The Need for Sustainable Business Models (Lower Fuel Costs)

There is a good article in yesterday's New York Times discussing a number of US operators entitled "Air Taxis Fly Into Financial Turbulence." It includes a discussion on Dayjet's recent inability to secure another round of financing and its need for market expansion to obtain a critical mass for continued future operations. The most interesting part of the article confirmed that need for additional funding for DayJet's sustainability:

Can DayJet make it without expanding to that critical mass? '"Absolutely not," Mr. Iacobucci conceded. He said he nevertheless believed that critical investment would materialize as it became more clear that air taxis were practical and would become more so in the future. "For us, it’s all a matter of timing," he said.

However, the article also discusses current operators SATSAir and Linear Air who are both expanding their services. Joe Leader, the President of the Air Taxi Association (of which I serve as General Counsel), is mentioned and quoted throughout the article in addition to article providing a link to the Association's website.

Speaking of trade associations, the Air Transport Association ("ATA") represents almost all of the major Part 121 air carriers. It is a well run organization with significant influence in DC. While in Washington last week, I had lunch with one of its senior executives and a long time friend. The ATA sends out a great, free daily email news update ("SmartBrief") with summary descriptions and links to aviation news primarily focusing on its air carriers. Yesterday's ATA SmartBrief included a mention to the Times air taxi article. The Times article closes with a recognition by Joe Leader that the current Part 121 major airline market is cutting service and leaving some markets all together thereby presenting an opportunity for the air taxis to provide services to these areas.

Also on yesterday's ATA SmartBrief was a link to a Business Travel News Online article discussing a recent speech by William Ris, the Senior Vice President of Government Affairs at American Airlines. Mr. Ris is a fellow attorney and a very well respected spokesperson for American Airlines who is resident in DC. According to that article, "American Airlines is losing $3 million per day under the current fuel prices and the industry should expect further capacity cuts and the introduction of new airline revenue streams as fuel is now the carrier's largest expense." Likening the rising fuel prices to a tidal wave, here is what Ris said:

"We are not in a perfect storm," Ris said. "That's where all the storms come from different directions at once. We are used to a lot of headwinds in our business. We are not in a perfect storm. We're in a tidal wave coming from one direction and that's the price of fuel."

. . . . .

"For every $100 dollars of revenue that an airline takes, right off the top $20 or $25 go to taxes and fees," Ris said. "Now with the fuel prices, $40 goes just to fill up the tank. That leaves just 40 more dollars to buy airplanes, maintain the fleet, pay our people, fund pensions and healthcare, pay rent and a variety of other expenses. That is not a sustainable business model."

I have said it repeatedly, the fuel prices and tightening capital markets are hurting everyone in the aviation business. It's not just air taxis that are adversely impacted. Unfortunately, it appears it will get worse before it gets better with no end in sight to the soaring fuel prices. Let's hope the air taxis and the air carriers get some relief as both provide important services to our national economy and can work to compliment each other by increasing air travel options.

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SATSair's Continued Success and Growth

I have -- since I flew my first flight on SATSair -- been a significant proponent of the company. Serving primarily the Southeast and based in my home state of South Carolina, SATSair has just released a press release of some rather impressive numbers for 2007 and the first quarter of this year. I attribute that success to a number of factors: reliability, excellent customer service, a fleet of Cirrus aircraft, a simple "air cab" pricing model, and a geographic reach in the weather-favorable Southeast. Ironically, while today's headline article entitled "Rising Costs Reshaping Air Travel Across the USA" in USA Today lamented the probable decrease in availability of commercial flights,especially to smaller airports, and noted how fuel prices continue to add to the commercial air travel woes, the SATSAir press release states they are actually seeing more use as a replacement of traditional hub and spoke service. Here are some quotes and highlights from the press release:

• "SATSair experienced more than 60% growth in the number of flights from 2006 to 2007."


• The air cab operation flew more than 16,000 flights and landed in 27 states in 2007.


• SATSair ended the year with over six million passenger miles flown since the company's inception in November 2004.


• The most noteworthy year-to-year growth took place in Florida, which saw a 314% increase in flights over 2006.


• Though Florida showed the most notable growth, every state SATSair flew to in 2007 saw an increase in flights from the previous year, including considerable growth in the company's core six-state region.


• SATSair's headquarters is located in South Carolina which had an average of 3 flights per day into all the major economic centers such as: Greenville, Anderson, Spartanburg, Charleston, Beaufort, Hilton Head, Columbia, and Myrtle Beach.


• Just as importantly, of 60 public use airports in South Carolina, SATSair landed in 47 of them, providing the start of an effective South Carolina Intrastate Air Network.


