Plane Conversations

Any number of b-school power plays will cite the competitive advantage necessary in hard economic times.  But how many people talk about the cooperative advantage?

Information is power

When the buyer has the same information as the seller, markets are more efficient.  The Internet has made information free and easy to transport.  So, understandably, any business that hopes to survive by restricting information will ultimately find competition from a start-up that does not.

The “equal information” playing field

This scenario plays out over and over as industries as diverse as newspapers to higher education to government to commercial aviation are forced into profound transformation by the availability of equal information.  True to conventional wisdom, good information creates more good information and bad information creates more bad information. For Social Flights, our best customer is the educated customer because they’ll educate each other.

Coming to an Airfield near you…

The true cost of flying private jets is one of the best-kept secrets in aviation.  Corporate Jets are a source of mystery, controversy, and symbolism. There are many reasons for suppressing true costs such as avoiding public disclosure of VIP expenditures,  or to protect profit margins enjoyed by charter brokers.

On the other hand, there are many important and legitimate reasons why some people should fly private instead of commercial. Social Flights believes that there are many situations where the true value of private flight greatly exceeds the cost of private flight for a large population of travelers. The problem is to find possibly millions of passengers who do not know that Social Flights applies to them.

Information Transparency

For this reason, it is essential that a baseline cost be established in a market so that everyone can use the same data to make educated decisions about how to travel efficiently.  It is essential that the market can eliminate price distortions, suppress arbitrage opportunities, and equalize asymmetric information.  The focus of the industry should be on expanding the market through transparency, not short term gain by hoarding the limited existing market.

Cooperation is the new market advantage

Social Flights has developed an instant flight quote feature that calculates a nominal estimate to fly a private aircraft from any airport in the US to any other airport in the US.  This establishes a baseline on the actual cost to fly.  From this baseline, jet operators can bid and win missions that are naturally most profitable to them. Or, operators can cooperate with each other by sharing legs in an abundant market rather than compete with each other for a constrained market.

Event planners, corporate executives, travel agents, economic development agencies, and travelers of every type now have the information that allows them to access private aviation inventory for businesses and the magnificent value that it brings to communities.  That is the new market advantage.

Social Flights is proud to announce one of the most important innovations in travel since the OTA.  Our new events page allows communities to promote their events and their special attributes for free to people across the country who may want to share a charter aircraft to get there.  Our “kickstarter” feature books the trip when the seats are filled – at which point we will deliver them comfortably to your doorstep.

We call this Social Flying.

Normally, the airline decides when, where, and how you will reach your destination.   With Social Flights, communities of people tell the airline where, when, and how they want to reach your destination.  Of course, many people want to attend your event or experience the natural beauty, culture, or history of your community  - the problem is that they simply cannot get there.  That’s the problem that Social Flights solves best.

Social Flights opens up a new market for air travel

For example:

• Many events require a 3 day minimum commitment; 2 days to travel commercial and 1+ days for the event.
• Weekend travel is almost impossible with the airline system. End of story.
• Spontaneity: airline seats often book solid weeks in advance or priced through the roof within the week of travel.
• Access: many of the greatest events, most amazing sites, and unforgettable experiences are NOT near a hub airport

The following screen shot is an example of how communities are using Social Flights Event service.  Go ahead and try it, contact us here or call 615 534-4590 to participate in the beta rollout of this new and exciting feature 

Air Travel in and out of New York City Area is among the most complex in the world.  4100 flights per day squeak out of 3 major airports while all three rank near the bottom of 29 hubs for on-time performance.  Many people say that the Next Generation satellite air traffic control will alleviate the problem by allowing aircraft to fly closer together in crowded areas.  Others say that multiple modes of transportation such as high-speed rail would ease congestion.

Social Flights says, “Why fly someplace that you are not going?”

I grew up in Connecticut and have come to know New York as a magnificent city with huge importance in business, government, art, and culture. The cost of traveling into New York can often exceed the price of airfare outbound and almost always takes longer than the flight itself.  Commuting into the city from Connecticut can cost 100 dollars including parking, commuter train, and meals – and it can take 3 hours each way.  Commuters often spend more time traveling than working.  The cost of living in the city is exorbitant.

Look at the numbers

At around 200-250 persons per aircraft, 4100 flights represents between 750,000 and 1 million people per day.  The population of Manhattan is only 1.5 Million.  A significant percentage of people are actually traveling to, or from, Connecticut, or New Jersey, or Pennsylvania, and beyond.

