Very Light Jets ... Pulling Down Profits?

BoilerPilot2007

BoilerPilot2007

Well-Known Member
My question to ya'll:

Will the introduction of very light jets pull business-class passengers off airliners, and decrease any of the revenue airlines have been making?

Do you think it will be a major problems airlines will have to contend with? If so, how do you think the airlines should respond?

In my personal opinion, I believe VLJs could pull a significant number of business travellers from the market. Now, VLJs will still be fairly expensive to charter, but will attract many individuals and companies who were unable to pay current-day prices for charter flights. Will they attract enough attention to have a negative impact on the majors? We'll have to see. I doubt they will be able to compete against current charter aircraft because of their reduced range. However, things could change based on future technologies.
 
obviously there seems to be a percieved market for them as everyone and their brother seems to be building them these days.

I think business class and first class might loose some passengers but i doubt coach will see any sort of noticable drop
 
If people are too cheap to pay 100+ for an airline ticket and still complain at how small they are then I doubt you will see many wanting to pay 3 times as much to fly on a itty bitty jet.
 
BoilerPilot2007 said:
In my personal opinion, I believe VLJs could pull a significant number of business travellers from the market..
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Agreed, but if any business travellers are lost it'll be the big decision makers and not middle management types. Look at the way technology is allowing business to communicate. Instead of having to fly a group of people around the country you can simply set a video conference and take care of business more affectively at a fraction of the cost.

My dad manages and flies for a developer in SoCal. They purchased a 26 year old King Air 200 for $1 million. With this relatively inexpensive AC they can move key people around quickly and flexibly. Smart companies already know the value of having a business aircraft even if it doesn't show up on on the balance sheet.
 
Texasspilot said:
If people are too cheap to pay 100+ for an airline ticket and still complain at how small they are then I doubt you will see many wanting to pay 3 times as much to fly on a itty bitty jet.
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Wrong market segment, man--that's the leisure traveler segment. Biz travelers pay an avg of $500 for a ticket domestically, even more if going first class. It's the first class travelers who are switching to charter/fractional operators for travel.
 
whered you get the 500 dollar figure from.....most companies Ive heard of fly thier people coach and as cheaply as possible.
 
FlyOrDie said:
Agreed, but if any business travellers are lost it'll be the big decision makers and not middle management types. ................................. With this relatively inexpensive AC they can move key people around quickly and flexibly. Smart companies already know the value of having a business aircraft even if it doesn't show up on on the balance sheet.
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There are a lot of businesses that must move many people on a regular basis. And an awful lot of small businesses that have to move a few people. There is a cost to that well beyond the cost of the ticket and that is lost productivity. If you can cut several hours of travel time a week for your people, it's a big deal. Hence, the enormous success of corporate, fractional and charter ops.

The reason the VLJ people think this will go is they expect to be able to do it, profitably, for much lower fares than most people on this forum think they can. It's not just the economics of the airplanes, which are much cheaper to acquire and operate than previous jets or even turboprops. It's also their plan to have much higher utilization than the average charter or corporate flight department.

So when they can make money charging typical airline fares, while saving the customer hours of travel time they think it will sell.

But it will be a long time, even if they are wildly successful, before they impact the airlines much. That's another part of their success formula. They don't need many of these business travelers to fill their little jets and make money. Call them the latest cherry-pickers. Hoping to move in under the radar and grow their business just like SWA did.
 
Casper said:
obviously there seems to be a percieved market for them as everyone and their brother seems to be building them these days.
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And 10 years ago every one and their brother was investing in "internet stocks".

I'm a "interested bystander" regarding the VLJ's due to the potential impacts on the work I do for the FAA. It is very interesting to me that the biggest orders for Eclipses are from a company founded by a technology guy. They basically wrote some software for managing airplane schedules, then decided it would be more profitable to start an "airline" (sort of)than to sell their software. It is yet to be seen if their is demand for the product, if their software works well enough to make a profit with their businesss model and if there was enough consideration given the "human factor". By "human factor" I mean the crews. No one has ever done anything similar and it seems the me the model necessitates a lot of "away time" for the crew. It'll be interesting to see if they can keep pilots.
 
Higher I would imagine. Single pilot jet IFR. I'd imagine insurance would keep it up around 2500tt /500multi near the bottom of the requirements.

With 600/100 you need that babysitter in the left seat. With the VLJ's you don't get that option.
 
Tiger815 said:
By "human factor" I mean the crews. No one has ever done anything similar and it seems the me the model necessitates a lot of "away time" for the crew. It'll be interesting to see if they can keep pilots.
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I had seen comments, I think from DayJet, that are quite the opposite. Whoever it was said their crews would work either a morning or evening shift and be home every night. All factored in to their scheduling software. They suggested it would be one of the ways they would attract qualified crews.

You are correct that besides the economics of the jet itself, there is heavy reliance on scheduling/utilization to get costs down to where fares are attractive. My main concern for their model would be how hardy these airplanes are. Can they really stand up to the schedule?
 
