Plane Conversations

4 in a 4 part Series:

In the previous posts in this series, we discussed the gaps in Price and Time between Private Aviation and Air Mass Transit travel.  This time we are going to look at the gap in customer experience.

It is easy to measure price in terms of actual dollars and in terms of the value of our time, which we can use as an offset of the price gap. The more difficult gap to measure is the difference in the experience of the two forms of travel. To date, I am not sure if anyone has been able to accurately quantify the difference in the traveler’s experience. The ability to measure the traveler’s experience on either a private aircraft or an airline and compare that to the alternate experience, would give us a more meaningful comparison between the two.  That comparison could then be quantified and translated into a monetary measurement, which would go towards offsetting the price gap.  I believe that offset would be a valuable tool in selling private aviation services.

Here is what we know for sure!

Those who have experienced private aviation as a form of travel often justify the high price by speaking of the better experience as opposed to traveling by air mass-transit.  Call it the Hassle Factor of the airlines: the anti-social behavior of the passengers we share space with in an airliner, the rude treatment we sometimes receive, the lack of control over where we go and how we have to get there, the uncomfortable feeling of being compressed into a space that is measured in inches of seat pitch, the food served (or mostly not served) on the planes, the baggage abuse (bags don’t have feelings but I don’t like my stuff being abused) and on and on……

You get the point.

Stack that against the experience of private aviation.

Not one single person I have spoken to in 28 years of being in this business has ever said to me, “I can hardly wait to go back to traveling on the airline since I can’t afford to travel in a private aircraft anymore.” Not one. Every aircraft owner, charter customer or private pilot / aircraft owner pilot cites the better experience of flying by private aircraft as the number one reason to close the price gap. They don’t know how to quantify it but they know what they know. How good would it be for our industry to develop a tool that measures the experience, quantifies it and then translates it into dollars?

As consumers, we purchase experience with our hard earned money every single day. We pay more for an iPhone than for a Blackberry because we like the experience. We ride in a luxury car rather than in a compact car because of the experience. Both serve the same purpose since we arrive at the same time regardless of the type car, but what a different experience to ride in a nice driving, luxury car as opposed to a compact.

If we can ever measure and quantify the experience and then communicate that measurement to the market we might be able to come a long way in bridging the price gap that has prevented the many from experiencing the joy of travel by a mode that the few have become accustomed and maybe even addicted to!

Highlight any portion you want:

In 2001, Atlantic Monthly national correspondent and best selling author James Fallows wrote a book called “Free Flight: From Airline Hell to a New Age of Travel”. I got a copy as a gift from a friend and, as an aviation insider, read it with great interest. Plus, I love the title which, after nine years, is still relevant.

When he wrote the book, he focused on three innovations that he predicted would revolutionize air travel by providing private air transportation to the frustrated airline traveler at rates more people could afford. Pulling the book out of my cabinet at the office and knocking the dust off, I revisited what James Fallows had to say then and compare it to where we are today.

What were the three innovations?:

1. Cirrus and the Klapmeier brothers who dreamed up the idea of a single engine aircraft with a parachute system for that extra measure of safety.
2. Eclipse Jet and Vern Rayburn who brought the term Very Light Jet into the conversation of business aviation.
3. NASA who encouraged innovation in aircraft design and the development of free flight which allows aircraft to go directly from Point A to Point B saving time, fuel and traffic congestion of highly traveled airways.  This was under the NASA’s Small Aircraft Transportation System (SATS) program. The idea was to make personal flying closer to the automobile experience – safer and easier to be within reach of more travelers allowing people to bypass the air mass-transit system in favor of going from small airport to small airport.

In the last nine years, how did James Fallows’ case studies fare?

To date, Cirrus has manufactured and sold more than 5000 aircraft and has been the number one, best selling aircraft in the past decade – not bad for a start-up company with a non-conventional design. Like other aviation companies, Cirrus has been severely impacted by the economy but will survive in some form. The aircraft has been too successful and the market will continue to demand new models with improved technology.

Eclipse ran the long race to certification and actually made a few Eclipse jets before passing out at the finish line. Eclipse didn’t make it; but, urged on by the innovation, Cessna and Embraer were able to come out with the Cessna Mustang and the Phenom 100, which are here to stay.

Cirrus proved the SATS concept by bringing a whole new user of private aviation into the fold and, today, more people are flying small aircraft. No one knows the exact number, but many Cirrus buyers were first-time aviators who were convinced that they could learn to fly and safely pilot the Cirrus aircraft wherever they needed to go for business or pleasure. Flying is still not as simple as driving, but, every year it gets easier and safer due to the technology of the modern cockpit. One day it may be the George Jetson story!