In fact, there are 23 airports in the New York Metropolitan Area that can accept turbine aircraft.  At market capacity for each of these airports, the Social Flights Community Air Services Program could relieve the majors by 25-30% of their traffic while opening up air transportation to the millions of people who live outside of major cities and would otherwise not travel.

• Central Jersey Regional Airport (JVI)
• Essex County Airport (CDW)
• Greenwood Lake Airport (4N1)
• Hackettstown Airport (N05)
• Igor I. Sikorsky Memorial Airport (BDR)
• Lincoln Park Airport (N07)
• Linden Airport (LDJ)
• Little Ferry Seaplane Base (2N7)
• Long Island MacArthur Airport (ISP)
• Morristown Municipal Airport (MMU)
• Newton Airport (New Jersey) (3N5)
• Old Bridge Airport (3N6)
• Princeton Airport (39N)
• Republic Airport (FRG)
• Solberg-Hunterdon Airport (N51)
• Somerset Airport (SMQ)
• Stewart International Airport (SWF)
• Teterboro Airport (TEB)
• Trenton-Mercer Airport (TTN)
• Trenton-Robbinsville Airport (N87)
• Tweed New Haven Regional Airport (HVN)
• Twin Pine Airport (N75)
• Westchester County Airport (HPN)

Now, Let’s reintroduce those great ideas

Next Generation satellite air traffic control will alleviate the problem by allowing aircraft to fly closer together in crowded areas, but it also brings improved ATC to smaller airports at relatively low cost.  Multimode transportation like high-speed trains has a distinct advantage of being able to stop along a route.  For example; high-speed rail from Washington DC to Boston could carry passengers between airports not unlike trams carry passengers between terminals.  New mobile and big data applications can sort people and planes as effectively as hub infrastructure.

Social Flight knows where you are coming from

If you live in Connecticut, New Jersey, or upstate New York, you should be able to fly from your local airport to anywhere in the country. The Social Flights Community Air Service Program brings public charter air service to your doorstep and the doorstep that you are traveling to.

A visualization of Human Edits to Wikipedia where each color represents a different page

A recent article in the Wall Street Journal January 30, 2012 online edition: The Coming Tech-led Boom, identifies three technologies that will have as profound an impact on the world as electrification, telephony, and the dawn of the automobile age.

Even as we all see these technologies approaching, much like our 20th century contemporaries, most people cannot even begin to grasp the implications.  One thing is certain, industries that are unable to adapt, will not survive in their current state.

Social Flights is Flying into the next century with eyes wide open

From Wall Street Journal:

In January 2012, we sit again on the cusp of three grand technological transformations with the potential to rival that of the past century. All find their epicenters in America: big data, smart manufacturing and the wireless revolution.

Big Data and Wireless Technology

Big Data is at the core of some of what have become the most disruptive innovations of our time. Processing power, data storage, and data transmission are almost free.  The handheld device has more computing power than the supercomputers the 1970s.  The internet is moving into the cloud and away from the so called desk-top. All data is converging to a single place where it can be accessed and combined in countless ways.  Every second of every day creates an astonishing amount of empirical data that creates an unimaginable diversity of information and new knowledge.

At thge top of the food chain is Social media creating data – data does not create social media.  Data is made by people; data does not make people. People create, data does not, etc.  Likewise for most services in the next century; people will determine where airplanes fly – airplanes will no longer determine where people will can go.

A hub airport does little more than sort people and planes.  At Social Flights we use data to sort people and planes.  What if we could replace infrastructure with data? All this would take is for communities to “perform a simple calculation” among themselves.  Nothing is stopping this from happening today.  

From Wall Street Journal

The implications of the radical collapse in the cost of wireless connectivity are as big as those following the dawn of telegraphy/telephony. Coupled with the cloud, the wireless world provides cheap connectivity, information and processing power to nearly everyone, everywhere. This introduces both rapid change [and great opportunity].

Many people don’t understand how this could happen but Social Flights sees the possibility everyday, for example:  A handheld device will become the hub, the scheduling agent, the point of purchase, and the boarding pass – all with a swipe across the “reality augmented” sky.  The data already exists that can determine how many people from any point on earth intend to travel to any other point on earth and when.  Putting these data sets together creates a remarkably different landscape for air travel … and commerce in general.

