|BlueSky Business Aviation News|
Some argue that the air taxi is a solution in search of a problem, that the current charter, fractional ownership schemes, corporate flight departments, FBOs, etc., meet every demonstrated need. After all, if travelers needed a different service, they would ask for it, right? Well, perhaps not. Or perhaps not all of us have been privy to all the inquiries or market research on the subject. That’s fair.
I take the position that the air taxi, particularly the very light jet (VLJ) air taxi can work very well, opening up business aviation to a relatively new kind of customer.
Who is the customer?
But first, let us look at the fundamentals for a moment. Who is this new kind of customer? In my mind, it is one or two business travelers who need to go somewhere that is farther away than they can drive comfortably in three hours, they need to be back the same day, and they probably don’t have a lot of lead time to arrange travel. Let me explain a bit.
Leisure travelers have all day to get somewhere, and they are usually looking for a bargain. This is not our customer. The VLJ air taxi is about speed and convenience. There and back, same day, reasonable cost, only a phone call away (OK, a webpage away, but the same idea--short notice trips). “Reasonable” price is compared to the cost of driving all day long and losing an entire day at work, or possibly worse, having to fly commercial and stay overnight at a hotel, losing TWO work days. Neither the leisure traveler nor the status traveler care that much about staying overnight in a nice hotel; that’s kind of what they are there for. So, we are pretty well left with the business traveler.
Most businesses are OK with their people driving an hour or two to get to a meeting. Anything farther away than that, and they start looking at other means of transportation. In Europe, the train system is excellent, and an air taxi cannot generally compete inside 300 miles or so. In the US, it’s a different story. The train service here is generally execrable except in the Northeast Corridor (Boston, NYC, Washington DC), so the VLJ air taxi is quite competitive with either driving or the commercial airlines at shorter distances, say from 150 miles out to perhaps 600 miles. I suspect that at the 500-600 mile mark, we are looking at a different mission, one better fulfilled by a larger, heavier, more expensive aircraft. Looking at trips from 150 miles to 450 miles seems to make a good bit of sense for a couple of reasons.
Now, let’s look at bit deeper into the business model. Let us assume for this discussion, that the air taxi business is not one or several large corporations, but rather a distributed, decentralized model. Think more eBay than Amazon. I.e., a lot of different, independent service providers rather than a large more-or-less monolithic corporate entity.
My thought is that the VLJ air taxi (there has to be a better name than this) could function quite nicely if it had an eBay to function as the marketplace. That is what eBay did for Beanie Babies; they brought buyers and sellers together in one place for a minimal cost. This is an “open” marketplace. It was a brilliant example of what Adrian Slywotzky calls the Switchboard Profit model. (The book to read is “The Art of Profitability.”)
Given an on-line marketplace where our business travelers can quickly and efficiently book a trip, who is on the other end of the transaction? The independent air taxi owner/operator. It does not matter what kind of aircraft is offered, how it was financed, or where it is based. That is entirely up to the operators and how they interact with the market. Those who have the right pricing, the right aircraft, and are based in the right places will succeed. Those who don’t, won’t.
The FBO advantage
This does not mean that an existing charter operator cannot add a VLJ to the fleet and participate in the air taxi marketplace. Not at all. We may well find out that the existing FBO has the most expertise. Certainly, they start out with a lot of advantages in terms of understanding aircraft operations, customer relations, and they have an established track record as a business, for better or worse. But, my thought is that if the acquisition cost of a VLJ can be driven down to something comparable to that of a new, large over-the-road tractor truck, a whole new aspect of the industry can be created.
The VLJ air taxi
Let’s talk airplanes for a moment. The VLJ air taxi has to be as inexpensive to acquire and operate as reasonably possible so that a single entrepreneur, a pilot, can finance the airplane and after expenses still make a decent living off of a reasonable fare. Given that we are talking a jet, this means a single engine, four seats, and a pretty reasonable fuel burn. More Diamond D-Jet than Eclipse. The Stratos 714 looks like another good candidate.
Looking at it from the entrepreneur-pilot’s perspective, we need an airplane that is optimized for four round trips of about 250 nmi per day (fuel up after lunch and at the end of the day), 250 days a year, for ten years, and still have a good residual value at the end. From a systems perspective, it should be dead simple with as few moving parts as possible to minimize maintenance costs. Opposing that is the need for a really good panel with an autopilot, autothrottle (it is a jet, after all), and an easy to use navigation system. Something that would allow filing computerized flight plans from the cockpit would be nice.
The ultimate VLJ air taxi does not have to be STOL. It does not have to be over-water capable. It does not have to be CAT III. It does not have to be carbon-fiber. It does not have to be supersonic. It does not have to have a 51,000 ft certified altitude. It does not have to have an on-bard lavatory. It does not have to have a galley or a coat closet. This is a puddle-jumper: small, fast, stable, handy, easy to fly, with a maximum range of around 800 nmi.
But, aircraft and a website are not the only things needed. What about the airport? Who knows where to go to catch the air taxi? What if it’s raining? How’s the parking? Is there a passenger lounge? Someplace with a net connection? How about one of those telepresence systems? Can you get lunch there or rent a car if you have to? What about a meeting room? Certainly, we can start with something relatively simple, and as business builds we can upgrade the ground infrastructure. But, we should keep in mind that the ground experience often sets the tone for the flight.
The point is that “air taxi” is a system, not a description of an airplane or a company. It is a system designed to support multiple short hops with a short lead time for one or two people who will often need to go out and back the same day. Longer trips tend to be charters or corporate flight departments, or even commercial airlines. Trips for larger groups tend to go the same way. This is fine. This is as it should be. The air taxi is not the answer to every traveler’s needs. It has its own niche, and I think it will be an important one.
Terry Drinkard is a Contract Structural Engineer based in Jacksonville, Florida whose interests and desire are being involved in cool developments around airplanes and in the aviation industry. He has held senior positions with Boeing and Gulfstream Aerospace and has years of experience at MROs designing structural repairs. Terry’s areas of specialty are aircraft design, development, manufacturing, maintenance, and modification; lean manufacturing; Six-sigma; worker-directed teams; project management; organization development and start-ups.
Terry welcomes your comments, questions or feedback. You may contact him via firstname.lastname@example.org
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