FlightSafety France

Managing Customer Risk in a Tight Market

Monique Zaccardelli – Chief Financial and Administrative Officer

Falcon, Embraer, Bombardier: FlightSafety specializes in pilot training for business and regional aircraft. Its clients include billionaires, militaries around the world, as well as aircraft manufacturers and airlines. This sector of the aviation industry has been under particular strain since September 11, making client risk management a strategic priority. A review with Monique Zaccardelli, Chief Financial Officer.

What impact have recent industry restructuring efforts had on customer risk management?

Monique Zaccardelli: It’s becoming harder to get payments on time, and the number of disputes is rising. Some of our clients have been subject to collective proceedings, which often do little to protect creditors’ interests. Just recently, an airline that was unable to pay agreed, in exchange, to help train some of our instructors. However, the bankruptcy trustee objected to offsetting the invoices, and we had to pay without any hope of recovering payment for our services. That resulted in a net loss of 35,000 euros.

What steps have you taken to address this situation?

Mr. Z.: We have strengthened our terms and conditions of sale and are monitoring accounts more closely. Once a certain threshold is exceeded and invoices remain unpaid, I block the issuance of training certificates to the customer as well as access to flight simulators. However, credit insurance is not a cost-effective option; its cost is too high, and many transactions, deemed too risky, are not covered.

Have you nevertheless invested in debt collection?

M. Z.: Because I was confident I would get a real return on investment with Cabinet ARC. They are business lawyers with strong expertise who are capable of handling complex cases and have a real mastery of negotiation. They also have a deep understanding of our industry, airlines, and their corporate culture. They operate on the international stage, at airports all over the world—which is essential for a company like ours that works globally.