Thanks to Google’s news feature I can push air taxi news to the top of my queue everyday and read funny tidbits like this. While no one is as crazy as I am about air taxi (I am going to back to air taxi school for F-’s sake!) the reality is that most of what the press seems to be harvesting is misleading to the ultimate end user.
The amazing thing is that investors are actually buying into the whole scheme. Investing in infrastructure to support manufacturing a toy is one thing. (Yes, the VLJs.) Whether the manufacturing and sales of those units makes sense is more the domain of Mr. Aboulafia. Building an industry (that does not yet exist) around a broken culture of air charter that does not yet make money on its own is quite another that I can blab about with some authority.
Ask any seasoned aircraft operator / manager where they make their money. They’ll tell you that they set the expectations of their owners properly, will do what they can to generate revenue to offset the cost of ownership, but rarely (if ever) will an owner walk away from ownership thinking what a great return on investment they obtained if analyzed strictly as a financial decision. That is the situation of more than 80% of the present day air charter aircraft.
It isn’t with the operations of the charter dept. And if it is, they are flying close to 1000 hours on each aircraft (like NetJets) but even then they can still lose money. Buckets. (See Mr. Buffett’s last annual report.)
So, why the Thursday AM rant for the 57th time about Air Taxi Craziness? Because my partner has taught me that screaming the same message over and over again when people are not listening eventually causes them to say, “No, wait..what were you saying?… ”
The reality is that the equipment debate (Eclipse 500 vs. Adam A700) really distracts us from the core problem. If companies can make money with Cessna 172s, then that is where to start. Not that this is a practical or realistic machine, but we know 2 things about them: Damn cheap and known history. No surprises. That is what businesses like.
When you take new technology and claim that you are lowering the cost of operation, creating an entry level jet, etc. you miss one critical thing: Bigger and, in some cases, equally fast aircraft are already flying at the same DOC (direct operating cost for non Air Charter Geeks).
What is the difference? They are not jets, they are turboprops. But when appealing to a mass market, it is price, not the jet engines that will be the distinguishing factor.
So.. as I sit in my PC-12 while doing my 5th run to White Plains for the day to hit my 5.4 hours of daily usage on my fleet of one aircraft, I’ll quietly take home my tidy profit and look for partners who like buying fully depreciated aircraft that carry a big load for not much money. But..will there be a bathroom? I don’t know.. but I can always put one in, after all there’s plenty of room.
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