Texasspilot said:
whered you get the 500 dollar figure from.....most companies Ive heard of fly thier people coach and as cheaply as possible.
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That is coach. Call up AA or CO and ask them what a round-trip from DFW to JFK tomorrow morning would cost. Business travel is still generally a last-minute thing. Leisure fares generally require 14 days' advance purchase and a saturday night stay, do they not?
 
flyover said:
I had seen comments, I think from DayJet, that are quite the opposite. Whoever it was said their crews would work either a morning or evening shift and be home every night. All factored in to their scheduling software. They suggested it would be one of the ways they would attract qualified crews.
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I can't see how they can do that, unless the plan is to "pony express" the passengers swapping them off at some junction point so the crew can be home on time.

I'd love to know more about their operation.
 
Tiger815 said:
I can't see how they can do that, unless the plan is to "pony express" the passengers swapping them off at some junction point so the crew can be home on time.

I'd love to know more about their operation.
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I think the key is that the service areas and markets are well defined. They call it "on demand" and "your schedule" but they are going to enter into markets where they know the city-pairs that are in demand.

Day Jet definitely talks about their plans on their website. Again, I'm not sure where I read about the crew scheduling. Seems like it was a magazine article on one of the operators. Here's Day Jet's website address: http://www.dayjet.com/

Also here's a pretty comprehensive article over at Pogo Jets site:

http://www.flypogo.com/NewsView.aspx?id=3

However this turns out it should be fun to watch.
 
BoilerPilot2007 said:
My question to ya'll:

Will the introduction of very light jets pull business-class passengers off airliners, and decrease any of the revenue airlines have been making?

Do you think it will be a major problems airlines will have to contend with? If so, how do you think the airlines should respond?

In my personal opinion, I believe VLJs could pull a significant number of business travellers from the market. Now, VLJs will still be fairly expensive to charter, but will attract many individuals and companies who were unable to pay current-day prices for charter flights. Will they attract enough attention to have a negative impact on the majors? We'll have to see. I doubt they will be able to compete against current charter aircraft because of their reduced range. However, things could change based on future technologies.
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The VLJ program could steal business away from the various Corporate Programs, why buy a share in a GIV, when you can purchase a VLJ outright for your personal use....

As far as stealing business from the major airlines, minimal at most.

What I am most curious about is how we are going to handle 4,000 of these additional aircraft hitting the skies....

These VLJ can fly up to 35,000 feet, going to start getting mighty crowded up there.....
 
mpenguin1 said:
The VLJ program could steal business away from the various Corporate Programs, why buy a share in a GIV, when you can purchase a VLJ outright for your personal use....
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The attraction of fractional ownership, among other things, is not having the hassle associated with private ownership. So why purchase a VLJ when you can have part of a nicer jet for the same money? It's not even a market they are trying for.

What I am most curious about is how we are going to handle 4,000 of these additional aircraft hitting the skies....

These VLJ can fly up to 35,000 feet, going to start getting mighty crowded up there.....
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Bet is you will rarely see them up there. The performance numbers on these light jets only look attractive on shorter legs. If they are a success it will be at FL290 or below and staying away from busy airline airports.

These jets are not a threat to Gulfstream. If this is successful it will be because they are able to market a whole "new" product to a whole new market. I go back to Federal Express. When they started there was no demand for next day deliveries, none. They created the service then convinced people they needed it. (No small thanks to the horrible service the USPS was providing.) These guys need to convince thousands of road warriors who only know airlines or driving, that they "really need" this service. In a way, the current horrendous airline experience (TSA, high load factors, etc.) could be the opening that gets this service going, just like the poor USPS service did for Federal Express.
 
Windchill said:
User fees for GA aircraft ......






............... :sarcasm: :sarcasm: :sarcasm:
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I think they should charge my little Cessna 152 landing into San Diego International (which I've done before) $800 and give it to the airlines affected. I too agree. :sarcasm: :sarcasm: :sarcasm:
 
mpenguin1 said:
...

What I am most curious about is how we are going to handle 4,000 of these additional aircraft hitting the skies....

These VLJ can fly up to 35,000 feet, going to start getting mighty crowded up there.....
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Ding, Ding, Ding....That's the $10,000 question for the Air Traffic Organization - Plans group at FAA that I support. Believe me the FAA is thinking about it, but how do you plan for something that may or may not materialize? The first wave is defintely coming, but if the concept doesn't prove out profitably, orders can be cancelled and we may not reach those numbers.

The other issue is the VLJ's are going to be considerably slower than other high flyers, so there's a whole 'nother layer of complexity in terms of ATC if the concept does catch on as the purveyors anticipate.

Like you say, it's going to be an exciting time for Aviation.
 
Tiger815 said:
The other issue is the VLJ's are going to be considerably slower than other high flyers, so there's a whole 'nother layer of complexity in terms of ATC if the concept does catch on as the purveyors anticipate.
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Maybe a former Do328Jet driver can talk about what ATC does with jet aircraft in the flight levels that can't "keep up with traffic"?
 
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