Plane Conversations

After the justice department approved the merger of Continental Airlines and United Airlines last Friday, Congressman James Oberstar (D-Minn) voiced his displeasure again  with the merger and suggested that Congress might just need to reconsider the deregulation of airlines that happened in 1978.

The airlines have been stuck between a rock and a hard place for years. Combined profits of the industry are non-existent and customer satisfaction with airline service is somewhere down there in the range of our approval ratings of congress’s performance.

What we have received from deregulation are cheap air fares. Most people don’t remember what it cost to fly on the airlines prior to 1978 because they were either not old enough or did not fly on the airlines back then due to the costs. Real costs for flying via commercial airlines have come down over the past 30 years but the by product of lower fares has been a reduction in what we consider to be service and the amenities of air travel. In some ways airline travel has become just another form of mass transit much like rail service.

What we want we can’t have, and the government stepping in will not solve the problem.

We want our cheap $99 return fares, anywhere, anytime, and we want great service and convenient on time departure schedules to go with the low price.

Deregulation brought on the competition with low cost carriers, which brought down the fares that we all enjoy.

Low fares combined with volatile fuel prices, worldwide competition with lower labor costs and airlines irrationally putting too much inventory of seats in the market took the profits out of the airline industry.

So now we have to adjust to some new fare structure and service level that the free market should work out. Mergers of air carriers are a part of this evolutionary process.

The airlines and their shareholders deserve to make a profit, or at least attempt to do so, while providing air transportation to the consumer. Unlike a utility where we have no choice, we don’t have to fly if we don’t like the combination of price, service and time efficiency of air travel.

As my Southwest flight pulled into the gate Sunday afternoon at Nashville, the flight attendant reminded us that we have many choices about who we fly with and he thanked us for choosing Southwest Airlines. In reality we have choices beyond whom we fly with because we can drive and in some cases take the train. We can also choose not to go at all.  

Regulation of air travel from the federal government should be limited to matters of safety. Congress should not venture anymore than they already have into the regulation of customer service, pricing and competition. 

Government intervention has not brought much value to anything lately and I can’t imagine a scenario where reregulation of the airline industry will ultimately benefit the US economy and the consumer of air travel.

Last weekend I was in Chicago as a guest of Apex Brasil  to attend the Peak Anti Freeze and Motor Oil Indy 300 Race. This was the first Indy race I have attended and I hope not the last. Tony Elrod, with ETA Logistics , drove us from the airport to the hotel and promised that I would be hooked on racing after the first event. I have to admit he was right.  

Melanie (my better half) and I arrived in Chicago Friday afternoon in time to get to the hotel downtown and attend a dinner hosted by Apex Brazil at Texas de Brazil Steakhouse Churrascaria. I have been to an authentic Churrascaria in Sao Jose Dos Campos while visiting the Embraer factory. Texas de Brazil has them beat on décor and sizzle but I would give them a tie on the food quality and flavor of the beef.

Apex Brasil (The Brazilian Trade and Investment Promotion Agency) was created by the government of Brazil to promote companies in Brazil to the international market. To promote Brazilian companies here in the US they have become a major sponsor of the Indy Racing Series. They do an excellent job with connecting their businesses through the face to face networking of events like these races.

As a part of their race sponsorship, Apex Brasil is supplying pure ethanol fuel to power the race cars. Brazil is a world leader in the development and production of bio fuels. The major producers of ethanol in Brazil are now working on an aviation fuel to power commercial aircraft. 

Our business connection to Brazil is through Embraer Executive Jets as an operator of two Phenom 100 light jets. We have also delivered 11 aircraft from Brazil to new owners in Europe and the US as a provider of delivery and mentor services.    

Saturday we went to the race track early afternoon for a tour of the pit and garages where the teams were making last minute preparations and going through inspections prior to the race. It is fascinating to see what goes on behind the scenes of a major race. Just prior to the race we were able to walk by the cars, out on to the track and watch up close as the drivers were introduced.

I was glued to the seat the entire race, and listened through headphones connected to a scanner to the conversations between drivers and the spotters. What a great way to get into a race by hearing the teams talk as it is happening real time.

Sunday we had the day off and took the Chicago Architectural Foundation  boat tour on the river. The tour lasts 90 minutes and is packed with information about the buildings that make up the skyline in Chicago. Chicago was the first city to have skyscrapers, and is rich with architectural heritage. I would highly recommend this tour as a way to learn about Chicago.

