General Aviation Aircraft Value Analysis – Trains, Planes, and Automobiles

General Aviation Aircraft Value Analysis – Trains, Planes, and Automobiles

Imad Salman

ASCI 602 - The Air Transportation System

Prof. James Gallogly

The purpose of this paper is to conduct a General Aviation Value Analysis (GAVA) to determine whether one form of transportation is more efficient than another, in order for a group of colleagues to attend a business meeting. This analysis of general aviation aircraft value analysis will cover 4 transportation modes during a short distance business trip (approximately 400-800 miles) and a long distance business trip (800-2,500 flight miles) and the cost and time associated with each for four people. The research compared and contrasted two trip locations, with multiple variables of attendees, modes of travel, and expenses associated with each variable.

The methods will consist of privately owned vehicle, train, commercial flight and business charter flight as a short distance business trip to and from New York City, NY to Detroit, MI and New York City, NY to Oklahoma City, OK as a long distance business trip.

• Using a Privately Owned Vehicle/ Short Business Trip from New York City, NY to Detroit, MI

         In using a POV in this analysis, it will be assumed that 4 cars and 4 people will be traveling together.  The travel will be billed based on the IRS standard mileage rate (Beginning on Jan. 1, 2012, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations)

The rates are as following:

• 55 cents/mile
• Per Diem $65, rooms $115 per day, and $900/Day per employee. (GSA.gov, 2016)

Nine hours each way/ 614 miles travel distance. (TravelMath.com, 2016)

Below is a breakdown:

• This would cost the company $10,800 in wages per four employees, per three days. (3 days of Salary per employee is $2,700 x 4 employees= $10,800)
• (614 miles’ total x $0.55/mile = $377.70 one way per car)
• (Per Diem $65/person/day x 3 days = $195 x four employees = $780)
• (4 Rooms x $115 per night x 2 nights = $1380)

Total = $13,715.40 Round trip

If all six people each drove their own POVs to the meeting in Detroit, the costs would increase to $15,981.60. For every mode of transportation being compared in this study, the cost and time of commuting to work from home will be identical for everyone involved.

• Long Business Trip from New York City, NY to Oklahoma City, OK

         In this instance the POV will be used on a long distance drive. Additional time has been added for the trip to Oklahoma City from New York City.  (TravelMath., 2016) The brake down here will be the same with the exception on added time for breaks in traveling (calls, meals, restroom, etc.)

• 23 hours each way plus 6 hours for breaks and meals each way
• 7 days of Salary ($900/ day x 4 employees’ x 7 days = $25,200)
• 1,451miles travel distance (1451 miles’ x $0.55/mi. = $739.20 one way per car)
• Per Diem $65/person/day for 7 days = $1820
• 4 Rooms x 115 for 6 nights = $2,760

                                                         Total = $31,258.40 Round trip

If all six people each drove their own POVs to the meeting in Oklahoma City, OK, the costs would increase to $35,693.60.

It is clear from an economic and productive point of view, that in order to get to the destination for a meeting and driving is an enormous drain on time which in turn is a loss in money in not only in salary but in productivity as well. The personnel cannot work productively or effectively while driving. In addition, the fatigue they face once there and back can have an adverse effect on the meeting and judgment.

• Using the Train/ Short Business Trip from New York City, NY to Detroit, MI

           To use the train for short or long distances we have to consider what other consideration must be taken. For this exercise, we will include time taken to get to and from the office to that station and time to embark and disembark at the destination. Will train travel in the area of the U.S. Public rail travel is limited in scope by schedule and carries.  In this case the only carrier in the domestic interstate rail business is Amtrak. Coach is used to the pricing from Amtrak.  (Amtrak, 2016) Pricing broken down as Per Diem $65/person, rooms $115/night, Salary $900/day/person, parking $20/day, and car rental $65/day.

13 hours each way plus 2 hours Embarking/disembarking, travel to and from the office, and car rental, total time 28 hours.

• This would cost the company $10,800 in wages per four employees, per three days. (3 days of Salary per employee is $2,700 x 4 employees= $10,800)
• Parking $20/day x4 cars for 3 days = $240
• Train Fare for 4 in coach = $856 (Amtrak, 2016)
• (Per Diem $65/person/day for 3 days’ x 4 employees = $780)
• (4 Rooms x $115/night x 2 nights = $920)
• Car Rental $65/day (Hertz, 2016)

Total = $13,661

For the trip there is a stop in Toledo, Ohio where the employees must be bussed into Detroit for the remainder of the trip and same for the return. (Amtrak, 2016) There is no direct route to Detroit by train. In addition, while to the cost of the train fare is low for four people it is the time that becomes an issue here. The employees spend over a day just in transit to and from the destination.

• Long Business Trip from New York City, NY to Oklahoma City, OK

       Taking the train for a longer distance becomes more of a larger time consumption and a bigger money draw. Considering the same assumptions from the short trip, the following results are:

36 hours each way plus 2 hours for Embarking/Disembarking, travel to and from the office, and Rental Car pickup, Total Time 76 hours.

• This would cost the company $28,800 in wages for four employees, per 8 days. (8 days of Salary per employee is $7,200 x 4 employees= $28,800)
• (Parking $20/day x 4 cars for 8 days = $640)
• Train Fare for four employees in coach = $1,800.68 (Amtrak, 2016)
• Per Diem $65/person/day for 8 days = $2,080
• (4 Rooms x $115 for 7 nights = $3,220)
• (Car Rental $65/day x 8 days = $520)

                                                                  Total = $37,060.68

                 Again, the issue here is not the savings in the cost of the fare, it’s the 72 plus hours that becomes the obvious problem. The up side and only slight is the fact that on the train, the employees may be able to get some work done on the train without concentrating on the trip itself and work together.

• Using Commercial Air Travel/ Short Business Trip from New York City, to Detroit, MI

For this scenario the air carrier being used will be Spirit Airlines. Spirit Air has a large present in both cities and the best fairs with the best times to and from the destinations used in this analysis. Using the current pricing from Spirit Air for fair cost.  (Spirit Air, 2016) Pricing broken down for this trip as Per Diem $65/day, rooms $115/night, and $900/Day, Salary $900/day/person, parking $20/day, and car rental $65/day in total this is what is represented: