There Are Glimmers Of Hope In This Air Taxi Thing

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It would be too easy to take shots based on the events that led up to Tuesday's announcement that DayJet was scaling back rather than turning into the aviation supernova that some had predicted. It's probably worth noting that I can't ever remember DayJet saying they were going to set the aviation world on its ear. All I remember is them saying they thought this air taxi thing with a cheap little jet might work. And it still might.

If you've been following the whole Eclipse blog court thing, you may have reached some conclusions that I might agree with about how it all came about. Now the word is out about DayJet's decision to take a deep breath, try to stay in business and maybe eventually make a little money by offering business people, government officials and the somewhat well-heeled a chance to get from place to place, quickly and relatively affordably (and it is relative) without ever taking their shoes off.

The fact is that few things in life turn out exactly as you plan and if your margins for error are too slim then the wheels will come off the cart.

Based on my conversation with DayJet founder Ed Iacobucci on Tuesday, if anyone has a chance to make this work it's DayJet. And, rather than focus on the kind of ridiculous behavior that has swirled around this in recent weeks, the aviation community should set aside the barbs, give this concept some breathing space and reserve the "I told you so's" for those who deserve them, when they deserve them.

I've talked to dozens, if not hundreds of people in Iacobucci's position. Being the bearer of bad news is never easy but it's better when you think the story isn't finished. That's what Iacobucci believes and if we give him half a chance, he may prove himself right.

Out of my interview I gleaned some nuggets of hope:

  • First, the airplane is basically OK. Regardless of your opinion of the company, the product, though unfinished, seems to be able to handle the task DayJet put it to. Granted, it's only been six months and the plane has some add-ons to make it serviceable but it starts, runs, flies and does it all over again with reasonable reliability. It'll be even better when it's done, according to Iacobucci.
  • People seem to like it. Iacobucci said clients were surprised at how comfortable it is and delighted with how quiet it is. On the short hops it will be doing, you can put up with almost anything but it's nice to be comfortable when you're paying $1,400 for a flight that takes little more than an hour (even though it might be saving you a full day).
  • There is a business there. Iacobucci signed up 1,500 members, more than 500 actually flew and 50 flew more than 10 times. Whether it can survive fuel prices, the vagaries of the economy and the inevitable attack from the airlines if it gets too successful are questions that will be answered as the company progresses.

And I hope it does keep going because general aviation needs the kind of bold thinking that's behind this. Why? Because we're losing our luster. Pilot training is suffering, boomer pilots are dropping out and there's little to prime the pump to incite the excitement that has always sustained aviation.

Rather than smugly dismissing the idea as a failure, we should all be hoping that Ed and his crew find a way to make it work.

Comments (23)

Isd Bruce Holms working for Day Jet? He'll make it work, I have lots of confidence in him.

Dan Colburn w6dc@cox.net

Posted by: Daniel Colburn | May 7, 2008 2:17 AM    Report this comment

I totally agree with Russ.But Day Jet should do a better job of getting the word out.They've got a good thing going on,but what's the point if people don't know about it?

Posted by: Sean Woods | May 7, 2008 5:20 AM    Report this comment

It is tough to "beta release" something like this. As such, their successes and failures are out there for the world to see (and comment upon).

I, too, think it is a good idea with a lot of merit and potential. I'd like to see the Upper Midwest as the next point of expansion. Lots of short-hop potential with already high biz class fares.

Posted by: Jim Hausch | May 7, 2008 8:27 AM    Report this comment

Did DayJet not get the marketing out, or does partially price sensitive, partially time sensitive require a prop?

Posted by: Dan Sleezer | May 7, 2008 9:40 AM    Report this comment

Eclipse has always said that its ability to offer a "low" price is based on volume. If there is no really high volume customer so Eclipse needs, say, $2.5 million per airplane to stay in business then is there or will there be an airplane at an acceptable price for Ed to say in business and flourish? That seems like the question. If Ed can stay in business with 12 airplanes bought really cheaply (around $1 million??) then that's great, but to expand he may need to spend more per airplane and hence charge more.