Social Flights in new.  Social Flights is visionary – anyone who joins us on this voyage will be joining a revolution much greater than simply a ride sharing service. The point should be crystal clear - Social media creates data, data does not create social media.

Understand this, and you will understand Social Flights.   

A strong Commercial Aviation Industry portends a strong private aviation industry.  This article features data from Honeywell Business jet forecast which correlates with the FAA forecast for 2011 through 2031 for commercial aviation.

Social Flights was launched at precisely the right time with up-to-the-minute social technology tools and business methods for aggregating large fleets of private aircraft and building out public charter routes that can meet customer needs.

According to Honeywell Aerospace’s Annual Business Outlook, business aviation is poised for recovery beginning in 2012.  The Honeywell forecast is based on surveys of more than 1,500 flight departments around the world.

The World According to FAA.gov

The carriers have stopped less profitable routes, retired older aircraft, and unbundled services while initiating new services that passengers were willing to pay for such as WiFi.  There is optimism in the industry that the next decade will show sustaining profits as the industry continues to grow in the long term.

The 2011 FAA forecast now calls for one billion passengers to be flown in 2021, two years earlier than projected in last year’s forecast.  Growth over the next five years will average 3.7 percent per year, with average annual growth of 2.5 percent per year for the remainder of the forecast period.  The level of activity and demand is expected to eclipse those published in last year’s FAA forecast. 

Some of the reasons include stronger than expected traffic and higher expectations of economic recovery.  As such, available seat miles (the benchmark for industry capacity) is expected to increase globally by 4.5% next year after years remaining flat or decreasing.  The global market is expected to increase at 3.1% through 2031.

In the domestic market, capacity grew 2.9 percent in 2011 and is expected to grow to 3.0% in the long term.  For the regional carriers, the domestic capacity will increase at 3.8% over 2010 rates.

The average size of domestic aircraft is expected to increase to 122.0 seats from just over 121.7 seats currently. The demand for 70-90 seat aircraft will continue to grow.  The FAA expects the number of 50 seat aircraft to fall (and many will become available for lease or purchase).  The average regional jet size will increase to 54.6 seats while the average length of the trip will increase.

The profitability of all air carriers will depend on stable fuel prices, increase in demand for business travelers, and the willingness of travelers to continue to accept higher prices for less services.  In order to keep costs low, the carriers will need to better match their routes, aircraft capacity, and their markets (supply and demand).  they will need to ground older aircraft, drop low margin routes, and pressure regional carriers to accept lower fees.

 This is where social flights comes in:

All this is bad news for 6-60 passenger scheduled service. However, Social Flights can effectively join these two forecasts by providing public charter services across industries.  The weakness of one mode can be hedged by the strength of the other, and vice versa.  This makes for an excellent investment opportunity in social organization methods for air transportation pioneered by Social Flights.

There is an entire segment where Social Flights can capture market share that commercial carriers would willingly cede to Social Flights in order to keep THEIR own costs low.

The Federal Aviation Administration is more than just a dour old government bureaucracy.  The FAA also collects and publishes very important information.

This chart tells a very important story.  It says that the economy depends on aviation as much (if not more) than aviation depends on the economy.  So when Social Flights talks about private jets, it’s a whole lot more than wealthy people keeping their shoes on. Private aviation is in fact an important conduit for economic growth.  The way that we organize aviation assets such as aircraft, operators, airports, and support services can have a profound impact on a region.

For all economic development professionals:

These statistics should be stark.  If your community has air service, then the products and services that your community can trade will be 69 times higher in value than ground transportation such as trucking routes.   Yet many economic development reports treat these two modes roughly equal.

Furthermore, the market is huge; 1/2 Trillion dollars worth of products are flying over your head and 1/4 Trillion dollars worth of direct expenditure is looking down at you through an impenetrable window – EVERY YEAR.  And, that’s just the tangible value. Ideas, knowledge, wisdom, trust, influence, and experience are all extremely expensive to create on your own or by trial and error.  Yet this value is readily stored and transported in the cabins of aircraft.  This intangible value far out-weighs anything that can be carried in a truck.

What is truly surprising is that it only requires 2 million people to keep 2 trillion dollars worth of value aloft.  As such, every job that an economic development office creates in aviation, can potentially return 500,000 – 1,000,000 dollars in value to a community.  If a community is going to “buy jobs” with their taxes, they should buy aviation jobs.

