Navy Flying Clubs : Management Control Systems and Performance Measures

The Monterey Navy Flying Club has undergone tremendous change in the last decade. The club has sustained a painful downsizing due to the closure of Fort Ord and the substantial reduction in number of members, flight hours, aircraft, and staff. During the peak period when Fort Ord was open the volume of members and flight hours allowed informal short-term planning to fulfill all the clubs financial needs. Additionally, the club had an ample supply of surplus military aircraft (T-34E's & T-4l's) along with significant free parts support that allowed extremely low prices which covered all overhead. Currently, the club has essentially depleted its supply of free parts support (especially engines and propellers) and is now faced with the dilemma of whether or not to keep one T-34E in compliance with an expensive Airworthiness Directive. Now more than ever, this club and other Navy Flying Clubs need objective strategic financial advice on what course of action to pursue. The clubs current financial control measures are do not provide insight into the financial health of the organization. MWR provides financial statements but there is currently no analysis of what the reports are saying. The focus has been on short-term thinking. When the clubs see they have enough money for the next month or two, they cease evaluating their financial position. This has led to clubs disbanding in the worst case and aircraft that are otherwise airworthy being grounded due to insufficient funds to overhaul and engine or other maintenance troubles. The club has been living in the short-term management mode for years and is still struggling to settle into its new business environment of fewer members and planes. All Navy Flying Clubs need to start assessing their maintenance and aircraft replacement needs and budgeting accordingly. In the past when free planes and parts were the norm the lack of planning had no effect.Naval Postgraduate School Monterey CA Graduate School of Business and Publicpolicy is the author of 'Navy Flying Clubs : Management Control Systems and Performance Measures', published 2002 under ISBN 9781423506225 and ISBN 1423506227.