On the way back to the airport, Tony recommended going through the drive through at Portillo’s for an Italian Sausage Sandwich on a French Bread roll with grilled Sweet Peppers and Mozzarella. What a treat and a fun way to end our stay in Chicago.

Thanks Tony for getting us to and from the airport with great conversations and thanks to Apex Brasil for a great weekend.

This past week I had the privilege of taking a tour of the Hawker Beechcraft factory and corporate headquarters in Wichita Kansas.

The tour started at our home base in Tennessee with a flight to Wichita on a new Hawker 4000. The aircraft is impressive and I will post soon with video and more information on this new generation, state of the art, mid size business jet.

Our company has operated Beechcraft King Airs for over 25 years, and much of my flying time is logged in various Barons and Bonanzas, so I have been a fan of Beechcraft for a long time.

The King Air series aircraft are without argument the most successful turboprop ever built with a production run spanning 5 decades.

The King Air C90GTX / B200GT / 350I series aircraft are still in production for civilian and military applications. All are evolved from the original King Air that first rolled of the line in 1965.   

Hawker Beech’s jet aircraft in production include the Hawker 4000, Hawker 900XP,  Hawker 750, Hawker 400XP and the Premier 1A/II. The Hawker 750 and 900 series aircraft are evolutions of the original Hawker jets manufactured in the UK and are the best selling series of business jets in the world.   

Hawker Beech also manufacturers variations of the military T-6 trainer, which is the primary trainer for both the navy and air force pilot programs.

The Beech Baron G58 twin engine and Bonanza G36 single engine piston aircraft round out the line of aircraft in production.     

Arriving to the factory at Hawker Beech’s airport in Wichita, our first stop was the delivery hangar, where new aircraft were in the final stage of delivery to the new owners.  There is a large American flag on one wall, prominently displayed as reminder that these aircraft going all over the world are made in America.

Wichita is the number one city for growing exports and Hawker Beech plays a big part. The percentage of aircraft exported now exceeds the percentage staying in the US and this will continue to increase as the demand for business aircraft worldwide grows faster than in the US.

One of the things that interests me most is innovation in our business and Hawker Beechcraft has done that with their new Hawker 4000. The Hawker 4000 has a   composite fuselage and uses composites in combination with traditional metal structures in other areas of the airframe. Composites are lighter but stronger than metal structure allowing savings in weight and increases in fuel efficiency and performance, as well as reduced maintenance costs.

Use of composites in aircraft sturctures is here to stay as evidenced by the Boeing 787 having a composite fuselage.

What impressed me most from the whole tour is the sense of pride emanating from the employees, from the senior management to the people on the floor. These people are proud of what they make and should rightly be proud of the 75 plus year legacy of excellence in aircraft manufacturing.

A lot has been said about the competitiveness of the US aircraft manufacturing industry in the global market.

A current issue that Hawker Beech has to deal with is to what degree they move production out of the US to save costs. The unions in Wichita are fighting for the jobs to remain US and the decisions will be difficult. Hawker Beech must remain price competitive and at the same time they cannot afford to lose the skill and aggregated knowledge of the workforce in Wichita. 

There is a positive and determined corporate culture that I admire with the leadership and employees at Hawker Beech. That will keep them in the competitive game of aircraft manufacturing well into the future.

I recently finished reading Falcon 7 – the new novel by best selling author James Huston. His last book, Marine One, made the NYT best seller list. I needed to try out my I-Pad book reader and Apple has this title in their bookstore so this was the book to try out the I-Pad reader.

James Huston takes aviation, international law, and the world of military special ops intrigue and weaves a story that will not let you put the book (I-Pad) down until you are finished.

The name for the book comes from the new long range business jet the Falcon 7X, manufactured by French company Dassault Falcon. The Falcon 7X is the culmination of state-of-the-art technology in business jet manufacturing and has a non-stop range of 5950 nautical miles at high cruise speeds. The aircraft incorporates fly-by-wire technology that has usually been reserved for airline class aircraft.

The Falcon 7X plays an important role in the book, a role revealed in the first few pages, and it continues to play a part in the plot as the story progresses.

For aviation lovers, the book includes great scenes involving helicopters, low level flying, FA-18 fighters and Unmanned Aerial Vehicles.

James Huston is an attorney with a practice in international and aviation law. He was also a Top Gun Naval aviator and flew the F14. He has used his knowledge of aviation and law to tell the story that will keep you spellbound and will convince you that this could really happen..  

The book starts with an FA-18 over the skies of Afghanistan on what was to be a routine mission. While on their flight back to ship, the crew is diverted to a target across the border in Pakistan. After making what was assumed to be a bomb drop on a terrorist meeting site, things start to go wrong, the aircraft is shot down and the crew ejects.