Likewise, it would NOT be wise to lose control of this valuable resource to the whims of the airlines or outside corporate charter – their bottom line is not the same as yours.

Social Flights now brings a complete aviation solution to your community.  Our CASP (Community Air Service Program) can provide a community with modern aircraft, operational knowledge, and certification authority to operate your own public charter airline.  The connection is clear – airplanes equal money.  Give us a call, let us design your community air service program to integrate with your hotels, restaurants, tourism board, artistic community, and industries.

After all, that is what community is all about.

“See, you know how to take the reservation, you just don’t know how to *hold* the reservation and that’s really the most important part of the reservation, the holding. Anybody can just take them.”

– Jerry Seinfeld

Investors in Social Flights include our dedicated operators, our loyal customers, our gracious parent company, and our visionary seed investors.  So we pose the following idea with data to back it up:

Social Flights can fly non-stop service that carries bumped passengers to their intended destination on a private jet for less than the financial cost and social burden of federal penalties and traveler disruption.

This article furnishes FAA data showing that during the month of July – September 2011, a total of 12,516 people were involuntarily denied boarding (bumped) despite the fact that they held reservations. This does not include passengers affected by cancelled, delayed or diverted flights.

This number falls precisely within the scale, distribution, and unique capabilities of Social Flights. From  FAA Air Consumer Report

Social Flights is a revolutionary tool that can help reduce the volatility in cooperation not in competition with the airlines by providing fractional scale capacity that is deployable with great speed, flexibility, and precision.

The presence of a Social Flights terminal at a large airport can provide an alternative for airlines to honor the reservations that their travelers hold.  Once a group 8, 20, 30, or 50 bumped passengers from all airlines converge to a single location, Social Flights can initiate a non-stop flight.  Airlines can often anticipate overbooking with substantial advanced notice.  Likewise, an aircraft that only fills less than, say 50% of it’s seats can disaggregated into several component destinations to be deployed by Social Flights.

The ability to absorb volatility in the Commercial Airline industry using private and public charter service is an important asset to commercial airlines, private carriers, and most importantly, the traveling public.  Social Flights predicts that the Commercial Carriers will soon see the benefit of cooperating with private capacity using the social aggregation tools of Social Flights.

25% of Airline Delays Due to Volume

Have you wondered recently why air travel seems to have gotten worse but you can’t exactly understand why?  Are more people traveling?  Is the economy going gangbusters?  Is Social Media bringing the world together?

A quick stroll through the transportation department bureau of statistics is truly revealing.  The airline industry is methodologically reducing capacity AND increasing profits.  This does not make sense – how can any product sell less and make more?

For example:

The number of domestic flights has reduced from just over 10 million in 2005 to only 7 million in 2011.  This is the same number of flights as 2000

Revenue passenger miles have fallen from 570,854,623 to 473,968,295 over the same time period. That is roughly 100,000,000 less seat miles flown.

That makes sense because available capacity has dropped – seat miles have diminished from 739,841,385 to 571,129,091

Meanwhile load factors  (passenger-miles as a proportion of available seat-miles) have jumped from 77% to 83%.  Yup, that means that airplanes are a lot more crowded.

So then it should not be surprising that 25% of all delays are from overloading as airlines pull away from smaller airports and work the hubs harder.

Well, we know that aviation is a difficult business and that the industry racked up major losses but things are better now right?  The industry profits are well over 5 billion dollars.

But where is this money coming from? Well, first the reservation change/cancellation fees collected are 2.3 billion dollars in 2010 – this is the money that we pay the airlines for delivering ZERO service, seriously.  The baggage fees collected are also over 3 billion dollars. So there are $5B in fees and $5B profit…do the math.

Does anyone see what’s happening?  Can anyone see what direction these trends are headed in?  Does anyone see the alternative?  We do – the future opportunity is to build an alternate system of non-stop service using public charter certification on private jets.  If you are a traveler, set yourself free.  If you are an investor, Social Flights is a magnificent opportunity getting better every day…

Social flights continues to grow as our users finding new ways to integrate private jet service into their experience travel itinerary.  As with most early adopters, there is a larger vision driving their actions – it’s not to be “first on the block” to experience private travel.  They are the “first OFF the block” in a new form of luxury; The Time Value Experience.

