There has been much publicity surrounding the introduction of very light jets. Just as this revolutionary market sector has sparked a wave of manufacturing - by established airframers and start-ups - so too is a new generation of operators emerging. Each has ambitions to transform passenger travel with an array of high-utilisation, low-cost air taxi concepts.
The USA has been fertile territory for the first wave of operators. Europe is next in line, bracing itself for a plethora of programmes designed to introduce the benefits of private aviation to a mass market, but at a fraction of the cost of traditional charter programmes.
According to the latest forecast by PMI Media, more than 1,100 VLJs will be delivered in Europe between 2008 and 2010 - half destined for owner operators. Of these, 314 aircraft have already been ordered for delivery in Europe and 116 will be handed over this year, 98 in 2009 and 100 in 2010, reaching up to 120 deliveries in 2020.
Cessna was first off the starting blocks when the Citation Mustang became the first VLJ to enter private and commercial service in Europe - the latter with conventional charter operator London Executive Aviation, which is reporting a huge market response to the six-seat jet.
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© Blink/Cessna |
Eclipse expects European validation later this year and Embraer in April 2009 for their respective Eclipse 500 and Phenom 100 VLJs.
"We are creating a new market with the VLJ," says Peter Leiman, co-founder managing director of UK air taxi start-up Blink. The London-based company is set to launch services during the second quarter with the first of 45 Mustangs on order. "We plan to revolutionise how people travel and will appeal to people who are frustrated with the lengthy waits at airports or the high costs of private jet travel."
Leiman and his partners at Blink have been working on the business model for two years.He says: "It delivers the efficiency and convenience of private air travel at a price that is competitive with commercial business-class fares. Gone are the long check-in times, the queuing through security and the waiting at baggage reclaim inherent in conventional air travel - just arrive at a Blink airport 10 minutes before the flight leaves. It is as easy as going to a taxi rank and hailing a cab."
Point-To-PointTravel
Blink plans to offer point-to-point travel by flying from and extensive network of under-used secondary airports across Europe that are "uncongested and closer to where you want to travel", Leiman says.
Blink is targeting four groups: mid-size manufacturing companies that require corporate shuttles between offices, factories and distribution centres leading technology firms that require rapid deployment of employees to support clients and operations high-street retailers, whose use of VLJs would enable managers to visit multiple locations in one day and multinational media companies that could use the aircraft for corporate hospitality.
"The VLJ has enabled us to create a customised travel solution for these businesses," Leiman says. "We build up a network from the beginning based on the schedule of these companies and early adopters take the lead. For example, Dell has offices in Bracknell, Montpellier and Limerick. We can transport employees to airports close to these bases whereas airlines cannot. That is the power of the VLJ - it's a no-brainer really."
By virtue of customer demand Blink expects expansion will grow within industries with similar travel needs - "and by virtue of starting in London, your customer base is already large. As we grow we will bring more capacity into the network. Eventually we will become a black cab with wings," he says.
For Arie-Willem van Doorne, chief executive of Netherlands-based start-up Bikkair, the challenge of the VLJ air taxi is marketing and selling the concept to the end user. The Rotterdam-based company began services in March with the first of four Mustangs - the rest will be added this year and up to 100 aircraft are planned by 2012. "VLJ transport is new to the operator and the end user in Europe. It's not a high-end product with fancy catering and a hands-on personal service, it's a flying taxi that gives travellers access to more than 1,200 airports in Europe. But it will take a while to get that message across," he says.
Block Hours
Bikkair is attempting to establish a network of bases situated no more than 30min flying time apart. The company offers block hours from 15-100h. "Business is doing well, with 80% of our customers first-time users of business aircraft," says van Doorne. Ten years ago private jets were mainly used by senior company executives or the rich. This has come down to corporate level and the next logical step is to open it to the mass market, he says. "The challenge is getting enough aircraft in time to meet anticipated demand, as aircraft backlogs are so long."
Delivery slots are not an immediate concern for Switzerland's JetBird, which aims to launch its pan-European low-cost operation next April with the first of 50 Phenom 100s on order.
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© JetBird/Embraer |
JetBird's business plan is based on the principle of low cost, high utilisation. "The introduction of the VLJ has given the industry a jet aircraft for a fraction of the cost of a light business jet, but our concern at first was whether it can fly the missions of low-cost carriers - 1,000h a year is a punishing schedule," says chief executive Stefan Vilner.
He says JetBird is attempting to learn as much as it can from low-cost carriers by looking at their operations of scale. "We will fly short sectors in Europe with hubs in destinations such as Zurich, Milan, Oberpfaffenhofen in Germany, London and Paris initially."
Vilner says JetBird will not be a luxury brand, but a cost-effective means to an end. "Through our market research we realise that passengers are not interested in catering and other frills associated with business aviation. They are happy with a bottle of water but, most of all, aircraft availability, flexibility and a decent fare."
JetBird, which has been awarded an aircraft operator's certificate from the Irish civil aviation authority, expects the majority of weekday passengers will be company executives, while at weekend the demand from leisure travellers "will be huge". JetBird plans to take delivery of 15 aircraft in its first year and 40 aircraft by the end of 2010. "We have the options for 50 more aircraft and we can switch to the larger Phenom 300 light jets if we choose."