Somewhere in the story was the hope that airline delays and traffic congestion problems could be solved by technology. Today, the talk is of Next Generation Air Traffic Control Technology (NexGen) which would help; but, the problem of “ Airline Hell” has still not been solved. If anything, it has only gotten “hotter” (worse). Today, nine years later, there is more frustration than ever before with the airline system. The solutions are out there but have yet to be implemented. In 2001 Web2.0, Facebook, Twitter and LinkedIn had not been dreamed into existence. So, is the solution an aviation solution or does it come from technology?

Highlight any portion you want:

When it comes to air travel today, no one enjoys it.

Is There A Better Way?

Watch the video below and give this alternative some thought the next time you think about using a commercial airline. This alternative would have enabled me to go to New York City and back within the same day.  Total travel time would have been roughly five hours instead of 18.  And it would have cost me less!

Highlight any portion you want:

In a country that has to rely on purchasing oil from other countries who support terrorism and in general are not our friends, how good would it be to have a solution for jet fuel that can be derived from domestic sources?

In the past year, as I listened to CNBC financial news, I continued to hear that there is enough natural gas in the United States to power our transportation systems for generations. Most everyone agree that natural gas is a cleaner solution. Exxon has made a major play into the natural gas market and they don’t buy into a product competitive to the oil interests just to be nice guys.

Shell Oil has found a solution that is being tried out by Qatar Air in the oil-rich Middle East. Jeremy Howell of the BBC reports on that in the link below. What about this solution for energy independence for the United States? Jet fuel energy independence for the United States with a product that is even more environmentally friendly than the current jet fuel. So, all of my green friends can have something to feel good about, as well! Until the electric or nuclear powered jet comes along, a cleaner-burning and domestic sourced fuel for aviation in the United States is a huge improvement. Good for the environment, good for the economy, and good for the long term security of this country!

Highlight any portion you want:

So our President and other world leaders and environmental scientists met in Copenhagen trying to figure out how to keep the world from melting down from all of this carbon we are emitting that warms the planet up.

In a Fox News story on this issue Brian Wilson reports the following:

If the U.S. fulfills its pledge to shrink greenhouse gas emission, the carbon dioxide reductions will force a host of unintended consequences on a major sector of the U.S. economy — the travel and tourism industries.

The Environmental Protection Agency underscored the threat of greenhouse gases when it released its so-called “endangerment finding” on Monday, outlining public health risks associated with carbon emission. And the Obama administration has pledged to work closely with Congress as its looks to pass clean energy reform legislation that will eventually lower carbon gas emission by more than 80 percent. But the sweeping effort to curtail greenhouse gases may come at a high price to the U.S. economy — including big cuts to the travel and tourism industry, higher airline prices and a potential increase in taxes on air travel.

“The European diplomats who all who flew over to Copenhagen are the excepted class, as is Al Gore,” Ken Green, an environmental scientist with the American Enterprise Institute, told Fox News. “But the rest of us are not supposed to fly, and so they’ll be raising your ticket prices and putting restrictions on flying that make it more difficult.”

Green said airplanes face a particular challenge when it comes to reducing carbon dioxide emissions. “The impact on passengers is going to be higher ticket prices. If you try to cap carbon, and the airlines have to buy emission permits from other sources that could reduce their emissions, they’re going to pass that cost along to consumers.

I understand the need to innovate transportation forms and reduce the carbon emissions. If not for the planet, at least for the sake of energy independence. I don’t like the idea of having to buy jet fuel for our aircraft knowing that a big percentage of it came from countries in the world who sponsor terrorism with the dollars we send them for their oil. Energy independence for this country would be a great accomplishment.

I do, however, find it slightly hypocritical that all these leaders and environmentalists show up to the meeting in their private jets. Aren’t these the same leaders who criticized the CEOs from America’s Big Three automakers showing up in Washington, D.C., looking for government bail-out money?  Isn’t it the same kind of thinking?  As Ken Green says in the article above, I guess they are all excepted from the new order since they are better than the rest of us?

In a report from the Pew Research Center and the Department of Energy, the research indicates that transportation accounts for 27% of Greenhouse Gas Emissions in the United States. Aviation accounts for 10% of the 27% which tells  me that aviation is 2.7% of the entire problem. Highway vehicles account for 72% of the problem in the transportation segment. So why is aviation at the top of the list of targets for reduction in greenhouse gas emissions? What do they know that we don’t know?

Eventually aviation will have to pay its fair share on this issue but these leaders needed to understand that innovation in aviation, due to the complexity of the flying machine and the high costs of developing new propulsion technologies, will happen slowly, in small increments and at a high price.

In the mean time, we all have to make a living, and people need to travel, including these elitists who have to travel around the world to meet and talk about how they are  going to save the planet. In a country with 10% unemployment, they need to think long and hard about how they regulate the rest of us so that they don’t put us all out of work while saving the planet.