Luxury does not mean the same thing for everyone and this poses a challenge for brands and product designers.  The top tier brands are learning that 45-55 year old who make up a large portion of their markets have a different set of standards when it comes to travel.

Instead of wanting to be pampered with exquisite and precision service, the new generation of luxury travel is seeking value, authenticity, and uniqueness.  They want local experiences, not a duplicate of their home in a new place.

“Value Based Driven”

via Young, affluent travelers disavow luxury defined by older generation – Travel Weekly.

Ellen Bettridge, vice president of American Express Retail Travel Network, told agents and hoteliers attending the 2011 International Luxury Travel Market conference in Cannes, France, last month. “They just know more. Everything’s at their fingertips.”

Knowing your customer’s preferences and accommodating those preferences are two different things in hi-end travel.  Creating “value” is not easy, it takes a lot of work, planning, and technical knowledge as well as follow-up and community management.  Unique experiences, by definition,  don’t come with instructions for the service provider. Competition, by definition, attacks the uniqueness of your service.  Alternatives to your service are as easy for competitors to market as for you.

One of the best ways to achieve uniqueness is to use your brand to integrate with other experience services – a local competitor may not be a competitor after all.   Think about Disneyland;  Mickie Mouse does not compete with Pirates of the Caribbean, rather, they are integrated into the whole grand experience.

If your guests will come for one 2 days, they are more likely to stay for 4 than return for another 2. Then, they are more likely to return if they haven’t “done the whole park”.  If they become comfortable with a place, they will return over and over forming new family traditions that they can identify with and share with their friends…..

Chris Sanderson, co-founder of the Future Laboratory, a London-based brand-marketing firm, asserted, “It’s not about ‘fly and flop.’ It’s about ‘find and seek.’” What makes serving this group tricky is that agents can’t fall back on tried-and-true brands, at least when it comes to accommodations. 

Social Flight is capable and available to serve any community by providing operations in public charter and private charter with modern turbine aircraft.  We have a growing clientele of vacation and resort communities banding together and taking control of the tourist experience instead of depending on outside airlines, charter operators, or tour organizers to do it for them.  Make the “Time Value Experience” your Brand image and make Social Flights your airline.

People are accusing Google of using it’s vast coverage and near universal brand to take unfair advantage of the “search and sell” industrial complex.  When people type in; “San Diego to Charlotte Flights”, Google instantly provides the cheapest  flights for that search criteria.

Google also provides a handy link for “more Google results…”  After that, lesser aggregators such as Expedia and Kayak appear lower on the page. Of course, the vanquished can pay Google a fee for the benefits that any advertiser would gain…

Who is anti-competitive against whom?

So is Google engaging in anti-competitive behavior, after all, they are both the judge and the jury on who shows up where on your screens? Well, maybe not, all they are doing is “intercepting” general search inquiries with their own products.  It’s awkward, but not necessarily illegal or anti-competitive since Google provides links directly to the airline site and does not book the seats on their own site like Expedia or Orbitz.

On the other hand, airlines pay travel sites 11 dollars for a booking that would otherwise cost them only 1 dollar through their own site – they prefer the Google hit over the travel site hit.  Furthermore, travel booking sites rely on Google for 20% of their business so any slide in ranking means real money is sliding down with it – so they hate it.  The airlines love it because it gets the traveler off the third party sites where stickiness is a rumor at best. All of this friction is worth 17 billion dollars per year – friction removed from a system is obviously in the best interest of the consumer, Right?

Ref Google’s Flight Search Sparks Antitrust Fears |.

The thing that everyone is missing is that none of the current players in online travel agency businesses are aware of a significant opportunity within the private aviation space.  The Google quotations are made on a dollar ranking not a “Time/Service” metric.  It remains extremely easy for an airline to game the ranking by hiding fees outside the fare quotation.  It is also easy for the airline to underprice a few seats to pull the customer on to their site where they block out the better seats.

So, what is the opportunity are we talking about in private aviation at Social Flights?

1. Aggregating open seats available on more than 15,000 private aircraft flying everywhere
2. Making these seats available and transparent to the public for purchase as an alternative to the broken and anti-social commercial air service
3. Enabling fliers to self aggregate and for direct flights from communities with no service to destinations they have in common
4. Lowering the cost of private aviation by selling unused or under utilized assets, open seats