fully understand what needs to be done, how to get it done, and when it gets done, it will completely change the landscape of business aviation indefinitely.
Contact me: rick eriksen@cox.net
