The refreshing part of reading the New Yorker is knowing that so many jet and fractional owners are reading it too.
Of that group, it is important to note that private aviation readers can be divided into two groups: Those that made their own money vs. those that were born into it or just had good timing off the bus from Amherst into Goldman Sachs.
The ones that built their own usually have one thing in common - they knew how to get something far below its actual value. This would be the opposite of buying a business jet - which, until now, has been an exercise in paying far more for something than its actual value.
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The tough part about the childhood game of musical chairs is knowing that some fellow party goer gets the axe every time the music stops. Worse, it could be you if you aren’t fast enough in terms of lunging for that chair. While it would have been a stretch to say this about fractional ownership (or new positions in an Eclipse!) years ago, the fact is that we did.
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Admittedly this is one of the toughest times on record for the industry, be it operator, manager, or owner. When we launched the Fractional Forum in 2003, we had already laid much of the groundwork for the Jet Owner Group. The idea was to fill the void: Give the person in back truly objective and honest information on how the industry worked.
The key to navigating uncertain times is to understand what you already know. The private air charter industry exists at the pleasure of those who are generous enough to buy an aircraft for the local, regional, or national charter operation of their choice. Being smart about investing in that aircraft typically means understanding all the dynamics that erode the fixed, variable, and true depreciation costs.”
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Don’t you hate losing your keys? It is one of the most time honored modern struggles. You are late, you need them, and you can’t find them. If it is not your keys it is some PDA or phone thing you’ve grown attached to. Or, if you are really absent minded, like me, it is your wallet, … and keys.
A recent informal poll of air carriers in the hardest hit economic zones offered a resounding revelation that made us think about keys. Sales. Finding new customers is a bit like looking for your keys. When you need them, they are hard to find. Then we got a slug of these responses while doing the informal poll: “Things are slow.. we can’t / won’t advertise now…”
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While many FBO and air charter folk may defend the alphabet groups for all the “good work” they do in Washington on our collective behalf, I have to admit the evidence is weak - especially when it comes to the world that I work in: People who charter airplanes, buy fuel and aircraft. That’s who feeds me.
Popularity: 26%
We all hate hangovers. There is nothing pleasant about waking up from bad dreamless sleep to the intense regret that you begin to associate with sobriety.
But, in general and private aviation, metaphorically, we like TO DRINK. And we do it A LOT.
And that’s ok, so long as the booze keeps flowing, but the spigot is being shut off and lots of people aren’t as pretty as they once were. That little air taxi co.? Yeah, … not so cute in daylight. The manufacturer? Let’s not discuss the unspeakable acts they performed to get customers.
Dayjet’s recent collapse and Eclipse’s soon to follow path highlights just how far hubris and delusion can take you, your investor’s money and others into that big crater when you go on a bender.
Our cute little industry suffers from truly catastrophic failures. Richard pontificates on these tragedies years before they happen, which leads us to write posts like “The Joy of Being Right but Ignored.”
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Popularity: 34%
While writing stuff about aviation is fun, I’ve noticed that a lot of my babble is critical, or has some negative twist to it. But since we live in an industry that runs so high on passion, dreams and people that actually like what they do for a living, writing about it is fun - even for a crabby critic.
But critics have a role, and most recently, when reading one of my wife’s sociology papers, it dawned on me: Society (and by extension aviation) suffers from a substantial dichotomy between what we say (and do) privately vs. what we say and do publicly. That is how projects like Dayjet and Eclipse go so far off the rails, so quickly, and with so much money.
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Realistically, there are few similarities between these institutions.
Eclipse Aviation is a privately funded aircraft manufacturer. The British Empire is… well, we assume you all know who “they” are. The common thread, that binds them, however, is our good friend Mahatma Ghandi who famously offered:
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The Survival of Part 135 Companies in a Fractional Market
Adam was helping me understand a client file the other day, when something odd struck me:
Fractional ownership of jets has eclipsed private air charter.
The funny thing about this trend is that despite the lack of scalability or profitability within many fractional firms, the reality is that many customers seem to prefer to consume their private aircraft experience one of three ways:
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The TAG Aviation / AMI Jet Charter Fiasco
Almost every species that ever lived is extinct. Many of them became so during a single event almost 70 million years ago by an ELE, or Extinction Level Event. Something - probably an asteroid crashing into the Earth - kicked up enough dust to dramatically cool the planet almost overnight, ending the 130 million year reign of the dinosaur. (Photo by Dan Hyde.)
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