I won’t go farther in the story and give it away. If you like aviation and you like to read Grisham novels you will love this book.

Buy it in the airline terminal or at the Apple Book Store on your I-Pad and it will get you through a long stay in the terminal or a cramped and boring international flight.

You will wish you were in the back of the Falcon 7X instead of the coach seat in the back of the Boeing; but, you will not want to go where the Falcon 7X takes the characters in this story.

Delta is in the Social Media Game

You can now book a flight on Facebook on Delta Airlines Facebook  page and tell your friends about it without ever leaving Facebook.

When you are on Delta Airlines Facebook page you click the “Book a Flight” Button, then click the get started button. Immediately Delta asks for permission to access your information on your Facebook page including your Friends, user ID, networks, gender, and profile picture. If you don’t allow it the process stops as far as I can tell.

I guess the assumption is that you must give up your data if you want to play the booking game through Facebook. So to figure this out, I let them have my information.

From there it is a fairly easy process and not much different than booking on their main site. You have the option to share the flight with your friends. I have not booked a flight on Facebook to see what happens next. If anyone reading this has used this application I would like to hear your thoughts.

I can see this being used for personal travel but not so much for business. I am not totally sure what the real value proposition to booking through Facebook is at this point, with the exception of the ‘Sharing” of my flight information, and maybe for the Faceobook junkies who cant leave the site it does something?

I wonder what Delta does with my information they now have access to? Will they use it to help me solve travel problems or use it to target me for advertising messages?  

Delta at the time of this posting has about 38,500 Fans on their page. Lots of comments:  some positive and and a lot of negative about service issues.

It is hard to tell if Delta uses Facebook to actually communicate to the market.

Delta has also gotten more active in the use of Twitter and now has a staff to respond to Tweets. When I go to their Twitter acccount  they have 78.000 followers, they follow 730 people and it looks like they don’t respond daily as there are lapses in their tweets on their corporate account.  They do have a Twitter account “deltaassist‘  that focuses on resolving customer issues. This account has 2300 followers.

The airlines are waking up to the use Social Media tools. What will be interesting to watch is how they use the technology. Will they enhance the customer experience, listen and react to the market of travelers needs, or will it just be another way to get more money from the traveler with no value added?  

Could Business Aviation and the Air Charter Industry use these same tools to reach the market in a postive and social way?

An Article  titled Six Ways the Travel Industry can use Social Media is a good read if you have the time.

Airlines are trying to make a profit; something that has not happened in aggregate in their entire history of serving the traveling public. In an effort to make a profit in the past few years they have unbundled their pricing and added fees back in for everything imaginable.

I can’t blame them for trying to make profit. Profit is not a bad word. 

But somehow this whole idea of  add-on fees is having an anti-social effect on the traveling public. Mainstream media has spent a great deal of space on this issue.  The latest comes from the New York Times in an article titled “Airline Fees Test Travelers’ Limits”. 

You can almost feel sorry for the airlines because it seems at every turn they are getting kicked by either the government or the media. And the more kicking they do, the more the public demands a change. It is almost to a point where we feel that we have a fundamental right to travel cheaply by air and without problems. I don’t remember seeing this in the Constitution, but you never know. An amendment dealing with airline travel may be forthcoming.     

Congress thinks they can solve it by putting more rules (laws) in place to regulate everything from how you advertise your rates to how long you can keep a person stranded on an aircraft sitting on the tarmac. How can you regulate customer service?   

 I wonder if there is a point where the airlines figure this out?  The solutions are neither simple nor obvious because the airlines must make a profit.  At this point, though, they don’t seem to have a vision of how they can create both profits and happy customers.

 We run a business that offers an alternative form of travel. It is not cheap, but travelers do like to travel in our aircraft. 

Most days we have happy customers. Occasionally we make a mistake or weather and the laws of mechanical physics conspire against us and we end up with an unhappy customer. The air conditioner breaks on the hottest of days or weather prevents us from departing or making an on time arrival or …..

 When that happens, it is up to us to make it right. We should do what it takes to fix it. If we don’t make it right, then shame on us. Those customers who see you do the right thing when things go wrong become the best customers. When you don’t do the right thing, then the customers go somewhere else for the solution.  

Our customers are smart and successful people. They run businesses themselves and know what it takes to deliver their product or service at a profit while meeting the expectations of their customers. They also know that things can sometimes go wrong; so, mostly, I have seen a degree of patience from our customers to allow us to “make it right.”

