The Beauty of Air Taxis

"It is, by far, the easiest solution to traveling there and back in the same day."
Mike McMenamin, CEO Access Insurance Co.

With all the focus on the beautiful Masters Golf Tournament this weekend in Augusta, the Augusta Chronicle's Business section features an article today by LaTina Emerson entitled "Air Tax Services Growing." The article highlights ImagineAir, and also discusses SATSair and DayJet. The article describes how Mike McMenamin, the above quoted CEO of an Atlanta insurance company, has been using air taxi services for the past three years. This week, he flew on ImagineAir for a quick day trip to see the players, the greens, and the beautiful azaleas at the Masters. "He flew in Thursday morning and returned home later that day by 5pm, in time for dinner and to prepare for work Friday." The article also mentions the following:

• ImagineAir is considering locating a base in Augusta.


• ImagineAir has flown more than 500 flights since it opened a year ago.


• ImagineAir has 5 Cirrus SR-22s and plans to add another 5 to 10 Cirrus and several Eclipses this year.


• SATSair also ferried passengers to the Masters with 25 bookings (including PGA players like Charlie Warren) and is flying about 1800 passengers a month.


• SATSAir has 26 Cirrus SR-22s.


• In March, SATSair had a record 2,000 passengers (an amazing number!).

In 1994, I once took a "break" from law school to attend a practice round, but, of course, I drove there. The course is indeed unbelievably beautiful. This is a splendid time of the year in Georgia and the Carolinas with the spring flowers in full bloom before we get hit with the suffocating heat and humidity of the summer. I have had the opportunity the past few weeks to share with my young daughters the beautiful - albeit short lived - sight and smell of Wisteria draping a bunch of tall Southern pines near our home.

The article demonstrates that the air taxi model is not only for business efficiency, but also for pleasure travel and adds a whole new dimension to time savings and convenience. I agree with Mr. McMenamin's quote above and would even take it a step further: Air taxis are by far the easiest way to travel anywhere right now. For those using them, they are indeed a beautiful thing.

Read more!

Good Week for Air Taxi News Coverage

I continue to see articles that discuss the "fledging" air taxi industry. The same articles often quote national aviation industry analysts, pundits and experts who consistently provide negative comments about the future of the air taxi market. So, favorable news coverage this week was indeed welcome.

This week was a good news week for air taxi visibility bolstered by favorable coverage of Eclipse, Dayjet and LinearAir by Aviation Week/Aviation Daily in addition to national CNN coverage of ImagineAir.

As I discussed earlier this week, the week started with some positive growth predictions at the FAA Forecast Conference. There was also an insightful writeup on Dayjet published on Tuesday by Aviation News. Claiming to now to have 28 aircraft and 1,200 members, Dayjet stated they are getting some interest from corporations who are asking for service into cities that are not currently DayPorts or DayStops. That indicates to me that the word about the value proposition of air taxi travel is indeed spreading. Frequent customers tend to be no surprise: "attorneys, lobbyists, a fair number of middle managers in real estate or engineers, higher end sales in IT and medical, and top execs for smaller companies." They all fit the profile of individuals whose efficient utilization of time matters to the client (and them) and who understand the "time value of time" that I have discussed before. Dayjet's average flight length is running about 300 miles with 90 percent of the flights being less than 600 miles. In terms of future aircraft acquisitions, Dayjet expects 60 to 70 additional Eclipse 500s by late spring. It says it will have 300 aircraft by the end of 2009.

The week concluded with additional positive exposure and awareness of the VLJ and air taxi marketplace. Here are the highlights:

LinearAir's partnership with Virgin Charter received a lot of coverage including an article in Aviation Daily today. The Aviation Daily article opens: "The on-demand air taxi market soon will not be able to keep pace with the demand, small aircraft manufacturers and and air taxi operators say, and this segment of the industry will be expanding worldwide." Claiming to be the first and only company to provide Eclipse 500 services as a partner with the new Virgin Charter enterprise, LinearAir continues to demonstrate its multi-faceted marketing approach to its services. I have previously discussed LinearAir's great referral program. In addition to the Virgin Charter partnership, according to LinearAir's Andrew Locke, they are also experimenting with variable pricing models whereby the longer you fly, the greater the percentage reduction in the cost you can receive. Here's how it works: For flights over 3 hours, you get a 5% discount and then a corresponding additional 5% discount per hour for flights of up to 8.1 hours receiving a 30% discount. Perhaps a refueling stop will be needed, but this pricing model is another incentive to give them a try.