• Traditionally, the use of the air cab service has been a remedy for driving trips of 2-5 hours, not a replacement for other forms of air travel. However, 2007 saw a shift with a significant number of new SATSair customers using the point-to-point air cab operation as a solution to their hub-and-spoke airline frustrations and woes, in fact decreasing the door to door travel times.


• Nearly 90% of the company's business for 2007 was in a six-state region, comprised of Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia.


• SATSair currently serves more than 600 airports throughout the Southeast.


• SATSair's mission is to provide safe, convenient, economical air travel and top-notch customer service.

This is an incredibly tough time for anyone in the aviation business. However, SATSair's success is an affirmation of a simple business precept that if you reliably provide a quality product, you will grow and experience repeat business. It also is an affirmation that the SATSair air taxi - or "air cab" model as CEO Steve Hanvey insists it be called -- is growing at rather significant rates while the traditional air carriers are likely merging, consolidating and shrinking.

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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.

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Florida:Next Gen's Testbed & ADS-B Update

At the 33rd Annual FAA 2008 Forecast Conference in Washington DC today, it was very positive that both Acting Administrator Sturgell and DOT Secretary Peters continued to discuss the mandate and urgent need for implementation of NextGen and ADS-B. This type of support and advocacy from the top of the DOT and FAA will be critical because it is clear from many of the comments filed in response to the ADS-B NPRM, that the proposed change is not welcome by many. At the Conference, Secretary Peters announced the following about NextGen:

"And I am announcing today that we have selected Florida as the test-bed for this transformational technology. The Southeast has a good mix of traffic and a good mix of weather – just the kind of place to put NextGen through the paces . . . . By putting the latest technology in our towers instead of the state’s theme parks, we’re going to make getting to and from Florida a model for the future. Starting this summer, we are going to roll out NextGen technology at Daytona Beach. In Miami, we will be employing a descent technique that saves fuel, noise, and emissions. The national debut of ADS-B technology – the backbone of NextGen – also will begin in Florida. Adding ADS-B coverage in the Gulf will allow planes to fly closer together without compromising safety. Today, we have to keep the planes far apart – anywhere from 10 to 15 miles. But with ADS-B, we can reduce that down to 5 miles, freeing up capacity."

I have previously discussed Florida as one of the states leading the way, so Secretary Peters' announcement is consistent with Florida's support of aviation innovation. Based on public comments and filings in the official FAA Docket, the FAA, the DOT, GAMA, the NTSB, Dayjet, Linear Air and SATSAir all are generally supportive and in favor of ADS-B. In fact, Dayjet and the NTSB urged the FAA to also consider the implementation of "ADS-B In" technology which would provide the cockpit with a multitude of information.

At the Forecast Conference, Secretary Peters today further stated: "We know the passengers are coming – over 1 billion by 2016. We know that, by 2025, revenue passenger miles are expected to more than double, increasing by an average of 50 billion a year. That is the equivalent of adding a carrier the size of Northwest to the system every 18 months."

Based on the large number of comments filed on the docket opposed to ADS-B, it will take some vision, insight, and fortitude to continue to move forward with its timely development and successful implementation. To sit idly by and not move forward or acknowledge the advantages of ADS-B in light of those staggering numbers would not be prudent. Air taxi operators, many of whom have leveraged the advantages of computer technology and software, surely understand that. At last year's FAA Forecast Conference, the air taxi industry was well represented by SATSAir's Steve Hanvey being a panelist. It's good to see that Dayjet's Malcolm Murphy is likewise scheduled to be a panelist tomorrow morning at the Conference. More on the FAA's 2008 air taxi forecasts soon.

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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.

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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.

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International Air Taxi Convention

The first day at the International Air Taxi Convention was full of information on this "disruptive and emerging" industry. Leading operators and manufacturers from the US and Europe were present with over 150 registered attendees. There were presentations from ETIRC, Eclipse, DayJet, SATSAir, Blink (London) and Bikkair (The Netherlands). Today, some of the most useful industry information came from the "up and running" domestic US operators, and there was also a good update by Eclipse. Here is what was put out by Ed Iacobucci of DayJet and Steve Hanvey of SATSAir.

DayJet Update

DayJet officially launched in Oct of 2007 with 650 paid memberships and 250 company members. The biggest challenge has been managing the operational planning of a highly dynamic and flexible flight schedule in that "human beings" are not injected into the software-driven scheduling equation until about 40-45 minutes before an aircraft's takeoff. They have achieved over 95% on-time performance (within 30 minutes of what the customer negotiated when tickets were purchased). Today, there were 37 revenue flights and 52 total flights including their training flights. All flights are tracked in real time by DayJet and Ed actually did so during his presentation.