Posted by: Unknown | May 7, 2008 9:47 AM    Report this comment

Whether of not Dayjet will make it or not is still a question mark. The bigger question is how can you fully utilize an aircraft that with 4 passengers on board, barely has a 200nm range with the required IFR fuel reserve required by the FAA? The Dayjet concept sounds OK, but until you can fly a full airplane when it gets below a 2,000 foot broken or overcast sky, I see the practicality a problem. That's unless the FAA wants to bend the rules and allow Dayjet to not have to carry anything more than the standard 45 minutes to their first destination no matter what the weather forecast. The fact that the FAA is still dragging their feet on proposing new visibility requirements for Enhanced Visual System (EVS) equipped aircraft, it is doubtful the FAA will bend on the IFR reserve fuel requirements to help Dayjet better utilize their aircraft.

Posted by: Kim Barnes | May 7, 2008 12:44 PM    Report this comment

Why blame the economy, or the plane..?

When itís the basic model. With expensive assets, and expensive employees DayJet is a mini airline. Except they only have 3 seats to fill. Each empty seat means a 33% evaporation of revenue.

The service is needed. Very frequent travelers are fed-up with the services of the airlines. Compared to private-jet, airlines waste about a month of time a year. Waiting at the airport is often longer than actual flight time.

The key to really making money in this new market is to offer, and then deliver a point-to-point, on demand, alternative to the airlines that is comparable, price-wise, to legacy 1st class fares.

The market potential is believed to be more than $21 billion annually...A nice niche to crack.

The prize will go to the first company that serves up: private jet @ airline price.

Steve Jobs did it. So did Henry Ford, Fred Smith, and, Bill Gates. They all democratized an elite product.

Buddy Duke Las Vegas.

Posted by: bob boobo | May 7, 2008 5:48 PM    Report this comment

Buddy Duke, Your post is on point. It's a good idea using the wrong airplane. The VLJ concept was never about "Passenger Transport Utilization." It WAS however about being able to fly a jet around on Sundays with a relatively low operating cost. You want to really make the Dayjet concept work? Sell the Eclipse Jets and buy a few PC-12's with upgraded interiors. Now that's utilization! But then again, the people who think they know it all say that passengers won't fly in anything with a propeller. Fine. You're back to square one. Flying empty airplanes where you want to go or full airplanes with an absurd,almost ridiculous short range. I'm not in the airplane bashing business. I'm in the reality business. Empty seats means no Bucks. No Bucks means no Buck Rogers.

Posted by: Kim Barnes | May 7, 2008 6:43 PM    Report this comment

Imagine if the airlines needed 40% of capacity for crew! Also imagine if they could book only in 33% blocks and nothing in between.

On demand air taxi is the WRONG model for the Eclipse.The Ecslipse would be a HUGE success in a NetJets model. The average NetJets load is 2.5 passengers per flight. even though their capacity ranges from six to 15 seats.

The buy-in and monthly fee for an Eclipse would be very low in comparison to what NetJets offers now. Adding VLJs to the NetJets model will bring private jet transport down another level on the net worth ladder. Thousands of small companies could justify a fractional Eclipse.

A fractional operation shifts the capital burden from(DayJet's current problem) to its customers. Also, the operator gets a fixed monthly income for each plane, whether it flies or not, further spreading the burden, And they could offer the equivalent of the NetJets "Marquis Card," which brings jet air transport down another level.

I'm not "smugly dismissing" the current DayJets model. I am, however, based on extensive research, saying that it will never work on a large, long-term scale.

But I would love to run a NetJets type business that operated VLJs. I believe it would exciting and profitable.

Posted by: Ron Wagner | May 8, 2008 10:53 AM    Report this comment

Ron, it's hard to argue with you. I believe you are correct. A fractional ownership program for this aircraft is spot on. However, you still have a range problem with anything over 2 light weight people with no bags (including the pilot) I suppose some people wouldn't mind two fuel stops from say Denver to Chicago. But it is my experience that would be a deal breaker with 95% of anyone I have ever chartered. people just will not tolerate having to land for fuel every 45 minutes (unless their destination is 45 minutes away) in that case, you're Golden!