Eclipse was also represented at the FAA Forecast Conference and covered by Aviation Daily today. According to Eclipse's Matt Brown, the VLJ market is growing by an average cumulative rate of 21%. Eclipse has already delivered 31 aircraft this year and hopes to be producing one airframe per month by the end of this month. Currently, 78% of the aircraft orders are from the domestic United States, but Eclipse projects that half of the orders will be from international sources by 2010. According to the Aviation Daily article, Eclipse "sees India, China, Australia and possibly South America as growth markets." With their contributions to technology and international business, can anyone doubt that India and China are ideal markets for the Eclipse? Eclipse's current customers includes owner/pilots, corporations that before could not afford an aircraft, Part 135 air taxi and charter companies and a potentially emerging new sector of pilot training businesses that provide multi-crew/turbine time.

ImagineAir's 24 year old CEO Aaron Sohacki (some twenty years my junior) received some great exposure this week by being featured on CNN's "Young People who Rock" series. Aaron is a Georgia Tech graduate as is ImagineAir's President, Ben Hamilton. Both are pilots. Like me, Aaron as a child enjoyed going to the airport with his father to watch airplanes. According to CNN's website, "'Young People Who Rock' is a weekly interview series focused on people under 30 -- from CEOs to entertainers to athletes to community and political leaders -- who are doing remarkable things." ImagineAir's leadership team includes some bright young men like Aaron and Ben in addition to some more "mature" members like its Director of Operations, Ken Phelps, who has over 35 years of experience with major airlines and over 16,000 flight hours. Ironically, Ken and I were at one time employed by the same great major air carrier based in Atlanta.

There are a number of air taxi operators who have announced they will be airborne before year's end. The positive press is encouraging and is more than mere irrational exuberance. It's proof of the demand for the platform driven by delivery of time savings and quality of life improvements and fostered by further education of the target customer both here and in the international marketplace. Overall, a very positive week.

Read more!

Jetpool's VLJ Show in the Carolinas

Last year, I attended the Jetpool VLJ Show in Charlotte, North Carolina. As far as I know, it really was the first VLJ-specific show where the focus was exclusively on VLJ platforms. While VLJs can be seen at the NBAA Convention, they can also get lost in the thousands of attendees and the hundreds of thousands of square feet of exhibit space. Not so with the Jetpool Show. It was in an FBO hangar with easy access and close parking. And best of all, it was free.

Jetpool is another innovative company focusing on VLJ management and operations. I first met its CEO Ryan Stone several years ago. Like me, Ryan has a Navy officer background. Unlike me, Ryan went to the Naval Academy and was a submarine officer. Anyone who can run a nuclear reactor and drive a submarine is a smart person. Like me, Ryan went to a fine institution - UNC-Chapel Hill (my undergrad alma mater) -- later in life for his MBA. His partner and Jeptpool President Paul Sameit is also a former Navy officer. Like Ryan, Paul also went to the Naval Academy and has an MBA. Like me, Paul got his aviation start in the P-3 Orion chasing submarines and those in submarines. Perhaps that's why I admire Jetpool so much. Smart, innovative, and a relatively young group of veterans and entrepreneurs with graduate degrees and a passion for the future of aviation. Jetpool's leaders have put together a business plan and are executing it with a great deal of mission, vision and success. And, look for Jetpool to get its Part 135 charter application approved in the near future so they can begin charter operations in the Carolina blue skies.

In the meantime, they are spending a great deal of time planning and executing a great show and a forum to educate others in that Jetpool is again putting on The Future of Business Aviation VLJ Show in Charlotte on Friday afternoon March 7 and Saturday March 8. It's a great opportunity for those who are interested to see and touch these platforms or mock-ups of next generation aircraft at a convenient, focused venue. It's being supported by the Air Taxi Association. If you see anything you like there, give me a call and we can help you out. Otherwise, it's a great excuse to visit an airport in the spring (almost) in the Carolinas.

Read more!

States and Municipalities Leading the Way

Several states and municipalities have shown an understanding of the multi-faceted impact that an air taxi can have on viable economic development. Air taxi services are opening geographic regions to convenient and reliable air access and providing options for business travel that have never before been available. I want to highlight some of those initiatives. Here are some forward looking states and examples of a few municipalities who are leaders in their understanding and support of air taxi programs.