Vilner is confident the low-cost approach is the route to success for air taxi operations as this model will open the market to vast numbers of new travellers. "Ryanair was warned that it could not survive by charging such low fares, but it has been hugely popular," he says.
This view is supported by Connor Neil, co-founder and managing director of Spanish start-up Taxijet. "It is fantastic that Ryanair and EasyJet have opened up the possibilities of air travel to hundreds and thousands of people," he says. However, aviation has become "a necessary evil, not a pleasure. In short-haul European trips - 1-3h - business class is a stupid decision. You pay three to four times the price for the privilege of sitting in front of a little piece of curtain, and your Coca-Cola for free. The same queues, the same delays, the same size seat, the same airports."
Neil says Taxijet's operation will fit exclusively around 30 Eclipse 500s in Europe and 20 in the Middle East and will target companies with an annual turnover of between €20 million ($30.9 million) and €200 million with two or three locations - factories, headquarters and sales offices. "Ninety per cent of our customers do not know private aviation exists - they are flying by scheduled carrier, driving cars or travelling by train."
Taxi With Wings
Taxijet is using databases to identify prospects, "data-driven, honing in with specific offers to specific people in specific companies. We have invested over €500,000 in technology systems to proactively manage our business." He points to Spain's 70 air charter operators - of which only three have more than five aircraft. "The bottom-end price point for an hour of jet travel is €2,700-4,000. Our price point will be €1,500 per hour of flight time" - driven by the low acquisition and operating costs of the Eclipse, he says. "Taxijet is a taxi with wings providing trips of 1-2h for up to four people between destinations in Europe."
The Taxijet Eclipse 500s are owned by companies that have a requirement for 100-200 flight hours a year. "We have a model that makes it more economic for them to purchase an Eclipse 500 and sign a management contract with us. We have converted the largest fixed cost of our business into a variable cost. If we fly zero hours, we pay zero for our aircraft."
Neil says one of the biggest barriers in front of Taxijet and other VLJ operators is getting the client to believe it is not a service for somebody richer, older, bigger or more successful - it is for them, now. "We call it the L'Oreal challenge because they're worth it," he says.
For many start-ups, however, the sales challenge is the least of their concerns.
UK-based Ambeo is seeking investment for its Cranfield-based operation. "We have put together a business plan that we will be submitting to potential investors soon, but it is tricky getting funding at the moment for an unproven business model in an unproven market," says founder Frank Noppel. Ambeo is mulling over all three VLJ contenders - Eclipse 500, Mustang and the Phenom 100 - with a view to buying 10 aircraft. "The Eclipse is cheaper to buy and to operate than its competitors, but the trade-off is price over comfort," says Noppel. Ambeo plans to target corporate travellers and employees on six-figure salaries as well as leisure travellers who do not want to be tied to stringent airline schedules or pay the high cost of private jet travel.
Icelandic start-up Acceljet is hoping by the end of the year to launch Iceland's first VLJ air taxi operation with a fleet of 10 Eclipse 500s and Mustangs and is in the process of securing equity funding. "We know we have a good concept that will fill the gap between the airline business class and private-jet travel, but it isn't easy getting funding for a new company nowadays unless you have a recession-proof idea," says founder Einar Amarson.
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©AccelJet/Eclipse Aviation |
He argues that the AccelJet concept could be huge in Iceland, where charter movements at the capital's airport in Reykjavik have grown by 4,000% since 2003, from 116 to 4,600 movements a year. There is a huge demand for business aircraft services within Iceland - serving remote locations - and from Iceland to other European destinations, Amarson says. "Airline schedules here are often expensive, infrequent and inflexible, so the VLJ will offer an appealing alternative."
While some operators consider the challenges of selling whole aircraft charter to a new audience, Germany's Air Cab is creating what is believed to be Europe's only known low-cost, per-seat on demand service. "We plan to start operating in 2010 and have not yet made our fleet decision," says founder Paolo Sommariva. He says the concept will be based on Florida, USA-based DayJet's air taxi principle.
"We will start by carrying the lower end of the market at first - line managers of small- to medium-size companies - and we plan to insert one aircraft a week into the operation for the first 10 years," says Sommariva. It is proving to be a "massive effort" to create a comprehensive management system that can handle everything from flight planning, weather briefings and maintenance schedules. "We have a crew of 25 people working on it," says Sommariva.
Air Cab will also operate to areas not served by the airlines. It is yet to make a final decision, but "we are focusing on Poland, the Czech Republic and Switzerland, initially on 15 cities within a range of 1,000km [540nm] of each other and flights of less than 1h", says Sommariva. "Our price goal is €1 per kilometre per seat and we expect to make a profit with 1.5 passengers on board."
Reserved Europeans
Air Cab is confident that the per-seat operation can be successful in Europe despite the reserved nature of many Europeans. "We could buy up all VLJ production for the next 20 years and we still couldn't satisfy the demand," says Sommariva.
There are numerous VLJ programmes in the making, on the brink of launch and in service, but most operators say there will initially be little or no impact on competition. Sommariva says: "The market is so fragmented you could quadruple the number of operators in the coming years and there would be little effect."
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Source: Flight International