Posted by: Kim Barnes | May 8, 2008 11:17 AM    Report this comment

Kim,

You're right about the short range, but that is not a "problem," per se. It is simply an economic choice. There will be plenty of small companies for which the short range and small number of seats of an Eclipse will work fine. But there are other VLJs coming out that will have longer range and more seats. The Diamond D-Jet should be especially well suited for the service I envision.

Plus, if the customer is an owner, then you can go to a single-pilot operation, increasing the load and range and reducing costs.

If the range and capability of a fractional VLJ doesn't work, then get a Citation from NetJets. It's just simple economics. But right now, no one in the U.S. has the option of a VLJ fractional. A D-Jet fractional company is starting up in Europe.

Posted by: Ron Wagner | May 8, 2008 4:30 PM    Report this comment

Ron, I think we both agree. The Eclipse is the wrong aircraft for a FAR Part 135 Air Taxi, no question. You are correct that the Eclipse, although still not ideal, is much better suited for a Fractional Ownership Program. Good Observation.

Posted by: Kim Barnes | May 8, 2008 5:11 PM    Report this comment

That little thing has a 200nm range??? What a crock! Why spend 2.5 mil to fly across the state and have to top it off before going to the next state? Both companies are doomed.

Posted by: Clint Tolbert | May 9, 2008 10:24 PM    Report this comment

Clint, the aircraft puports a 1125 NM range. HOWEVER, that is with just ONE or TWO light weight people in the airplane! Every pound of person and bags you put in the aircraft, you have to take that much fuel off. The deal breaker comes with the clouds. When your destination forcast weather is below 2,000 foot ceilings and 3 miles visibilty, you need an alternate airport. That means by FAA regulation you need to add enough fuel to fly to your original destination, THEN be able to fly to your alternate airport THEN fly another 45 minutes after that at normal cruise power. As you can see, you don't have a lot of range to work with at FULL TANKS! You start having to keep all that fuel in the wings because of IFR reserves, and well, you won't be flying any passengers that day. It is that limitation alone that makes this an unworthy venture. It has nothing to do with "bashing" Eclipse. I think that little jet is cute as hell. I would love to own one to putt around in on Sunday's. It's just not a charter aircraft.

Posted by: Kim Barnes | May 9, 2008 11:16 PM    Report this comment

Actually I'm not bashing Eclipse. I think its a decent looking airplane. However, a turbine powered airplane that can't carry more than 2 people more than 200NM is pathetic no matter who makes it. I fly 121 so I'm very familiar with alt. requirements I just can't believe they would design an airplane so limited in payload and expect it to be successful?!?

Posted by: Clint Tolbert | May 10, 2008 10:06 PM    Report this comment

Clint, I wasn't implying you were bashing Eclipse, quite on the contrary. The public forums are implying that anyone that "dare" criticize the shortcomings of the design of the Eclipse are "bashing" it. Like yourself, I too use to fly 121. I am now a BBJ Captain based out of CA. You and I both know the importance of adequate range and payload. It wasn't even a thought in the design of this aircraft, because in Eclipse's defense, it was never intended to be flown for commercial purposes. The subject is really Dayjet. I can't believe nobody stopped and said "Good Idea, but wrong airplane" long before they blew through everybody's money on the way to realizing "it's the wrong airplane" for the apparent reason you picked right up on.

Posted by: Kim Barnes | May 10, 2008 10:56 PM    Report this comment

Ron, Would you please get in touch with me directly at JohnWOwen@hotmail.com ? Thanks, John

Posted by: John Owen | May 11, 2008 10:31 PM    Report this comment

"good idea, wrong airplane". . .The lure for DayJet re: Eclipse was the operating costs, no? What is the right airplane (assuming a key part of the business model is the on-par pricing with the walk-up full-fare ticket.