Virginia was the first to lead the way as the home state of the original NASA SATS program. Today, it has a lively and engaged Department of Aviation which has made a strong commitment to the further development of air taxi transportation. Virginia is visibly present at every event where air taxis are discussed including NBAA and the recent International Air Taxi Convention. Because of Virginia's insightful and proactive leadership, it is no surprise that SATSAir, Linear Air and ImagineAir all frequent the Virginia skys and airports. In the upcoming months, look for Skyway Air Taxi to join the sky as another air taxi operator there.

North Carolina is another leader. In October of last year, the state was the first to receive a significant federal grant award based on a novel application pursuant to the Small Community Air Service Development Program. The award of $573,278 was received based on an application developed in partnership with SATSAir with the specific purpose of increasing air taxi services to 11 of the state's underutilized municipalities. It was a smart application based on teamwork and vision.

Florida, DayJet's home, is also a leader. Florida has welcomed DayJet and plans to have a Very Light Jet Center of Excellence in Tallahassee. Even more important, last November Florida announced a specific program whereby state employees can use an existing Air Taxi Services state contract to fly SATSAir, DayJet or ImagineAir on official business trips at pre- approved and negotiated rates.

Cities all across Florida are receiving the benefits of air taxi service. For example, Naples, Florida claims to have already enlisted over 70 DayJet members from 33 companies who have flown since its opening as a DayPort in early January. In a February 13th article in the Naples News entitled "DayJet Trippers," Naples Mayor Bill Barnett stated: “This city has just been waiting for a service like DayJet.” “This is a great day for the business community. What this means to the business community is just phenomenal,” said C.J. Hueston, incoming board chairman of the Greater Naples Chamber of Commerce. By the way, at the Naples' event, DayJet claims to have made over 1000 takeoffs and landings in January.

In terms of other municipalities, I have also been impressed with the City of Savannah. Named Georgia's first DayPort, Savannah has recognized the business and economic impact of all aspects of general and commercial aviation. It is no mistake that Gulfstream makes its home in Savannah and continues to move forward with a $300 million, 7 year expansion plan there. It's also no mistake that the Savannah airport is called the Savannah Hilton Head International Airport even though Hilton Head Island is an hour drive north of Savannah in my home state of South Carolina and has its own airport. But while the Town of Hilton Head Island passed an anti-aviation and short sighted local zoning ordinance last December purposefully limiting the length of its airport's 4200 foot runway (that I worked hard to prevent) and which the Aircraft Owners and Pilots Association also vocally opposed, Savannah understands the power of aviation commerce. Several weeks ago, DayJet was in town speaking to over 50 leaders of Savannah corporations and businesses at a meeting apparently arranged by the local Chamber of Commerce. For municipalities that want to be a DayPort, follow Savannah's lead. They understand.

Other municipalities are hoping -- and dreaming -- to get air taxi services. For example, in an article this past week in the Athens Messenger, entitled "Seeking a Lift for the Local Economy, the Ohio University Airport in Athens, Ohio, stated that it hopes to attract an air taxi service by next year. "On-demand air flight makes it more feasible to run a national business out of Athens," said a local businessperson whose employees are spending hours on the road on business trips. The Ohio University President stated that the University's efforts to bring on-demand air travel are centered on increasing the local economy.

Business people understand. So do academics. Air taxis do not demand government subsidies, but they do ask for passionate, vocal, and meaningful support from the state and local politicians and the business community so that the private/public partnership can thrive. Here's to Virginia, North Carolina, and Florida who are leading the way, and in so doing, reaping the benefits and rewards of air taxi service.

Read more!

Choices: Air Taxi "Per Seat" Pricing Models

Not all air taxi operations are the same. They use different aircraft and different pricing models. I am frequently asked how much they cost when I explain to others their tremendous time savings advantages. In the United States, there are several different emerging pricing models for such "per seat/on demand" travel. Regardless of the model, if you place a value on your time, air taxis are affordable. Here is a brief discussion of the models of current operators:

The true "air cab" model – Currently employed by SATSAir using the Cirrus SR-22 aircraft, just think of hailing a nice taxicab in New York City. The passenger gets the whole cab, with one driver and 3 seats – one seat in the front and two in the back. The passenger pays by the meter for the time in the cab. If there is a traffic delay, the passenger pays for that. The pricing is based on the aircraft's Hobbs meter. Prior to flying, SATSAir will quote an estimated price, but the actual price depends on the actual "engine on" time. Therefore, the quoted price might increase if there is an ATC delay or decrease if the aircraft arrives at that destination quicker than anticipated perhaps due to a significant tailwind. With SATSAir, the price per hour ranges between $495 to $595 if the passenger purchases a "package of time" between 5 to 20 hours. Normal non discounted package time runs $695 per hour.