They are currently operating 45 DayStops and 7 DayPorts. They are adding about 50 new members a week with approximately 392 existing corporate contracts. Their sales strategy consciously focuses on a client base within 25 miles of a DayPort. Customer feedback is that they are "very pleased" on what DayJet is doing. Customers have also stated that the aircraft is "bigger, quieter, and easier" than they thought it would be. There is never a change of planes, but there might be an intermediate stop based on the window of time for desired travel provided by the passenger. So far, frequent users are attorneys, lobbyists, professional services groups, engineers, and mid level site managers for developers. They modeled for 1.3 to 1.2 passengers per revenue flight and are running a "little under 1.2" right now.

If you want to see DayJet flights in action, the Flight Aware website is a great real time tracking website.

SATSAir Update

Many people including some customers, the media, and investors still do not understand the air cab market. SATSAir has been operating now for 3 years. Providing reliable and outstanding customer service remains very important with delivery of a true customer "value proposition." They will fly into over 500 different airfields this year with less than 5% being major hubs. They are currently operating 26 airplanes and their studies project at least 1000 air taxi aircraft could operate in the southeast area of operations.

More than 50% of their clients are coming "out of cars" or a typical 3-4 hour car trip with only about 20% previously using air charter services. Passengers pay on average $500 per hour. Their flight profiles started with about 99% being business trips and now have evolved to about 85% business trips with the rest being discretionary, pleasure-related travel including college sports games, blind dates, and the Super Bowl. The average flight is 1.5 hours and they will fly about 1500 passengers per month.

Eclipse Update

Eclipse expects its full Part 142 FAA certification within days/weeks. As such, pilots will be able to receive complete Eclipse aircraft training in ground school and full motion simulators. By April, they expect to have 3 certified full motion simulators. Current service centers are located at Gainesville, FL, and Albuquerque, NM. Future service centers will be located in Albany, NY and Van Nuys, CA. The ETIRC partnership results in full service and support implementation for European and Eastern European customers. The ETIRC partnership does not move any aircraft production out of New Mexico (they have reassured politicians of that) where there are 1600 employees and plans to hire 700 more this year. The partnership simply provides a platform for international acceleration and delivery of the product. They have a 2600+ order backlog and 444,000 square feet of facilities. They have delivered more than 100 aircraft to date. The focus this year centers primarily on volume production.

So far, a lot of good information and networking and a shared vision -- and execution -- that is indeed global. On the lighter side, Bikkair showed a very entertaining, humorous and effective marketing animation video that has just been posted on their new website. It captures the concept of the benefits of air taxi travel for the business industry.

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DayJet on NPR and My First Air Taxi Experience

Today, DayJet was featured in a great story on "All Things Considered" on National Public Radio. I found the four minute show a great primer on air taxi operations, in particular DayJet and Ed Iacobucci. Like the other visionary air taxi industry leaders, Ed is a true believer and has spent millions of dollars and five years developing the product. Just last week, I was elated to learn that DayJet is now flying into South Carolina, including Charleston.

The NPR commentary includes the usual industry analyst skepticism, and perhaps I am overly optimistic. But, like Ed, the first time I took an air taxi flight, I became an instant believer. I know many others now feel the same. Ed's comments on NPR today reminded me of that first flight and why an air taxi makes so much sense to a business traveler. Here's the story I have shared with many others:

In the summer of 2006, my first flight was on SATSAir in a Cirrus from my hometown of Mount Pleasant, South Carolina to Greenville, South Carolina. Traditional airline travel for that one day trip and route was out of the question in terms of cost and the inefficiency of hub and spoke connections. I had to go to Greenville for a day trip and a meeting involving an all-day mediation of a case that I was working on. In the past, I would have gotten up at 4am to get on the road by 5am for the 220 mile, 4 hour interstate drive hoping not to spill my Starbucks coffee along the way. I would not have had time for my usual morning routine which includes reading the local paper and the Wall Street Journal. I also would have had to prepare for the mediation the day before. Assuming no accidents or traffic on the interstate, leaving at 5am would get me to Greenville by 9am for the mediation to commence by 930. At day's end, I would have opted to drive back around 5pm getting home at 9 or 10pm with some departure traffic, enjoying a fast food, drive-thru meal en route. Worst case, if the client wanted to meet early in the morning before the mediation and the mediation lasted too late, this easily could have turned into a three day evolution with two nights in the hotel.

In terms of dollar costs and hard expenses, that's a few meals, two tanks of gas and perhaps one to two nights in a hotel room (maybe $400.) In terms of professional and personal costs and value of my time, that's a long 8 hours on the road. Since my retention agreement with the client provided billing for travel time, that's easily over $2200 in billable time. Regardless, that routine makes for an exhaustive day. Pulling it off in one day results in another "dark to dark" day when I don't see my family and children in an already overly-traveled life.

