What if someone said you could increase your technicians’ take-home pay while reducing your payroll expenses. Would you be interested? Sure you would. Increasing take-home pay while reducing payroll has been the holy grail of business owners since the invention of employees.

"Profit Plus is basically just an accounting process change," explained Ed Upton, president, Profit Systems, Aviation. "It separates a technician’s taxable wages (payment for time and skill) from allowable tool expense reimbursements, which are non-taxable. By putting the amounts in two separate checks, the technician gets to keep more of the money he earns each pay period because the expense reimbursement isn’t taxable. It’s similar to reimbursing an employee for business use of their personal car."

So how does Profit Plus work? Simply, by using a little-known tax law, your technicians are eligible to receive reimbursement for the amount of money they have spent on purchasing their tools. And because most of the aviation industry’s technicians must supply their own tools, it’s a rule that everyone should take advantage of.

"Profit Systems acts as a third-party administrator of an IRS accountable plan and offers the program as a working- condition fringe benefit, which is covered by Treasury Regulation Section 1.132," Upton said. "That’s the legal foundation. Participation is really easy for employers and employees alike and there’s no out-of-pocket costs of any kind to either of them."

While Profit Plus is available to any technician, Upton said that there are some conditions—aren’t there always when dealing with the IRS? "The first and foremost is that we have to have an employer/employee relationship," he explained. "Independent contractors are not eligible under the rules."

Two other rules that Upton noted are that the tools that the technician claims for reimbursement must be "business-related equipment," and that any excess payment the employee receives must be returned to the employer.

And another unwritten rule Upton uses to qualify a technician is the type of toolbox he uses. "If a technician has a roll-around tool chest, chances are he or she owns enough tools to quality for the program," he explained. "If they don’t, it’s best to wait a while until they’ve purchased more tools."

While the Profit Plus program is relatively new to aviation, the company has been around since 1988 and has client companies in just about every U.S. state. Currently, its aviation client list is pretty impressive, including Evergreen Air Center, Million Air, and Cutter Aviation.

Okay, so you have a hangar full of full-time technicians who own their own tools, how do you help them use Profit Plus? The first step is for you, the employer, to sign up as a Profit Systems client company. "All that does is it gives us permission to come in and talk to the employees," Upton said. "The employer doesn’t pay us anything up front. Really, the only thing they have to do is make a small change to their accounting process to separate regular wages from the tool reimbursement expenses. It takes about 10 minutes per employee if you use ADP [a payroll processing company]."

The next step is for the Profit Plus representative to meet with your technicians and explain the program. Finally, technicians who want to enroll in the program are given a tool inventory form that they use to record all the tools they own and their value. Profit Plus then uses that total tool investment worksheet to arrive at an hourly reimbursement rate, which they give to your accounting department.

"Because the value of the tools belonging to each technician varies so much, each technician on the plan gets an individual tool reimbursement rate," he added. "Profit Plus is capped so that no more than about 20 percent of a technician’s total income comes from tool reimbursement."

Upton knows something about mechanics and their tools. He was the director of Northwest Airlines’s overhaul shop for 13 years, before being promoted to director of the airline’s worldwide line maintenance operations. And before joining Profit Systems, Aviation in 1998, he was senior vice president of operations for Reno Air.

The average technician currently enrolled in the Profit Plus program has about $12,000 invested in tools, Upton said. And that equates to about $200 a month in extra take-home pay. "A guy that’s making $20 an hour will get up to somewhere around $5 an hour as tool reimbursement until he is fully reimbursed," he said. "That’s $200 a week the company doesn’t have to pay any payroll taxes on or that the employee has to pay income taxes on." A win/win situation.

So how does Profit Plus get paid for helping you and your employees? Upton said that Profit Systems charges the employer an administrative fee, which is 5 percent of the value of the reimbursement checks. "It’s really not costing the company anything," Upton said. "The fees we collect are funded by savings created by the plan itself."

Profit Systems also charges each employee on the plan a small percentage of the tool reimbursement. "It’s 5 percent of the amount of the reimbursement check," he added. "Again it’s a self-generating program. The more the technician makes, the more we make." So, what technicians are looking at is paying Profit Plus a nickel out of every extra dollar they get to take home.

"The long and short of it is," Upton continued, "if a guy goes out to the Snap-On truck and wants a $100 tool, if he’s not on our plan, he’s paying $100 for that tool. If he’s on the Profit Plus plan, he’ll pay $100 for it now, but he knows he’s going to get $30 or $40 of it back in the coming months. He’s cut his net cost way down."

In summing up the whole program and its benefits, Upton said, "Profit Plus is a technician benefit plan that increases a technician’s take-home pay while reducing employer payroll expenses with zero out-of-pocket costs to the technician or the company." What’s not to love about that?

For more information, contact Profit Systems, Aviation, phone: 877-736-6222 or 775-827-2033, www.profitsystemsaviation.com – By Dale Smith

Making Water Obsolete?