Because the passenger is buying the whole aircraft, this can be an extremely economical pricing model for travel for a group of more than one. For example, a trip from Charleston to Savannah would be an approximate 111 mile, 2 hour car trip. On the other hand, it would be an 81 mile direct flight and probably take about 46 minutes in the Cirrus with an additional 4 minutes for runway taxi time. With a flight time package, one passenger would be charged between $412.49 to $495.83. If three people go on the same trip, the price drops to $137.50 to $ 165.28 per person. The cost does not change depending on the time of the flight, but if the aircraft is delayed on the ground, the passenger will pay more. Finally, the cab will go just about anywhere 7 days a week and if you want the cab to wait for you, the charge is $100 per hour.

The fixed price/full plane model - Like SATSAir, ImagineAir flies the Cirrus; however, ImagineAir sells the aircraft at a fixed price, not based on time. Pricing is available on line. ImagineAir sells flight cards that provide a discount from 5 percent ($3000 card) to 20 percent ($50,000 card) depending on the amount of the card. Assuming availability, ImagineAir quotes the Charleston to Savannah flight with an early morning departure at $420, but as low as $366 with the 20% discount flight. Here again the passenger purchases the entire aircraft, so the price goes down per passenger. Cost does not change if there is a delay nor does it change based on the time one wants to fly.

The single seat/gate time dependant model - DayJet is currently using this model in the Eclipse. On its website, a Charleston to Savannah trip would take 54 minutes. If one requests a 1 hour gate or window desiring to leave at 7AM and arrive by 8AM, the trip price is a premiun at $850. However, if one increases the size of that window, the price drops dramatically. By requesting to depart by 7AM and arrive by 9AM, the price is $628. The price drops further as the window expands: 3 hours - $454; 4 hours - $385; 5 hours - $313; 6 hours - $313.

DayJet calls it "Time Value Pricing "whereby the passenger can adjust the departure and arrival time gate. The larger the gate, the lower the fare will be because in effect the passenger is providing DayJet more flexibility in the scheduling and operations of its aircraft. All these quotes are "truly per seat." The passenger might share the 3 seat aircraft with someone else and with a large window, there might be one intermediate stop en route to your destination. The price is per person, so if a party of three buys all three seats and therefore buys the aircraft's full capacity, each person still pays per seat. In other words, there is no costs savings by aggregating the numbers in your party. Finally, with DayJet, one is limited to their selected destinations and weekday flying, but the list of destinations is increasing rapdily to include a significant geographic spread in 5 southeastern states. I expect the demand will ultimately lead to weekend flying, too.

Conclusion

In the future, the greater availability of air taxis in different aircraft and different pricing models will provide an incredible number of options for air mobility, thereby replacing hours on the interstate. Air taxi operators with multiple aircraft types -- including the Caravan, the Cirrus and the Eclipse -- will provide those options. There might be business trips when time is of the essence, speed is important and price becomes less of a concern. Book an Eclipse. On the other hand, a weekend getaway with flexibility in departure times for a small family is another scenario. Take a Cirrus. The key is that the different models and different aircraft provide new choices. Choices that before now were not available. And, there is no requirement for a Saturday night stay nor does the price decrease for round trips or depend on how far in advance you book the flight.

Quality of life, time savings and new choices are the key. A typical trip might be: Travel from Charleston to Chapel Hill, NC with 2 friends on Friday afternoon in a Cirrus to see a basketball game; drive from Chapel Hill to Charlotte Saturday afternoon by yourself in a rental car to visit relatives; fly from Charlotte to Peachtree City south of Atlanta Monday morning in an Eclipse for a business meeting; and fly back from Atlanta to Charleston Wednesday on a traditional commercial air carrier. Some states and municipalities see the clear advantages to an air taxi service. That will be the subject of a future post. In the meantime, I also expect the different pricing models to evolve somewhat. In the short term, considering the alternative means of getting there, air taxis are affordable, comfortable and highly efficient.

Read more!

Practical Advice: Obtaining a Part 135 Certificate

I have a number of clients and inquiries from others who are ready to jump right in and get their air taxi service up and running. Their first question is "How do I get (and how quickly can I get) a Part 135 certificate?" My first bit of advice is: "Not so fast, shipmate."