In comparison to the traditional routine of vehicular travel, the air taxi experience was unbelievable. I woke up around 530am, read the newspapers, got my Starbucks and arrived at the sleepy Mount Pleasant Regional Airport (no hassle parking), a few miles from my home at 645. By 650am, I heard the overhead buzz of the Cirrus as it circled the field for landing. I walked out of the FBO to the aircraft and met the pilot. Within 10 minutes of his landing, we were airborne arriving at the Greenville Downtown Airport a little after 8am. There, a rental car was waiting for me, pre-arranged by SATSAir. The ride in the front seat was smooth, comfortable and fun. While I opted to chat with the pilot en route, I was free to listen to the available satellite radio, to review file materials or to just sleep.

I was at the mediation location in 15 minutes after landing and ready to go by 830am. I had an hour to collect my thoughts and prepare for the mediation. Fortunately, we settled the case and I was back at the Greenville airport by 430pm. Ironically, the impending aircraft departure time had the added benefit of actually pressuring the parties to reach closure. Plane and professional pilot ready and waiting, we were airborne by 445pm. Enjoying a good tail wind, we landed around 530 pm and I was at my house by 545pm in time for dinner with my family.

How much did air travel cost? Utilizing a traditional mindset focusing solely on the dollars and cents, it was not inexpensive (good lawyer double negative). It was about $500 per hour from engine start to engine shutdown for a total of a little over $1000. The rental car was about $30. The trip was worth every penny and at the end of the day, an overall costs savings that made it more economical to the client!

The success of the air taxi model requires a more practical analysis of the intrinsic "time value of time," a focus on one's quality of life, and an acknowledgement of opportunity cost savings. I was able to convince the client to pay for the ticket because it was cheaper than paying for 8 hours of billable travel time, hotel rooms, meals and gas. As a further incentive to the client, I offered not to charge for the travel time in the aircraft. I was home not nearly as exhausted as I would have been after driving. Instead, I got a good night's rest at my home, in my own bed. Most importantly, I was able to tell my children "good night."

For business travel, air taxis surely make sense. I acknowledge that the economic model is not for everyone and not for every trip. (I will discuss the various methods and models the existing air taxi services use to charge for travel in a future post.) But for many, if you focus on the value of your time and your quality of life in a fast-paced business world, it is a great new life-altering choice. A new alternative. That flight, on hot summer day in 2006, was an eye opener for me. It all made sense.

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Air Taxi Entreprenuer

Having been following the air taxi visionaries for the past several years, I wanted to congratulate one of the true entrepreneurs, Steve Hanvey. A fellow South Carolinian and Marine Corps veteran, Steve as the President and CEO of SATSAir has been recently recognized by two of the most prestigious aviation industry awards. He has received the 2007 Business & Commercial Aviation Vision Award and has been nominated for the Aviation Week Laureate Award. If you have ever talked to Steve, you will quickly learn he is a passionate and energetic believer in the future of his company and the air cab model. He is also extremely generous in his advice to others who are aspiring to follow in his footsteps.

By fall 2007, SATSAir had completed an unprecedented 5 million passenger miles and 25,000 passenger flight hours in three years in operation with its growing fleet of 26 Cirrus aircraft. I have to disclose that I have had the honor of working for Steve, and my partners and I have utilized his services dashing across the Southeast. One thing is certain: Steve and his cadre of employees have achieved success the old fashioned way - excellent customer service, dependability, reliability, hard work and attention to detail. As we say in the Navy, Steve has been at the "Tip of the Spear" in this emerging industry. It's great to see the well-deserved recognition. Semper Fi, Steve and congratulations!

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The Year of the Air Taxi

This will be the "Year of the Air Taxi." I am confident that 2008 will be an exciting year for air taxi development and operations. Last year, we saw the emergence and success of several air taxi companies including SATSair, Linear Air, ImagineAir and Dayjet - all ironically up and flying on the East Coast. Even more exciting, the newly formed Air Taxi Association grew exponentially -- not only domestically, but also internationally.

This year there are a multitude of new Part 135 operators forthcoming in addition to several new aircraft being certified by the FAA and entering full scale production. In the meantime, the Cirrus SR-22 has already proven to be a reliable air taxi platform for SATSair and ImagineAir and the end of 2007 saw the Eclipse 500 emerge as an operational air taxi platform for Dayjet.

The year starts off with a bang: The first International Air Taxi Convention to be held in Fort Lauderdale, Florida from January 23rd-25th. This three day forum will bring together operators and manufacturers from the domestic and international markets. Historically, it appears to be the largest convention focusing solely on international air taxi operations. As General Counsel of the Air Taxi Association, I am excited to be a part of the Convention chairing the third day which will focus on some interesting legal and operational issues.

Regardless, I will join a multitude of folks there who are firm believers that the further emergence of viable air taxi options this year will in fact revolutionize air travel and more so - automobile travel - making 2008 The Year of the Air Taxi.

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