Washing an airplane seems like a simple enough project. Get a hose, a bucket of soap, and a sponge and go at it. In many areas, it’s not that simple any more. "The EPA [Environmental Protection Agency] and Clean Water Act are cracking down on airport wet washing operations," explained Steve Rotermund, president, Plane Detail. "To meet regulations and compete in wet washing you need wash trucks or washing equipment, water reclamation systems, oil and sludge separators, and you have to pay disposal fees to get rid of the waste materials. All of this costs a lot of money," he continued, "and those increasing wet-wash costs are usually passed on to the customer.

Rotermund has a better idea. His company, Plane Detail, dry washes airplanes. "Not only do we help the environment and save water, our dry-washing process produces a much better finish," he said. "By getting more [dirt, bugs, etc.] off the flight surface, our dry wash not only saves airlines money up front, it saves them even more in better performance and lower fuel costs."

Rotermund explained that they’ve learned that the old-fashioned way is the best way to dry wash an airplane. His washers use a high-absorption alcohol cleaner that is applied with a wet towel and then buffed dry with a clean towel. No mechanical equipment is used in the washing process. Rotermund said he has experimented with every product on the market, and they use the ones that have proven to do the best job.

But, hand-washing an airplane? That can’t be cost-effective. Surprisingly, it is. "Three of our guys can wash an Embraer 145 in about three hours," he said. "And it’s about the same for a Canadair CRJ 200. The CRJ 700 takes about three-fifteen and the bigger 900 takes three and a half."

When you compare that to the time and cost it takes to set up a wash truck and do the water-reclamation process, not to mention that the aircraft has to be out of the hangar, Plane Detail’s hand-washing process is the more cost-effective solution. Besides, as Rotermund points out, you can’t wet wash an airplane while it’s in the hangar undergoing maintenance. With Plane Detail’s dry wash, you can complete two or more tasks at once.

Of course to meet efficiency goals, Rotermund has planned every step of the project. "Our entire process is systematic," he explained. "Our guys just don’t go out and wipe down an airplane. They start on the same spot and follow the same procedures every night. We always start on the left side of the airplane because that’s the side the customers see. If the airplane gets pulled before we can finish, at least the money side is done."

Rotermund has the process so fine-tuned that even the way that the towels are folded is pre-determined. "We need to get maximum use out of every towel," he said. "When a wet towel becomes too dirty, you use your old dry towel for washing and get a clean dry towel. When you spend over $65,000 a year for towel services, you want to make sure you’re not wasting anything."

Plane Detail also takes the training of its technicians seriously. The company has developed a training program, including a 78-page manual that covers everything from chemicals, to ladder safety, to aircraft safety. "We tell them what they can touch on an airplane and what they can’t touch," he said. "We also train our technicians to look for damage on the airplanes as they clean them. It’s another way we help our customers."

Right now the future looks spotless for Plane Detail’s dry-washing business. Plane Detail is concentrating on regional jet operators because, as Rotermund puts it, "the majors just aren’t interested." Although, he said, Frontier Airlines has begun to use Plane Detail’s services because of the EPA and clean water issues. ��

"Our company has doubled in the past year and we expect it to double again this year," he added. "We are continually adding locations and employees to meet the demand." Dry washing isn’t Plane Detail’s only business. The company also offers aircraft appearance programs, C-check or heavy check inspection cleanings, lav services, carpet change outs, and security checks.

For more information, contact Plane Detail at 636-530-9380, www.planedetail.com� –

Dassault Falcon Keeps Investing in Infrastructure

Despite reduced sales of business jets and cloudy forecasts for the near-term future of business aviation, Dassault Falcon Jet Corporation is not delaying plans to build a new paint hangar at its Wilmington, Delaware location.

On July 10, Dassault Falcon Wilmington executives and local government officials celebrated the ground-breaking for the new paint hangar.

At 40,000 square feet, the new paint hangar will feature multiple bays and be Environmental Protection Agency Title V-approved. Painters will use the most modern high-solids paints to lower the release of volatile organic compounds into the air.

"We are building a premier paint facility," said Todd McGahey, vice president and general manager of the Wilmington facility. "In this region [the Northeast], an environmentally sound, quality paint facility of this size just does not exist, and we are going to establish one here over the next year."

Delaware governor Ruth Ann Minner attended the ceremony. "The new paint hangar," she said, will ultimately bring as many as 25 high-tech jobs to the Wilmington area, and we are very pleased to be working with Dassault Falcon to provide Delaware this much-needed economic boost."

In addition to building the new paint shop, DFJ Wilmington is also undergoing a major renovation of the entire facility, which Dassault Falcon purchased from Atlantic Aviation two years ago.

All of the facility’s heat, lights, and electricity is being upgraded, and the upholstery, cabinet, avionics, and wire installation shops will be improved to speed workflow and deliver projects quicker to customers.

The DFJ Wilmington Structural Repair Center, which repairs major Falcon Jet metal and composite components, continues to expand and add qualified technicians to handle the increasing workload.