Posted by: Jim Hausch | May 12, 2008 7:48 AM    Report this comment

Well, you tell me Jim. Dayjet has shown a single paying passenger paying comparable first class airfare doesn't cover the basic DOC of the aircraft and operational costs, and two people barely does on both counts. If it did, we wouldn't be here talking about why Dayjet just laid off half it's work force. The solution is clear from a business standpoint. Increase the price dramatically over what a current airline first class ticket cost per person, or establish a traditional pricing structure for the entire aircraft. I think the numbers speak for themselves. Right now, there isn't a viable jet like this that you can occupy every seat AND top it off for max range ( as you know, very few aircraft under 12,500 lbs TO weight can do this anyway ) So? What aircraft? If Dayjet's theory about passengers wanting to fly only turbojet aircraft is true ( and I partially agree it is ) then the alternative is slim to none. However, there are smaller type Turbo-Props available i.e. Piper Meridian, TBM 850, PC-12 that have as much if not considerable more range, cabin space and payload capability to satisfy the Dayjet business model at less than the DOC of the Eclipse. And since 1998, these single engine aircraft can operate full IFR on FAR Part 135. Until they start building a six seat jet that can actually carry 6 people further than the next county, this concept is going to keep having financial problems. What's your take Jim?

Posted by: Kim Barnes | May 12, 2008 11:41 AM    Report this comment

Kim, just to make sure, do you think you know me? My dad and I share the same name and he is officially in the business-aviation business. I am a PP-SEL who flys for fun. I say this because you asked for my take on this and my "take" is decidedly less informed than someone in the business.

Now, disclaimers behind us, here is my take: if you can beat the DOC of the Eclipse with a PC-12 I wonder why this DayJet theory was not tried earlier? Is it the fear of single engine ops? Is it a prohibition of SE ops by the potential clientel's insurers?

I grant there will be a period where occupancy is building, but I'd think they'd need a pricing structure which would make business-sense with 50% of the seats filled.

Posted by: Jim Hausch | May 12, 2008 11:59 AM    Report this comment

I still believe that technical limiations of the Eclipse aircraft is obscuring in this thread the fundamental economic problem. We can debate single-engine, we can debate turbo-props... but none of this addresses the core problem that the Day Jet air taxi model won't work.

If you need convincing, imagine this: Imagine going to investment groups to propose raising money to buy NetJets, then buy back all of their jets, and then run an air taxi service with those planes, serving the very same loyal customers that they now serve.

The investors would laugh. Why? Because even though NetJets is practically a household name, they have an extensive scheduling system, all the trained pilots they need, all the planes, all of the infrastructure is already in place, there is no reason for ONE group of investors to tie up capital in a fleet of jets that will serve ONLY on demand.

With on-demand air taxi, there is no guarantee that anyone will ever call, and you have to spend a lot on marketing to get them to call and keep them calling. If the economy turns down, you still own all those jets!

But with the current fractional models, of which NetJets is the largest, once a customer buys in, you never again worry about whether or not they'll call. Believe me, they will call. After all, you're taking care of their asset for them!

Posted by: Ron Wagner | May 12, 2008 12:31 PM    Report this comment

Ron, again, you are 100% correct. You're coming at it from an exclusive financial point, whereas I have been expounding more on the aircraft limitations ( that leads back to your point ) The reason a company like Netjets makes it, while On-Demand operators don't, is the maintenance fee customers pay each month whether they fly or not! Signing people up to fly in a Dayjet aircraft at airline prices should be, and is, pathetically easy. Making a profit without an aircraft "buy-in", monthly service fee or other enforceable "customer guarantee" contract is well, what it is. A financially ailing basic FAR Part 135 On-Demand operation called Dayjet using a less than optimal aircraft. I agree, put an affordable Fractional twist in the Dayjet business model and it has a chance. I think we've clubbed this horse to death don't you?

Posted by: Kim Barnes | May 12, 2008 2:30 PM    Report this comment

Kim,

Yes, we have. But the Day Jet management hasn't. And then there's Pogo. Does anyone know how Pogo is doing at raising capital to buy planes?

Posted by: Ron Wagner | May 12, 2008 4:07 PM    Report this comment

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