I don’t see that with the airlines. Patience has run out. As the NYT article title suggests “travelers’ limits are tested”.

One side of me smiles and says I hope that the airlines keep doing more of what they are doing. It pushes people to consider using our form of air travel even though the dollar cost is more.

The other side of me says that the airlines need to figure out how to make their customers happy if at all possible.  The economy of this country will win if they do that.

The bottom line is that travel is about productivity. Efficient travel contributes to economic productivity and inefficient travel kills productivity. Stress in travel has to reduce productivity, too.  Let’s figure out how to eliminate the stress.

Loveland Colorado’s Public Works Director  has announced a new program they hope to put into place at the Ft. Collins – Loveland Airport soon and it is called “Wingless Flight”.

I heard of this concept a few years ago and then the idea went away. I am not sure why it did not take off a few years ago but I would venture a guess that TSA could not get their heads around it.  

Basically you would drive to the Ft. Collins Airport, park, check your bags and clear security there, but instead of boarding a plane you will board a bus that will take you to Denver International (DIA). Once you arrive at DIA you will be deposited in the terminal with all security screening having been handled in Ft. Collins.

So what is the advantage of this?

If properly run it could save both time and money. Parking at Ft. Collins is easy and cheap,  and clearing security and going through the lines will take a minute or two versus the sometimes hour long wait at DIA.

I think success would depend on a high frequency of bus trips with a reliable time schedule so that users of this service can count on not spending a lot of time at DIA before they actually board their flight.  

If I lived in the Loveland area and got off a flight at DIA coming home and had to wait any time at all at DIA for the bus  back to Loveland I would lose patience. Once I am home, as in back to the terminal at home base, I can’t wait to get out of the terminal building to really get home.

Operating under the premise that we all fly to save time, anything that can reduce the door to door travel experience should be a winner. If it doesn’t really save time then saving a few bucks on parking won’t push people to do it?

The comments in the 9News.com  article about this are for the most part skeptical. One commenter states that this has already been tried in Boulder a few years ago.   

I have seen an almost similar scenario in Vienna, Austria, where we checked our bags at the rail station downtown that runs non-stop to the airport. We still had to clear security at the airport; but, at least we got rid of the bags. Europe, with its developed mass transit rail system, has the airport to rail connection down to a science. Most major airports are connected to a rail system by a short walk out of the terminal building.  

Give these guys in Loveland  an “A” for effort and innovation. Time will tell if the idea catches on.

Anything to reduce friction in travel is good. With the exception of price, travel by private aircraft takes care of all of the issues this proposed service are attempting to solve. How about a private flight out of Loveland Airport non-stop to your destination on your schedule.  Bypass DIA entirely!

Congress is still not getting the job done with the FAA Reauthorization bill.

In previous posts  on Plane Conversations I have discussed the issues surrounding all of the different provisions of the bill and why it still hasnt passed into law.

I still don’t know why Congress has to pile in all these controversial provisions that deal with Unionization of FedEx and landing slots at a couple airports into a major funding bill that has been in a stall for years.

The only reason I can think of is good old fashioned politics and game playing on the hill, and in the mean time issues with safety, upgrade of a severely outdated air traffic control infrastructure and long term funding to run the FAA gets postponed again.   

If those of us who run businesses and make payroll every week ran our business like these guys do business on “The Hill” we would have been out of business a long time ago.

Reporting from the Los Angeles Times by Julia Love, Tribune Washington Bureau in a July 30 article:

 Responding to the deaths of 50 people in the crash last year of a Continental Airlines flight near Buffalo, N.Y., Congress passed legislation Friday requiring increased training and experience for regional airline pilots.
The House passed the measure, which also extends Federal Aviation Administration funding, on a voice vote just before midnight Thursday, and the Senate approved identical legislation Friday morning. No member of either chamber objected.
The legislation requires all airline pilots to log at least 1,500 hours of flight time before flying passengers, up from the current 250-hour minimum for newly hired copilots. The bill also boosts training, mandates the creation of a national database of pilot records and aims to reduce pilot fatigue by directing the FAA to update rules on pilot duty hours.

So under political pressure from the families who suffered loss from the crash in Buffalo congress has passed a special bill dealing with pilot requirements and training for airlines.

 The target for the FAA long term funding reauthorization is now set for September 30.

 Any bets on whether they get it done before election time in November?

As I write this I am returning from a two day trip to the Caribbean.

Our company works with small airlines leasing aircraft, providing maintenance support services, parts support and training. We do much of our business outside of the US.  