I wish there was a simple, easy, and efficient answer. But, there is not. The FAA approval process is slow, tedious, and deliberate. It is hampered by a federal agency with many Flight Standards District Offices (FSDOs) that are underfunded and undermanned. The process has been further bogged down and negatively impacted by significant oversight by the FAA on Part 135 and charter operators that has resulted in some controversial decisions including the revocation of some operator's certificates. The most controversial of those was the revocation of the certificate of AMI Jet Charter, Inc. in October of last year and subsequent $10 million settlement agreement with TAG Aviation.

The FAA's focus is rightly placed on that of the safety of the traveling public. That is good. But, the Agency and Washington (who funds the Agency) have been slow to react to the demand for pending and future Part 135 operators. There are surely more pressing issues for the FAA such as JFK airport congestion and addressing the alarming rate of runway incursions. At the same time, at some FSDOs, there is a 2-3 year wait from filing the Preapplication Statement of Intent (PASI) until the FSDO can even start processing the application. Other FSDOs have responded to inquiries stating that they just are not processing new Part 135 applications at all right now.

However, all is not without hope. There are several options, but there are no magic answers. The first option is pursuing the formal application process from start for a new certificate. Next, you can consider purchasing an existing Part 135 operation. Finally, you can perhaps structure an operational agreement with an existing Part 135 operator as long as that other entity maintains clear "operational control." Needless to say, any of these options will take a lot of time. It also depends in large part on the geographic area of proposed operations and the applicable FSDO. Regardless of how you proceed, here are some practical suggestions:

Be proactive – In addition to sending in your PASI, schedule a meeting with your local FSDO to understand the process and get to know the personalities with whom you will be dealing. Check their website for any specific guidance. Ask questions. Listen. Follow up. Be diligent.

Be professional – Retain a team of experienced aviation professionals and trusted advisers to help you. You don’t need an army. But, you do need people who have credibility. For instance, a former FAA employee never hurts or a senior pilot with a proven history of professionalism. In appearance, demeanor, and your document submissions, look sharp. As a federal judicial law clerk many years ago, I learned very quickly that sloppy briefings filed with the court spoke very loudly. Such inattention to detail allowed the court to form an opinion about the lawyers long before they entered the courtroom and uttered a word in oral argument. Substance matters, but so does appearance.

Be prepared – Read and study the FAA certification materials, documents and guidance on the FAA website including Advisory Circular 120-49. Look also at Part 135 industry guidance like that on the NBAA website. Talk to others who have been successful. Even if there is a delay before you can submit manuals and materials to the FAA for the formal approval phase, start working on your manuals with your leadership team. Be prepared for every meeting with the FAA. Perhaps someone else will not be, and the FAA will start focusing its limited resources on your application instead.

Be polite – I can't overemphasize the importance of being polite in your dealings with the FSDO. By establishing a relationship of courteous interaction, you will be building the foundation and reputation that will last well beyond your certification. You will be creating your operation's identity and personality. In some of my most hotly contested enforcement proceedings defending major air carriers against the FAA for millions of dollars of proposed civil penalties and involving significant allegations of wrongdoing, being a strong advocate and a polite professional generated the best results for my client. Say "thank you." You don't have to be abrupt, impatient, rude or threatening to be a good advocate, especially when you are standing at the doorstep of a federal agency with your hands out.

Be patient - Look carefully at all your options. Perhaps pursue several at the same time until there is forward momentum on one. Realize from the start, there is not a turn-key manner to get a certificate. The scrutiny will be intense. The investment of time will be significant. The reward will be well deserved.

In summary, none of this advice is new or rocket science. It is just worth repeating. In fact, after initally drafting this post, I ran a Google search for "FSDO part 135 guidance" hoping to find a link to a local FSDO. Instead, the top search result was a great article from October 2006 on the NBAA website by Dave Hewitt entitled "Managing and Enhancing Your FSDO Relationship, Or 'How to Stop Worrying and Love the Feds.'" Mr. Hewitt, the Vice President Safety & Compliance at NetJets, has a strikingly similar Top 10 list on dealing with the FSDO. It's clear to me from reading his list that Mr. Hewitt and I have had similar interaction experiences with the FAA.

Next week, I will be leading a panel discussion with some operators and hopeful operators about these certification process options at the International Air Taxi Conference on January 26. The event will include a wealth of attendees who have "been there, done that." If you're interested in the process, this will be a great venue to network with others and get some practical advice.

You will notice that several of the newest air taxi companies like ImagineAir have posted copies of their single page certificates on their websites. They are proud of those certificates. They should be!

Read more!