I had the opportunity to catch a ride on one of our leased aircraft going to Tortola, BVI to swap out for another aircraft coming back to Tennessee for scheduled maintenance.

The aircraft we flew down and back were Jetstream 32 – 19 passenger turboprops, one type in a group of regional airline aircraft that will continue to work for small airlines around the world for years to come.  

BVI Airways  started a few months ago providing point to point service between Tortola  and St. Maarten and Antigua. They also do charter flights to the other islands. The airline was started by three US pilots who have worked in the regional airline and air charter industry for most of their aviation careers. They saw an opportunity to fill an unmet demand for travel between Islands and took the leap of faith to start a small airline far from home. If you are going to start an airline it may as well be in a nice place like Tortola.

BVI Airways has an excellent business plan that allows them to be flexible with their routes as travel needs change with seasonality and times of the year when the islands have special events like carnival and homecomings.

After a short 14 hour visit to Tortola we flew up to San Juan PR and met with a startup airline, Lebar Air, that will be providing both scheduled and on demand charter service out of San Juan to the Dominican Republic and other islands within a 250 mile radius of San Juan. They share a similar business plan as BVI Airways but serve a different niche market of travelers.  

As I think about these two operations and other operators we have gotten to know in the Caribbean, including operators in the Dominican Republic and Haiti, I see a group of small airlines that are meeting demand for point to point intra-island and inter- island travel which the major airlines and their commuter feeders don’t meet.These airlines are a cross between a scheduled airline and on demand charter operator with a nimble flexibility the big airlines cannot match. When you ride on these small airlines, the feel is much more like a charter flight where the pilots are talking to you and helping you with your luggage before you board. Islanders are used to this type of service and take small aircraft flights as a routine way of life.   

 From the perspective of the operators we work with, the economic outlook for Puerto Rico and the British Virgin Islands is good. Like the US, they have waded through the recession, but the allure of the islands continues to spur development of new hotels and resorts and all the support businesses that go with it. With new resort development and tourism growth come jobs and economic growth for the entire region. As more travelers come to the Caribbean from Europe, North America and South America the demand for inter-island air travel will grow.

These small airlines that meet the market demand are poised to prosper as they provide a very critical transportation component to the regions economic development.

I am a little jealous of these operators because they have a captive audience of travelers. You can’t just get in your car and drive from Tortola to Antigua like you could from Nashville to Atlanta.

The only complaint about the trip south was the lack of time to enjoy the white beaches and blue water. I think I could easily get used to the speed of island living.

Starting the end of this year, if you are an aircraft owner you will have to apply for a new aircraft registration. The month your current aircraft registration was issued in will determine its expiration and when you have to apply for the new registration. 

For example if your aircraft registration certificate was issued in March of any year you will need to apply between November 2010 and January 2011 for the new registration.

 If you have no changes in your registration you can do the renewal online.

The new rule puts a three year expiration date on the new registration. I have seen this in many countries and it is usually a means for the government to collect more money from aircraft owners.

Prior to this rule change, an aircraft registration (the certificate that identifies the aircraft owners) was good indefinitely until such time as the aircraft owner(s) sold the aircraft. It also should have been canceled if the aircraft was scrapped, totaled in an accident of if the aircraft was registered with ownership in another country’s registry.

The new registration fee is $5.00 which is insignificant at this point. Hopefully this is not a means to eventually tax ownership though the registration process.

My concern is the FAA’s ability to handle mass registration submissions without creating a backlog of paperwork that would cause some owners registrations to become invalid even though they have complied with the new rules.

The FAA is saying if you don’t have a valid registration your aircraft can not fly. Basically lack of current registration causes the aircraft to be un-airworthy.  

The FAA’s concern seems to be that their data base in not accurate because aircraft owners don’t play by the rules. The FAA claims that possibly 35% of all aircraft registered are not flyable or have wrong information.  To some degree that is a valid concern, especially with scrapped aircraft that could be put back into service in an un-airworthy condition.  

So now we all have to submit new forms every three years and track the expiration. For fleet operators it is another item to track on their maintenance program. For individuals who own aircraft, I assume they will be responsible for tracking it and held accountable if they don’t? I don’t see where you get a reminder like we get in Tennessee when our car tags expire, but maybe that is coming.  

The FAA is understaffed today so how are they going to keep up with this, and especially how do they enforce action against those who don’t comply. Do inspectors have time to go around and check on all of the 357,000 plus aircraft registered in the US?

You can read the FAA rule and information here.