Highlight any portion you want:

Part 4 in a Series on Social Media and Business Aviation: Written In Collaboration with Jay Deragon

Over the past few weeks I have posted several articles on social media – the new method of communicating to the market. I am an admitted novice in the world of social media and technology, but my eyes are starting to open to the possibilities created when social technology and business aviation collide.

We have discussed the opportunity social media presents to fight the war the airlines have declared on general aviation by getting our message out in an unfiltered way.  We have also discussed social media as a means to increase our visibility to the market as well as to communicate with that market in order to innovate and better meet its needs on its own terms. All of these are game changing strategies.

So now I want to ask some what ifs!

What if there was a social grid or network built for the purpose of becoming the e-marketplace for private and business aviation travel solutions? What if this social network allowed, encouraged and facilitated the market to come together to aggregate a demand that is currently outside of the supply that  traditional channels of distribution make available to the market?

What if the market could then go to the suppliers of private aviation and request trips or routes of travel where individual travelers could buy seats, filling the aircraft, driving the price down?  Maybe the price would still not be as low as mass transit airline travel, but still would be much lower than today’s pricing of private aircraft flights.

What if travelers could input their travel profiles into the social grid in such a way as to speak to the entire market and to form affinities around common travel patterns? Would travelers be willing to share their travel  information with the market in a profile, sharing where they go, when and how often? Would travelers talk to each other about their travel needs if those conversations led to more new, innovative and efficient travel solutions than have ever existed before?

What if all air charter providers and small scheduled airlines (niche airlines) could input supply into the grid, including empty legs?  What if on-demand charters were quoted instantly so that the market had real time visibility to the solutions they need? What if all of these suppliers could participate on a level playing field and in a system that costs the users only when a transaction takes place?

What if the other parts of the business travel supply chain were able to participate as well? Would the hotels, resorts, rental car and limousine services have an interest in participating in the grid?

What if private aviation operators could collaborate to create a bigger market?  What if we woke up someday and realized that we’ve been monopolized by technology controlled by some organization that isn’t even in our business? What if we all created a new collective “social grid” in which the general market of travelers realized they could use our system rather than the old commercial system?

What if we could collectively reinvent ourselves as an industry with the aim of serving the larger market? What would be required? Who would agree to collaborate? Who would agree that if we don’t, someone else will?  And we’ll all lose when we should have been leading all along?

If we could simply start to build a dialog around all of these questions what could we do? Should we do it? If not, then let’s not even try to answer these questions.  Let’s keep doing what we’ve been doing. Einstein once said “insanity is doing the same thing over and over and expecting different results.”  What happens if we all decide to be sane?

If you think we need to do something else then join me and invite others to join us in creating a new future where we can all win.

Who will jump into the dialog? Who will invite others to do so as well? Is there anyone out there?

Where are the answers to all of these “what ifs”? Could they be out there in the market of conversations that could create the new system that creates the answers?

The answers are out there in the minds of people wanting to create a new future. Are you one of them?

Highlight any portion you want:

As of yesterday afternoon Embraer’s Phenom 300 gained full certification by the United States Federal Aviation Administration. This follows the Brazilian’s counterpart to the FAA – ANAC certification that happened a short two weeks ago.

I posted some of the basic performance numbers on December 8 when I said that I believe this aircraft will be a game changer for the charter industry over the next few years. Excellent performance, low operating costs and hopfefully the reliability that Embraer has been able to achieve in the airline world will make this aircraft an industry work horse for a long time to come.

Two, clean sheet design, new generation jets (Phenom 100 and Phenom 300) certified, in production and being delivered in the past 13 months is a pretty good launch into the world business jet market.

Congratulations to Embraer on US Certification of the Phenom 300!

Highlight any portion you want:

On December 3rd, Embraer announced the certification of the Phenom 300 by ANAC (Brazil’s version of our FAA). That means only days before our FAA certifies the aircraft as well, since the two agencies work together closely in the process of new aircraft certifications.

Embraer’s website has published the performance numbers for the aircraft and not only are they are impressive, but also have exceeded expectations in all areas.

Here are the basics:

• Maximum cruise speed: 453 knots (521 mph)
• Maximum range with 6 occupants: 1,971 nautical miles (2,265 statute miles)
• Takeoff distance at maximum weight on a standard (59° F) day at sea level: 3,138 feet
• Landing distance at maximum landing weight sea level: 2,621 feet
• Service ceiling: 45,000 feet - and it gets there in 26 minutes!

Over the past three decades as new aircraft have come into the market, those of us in the business have looked at the numbers and compared them against the aircraft we know.

Every aircraft seems to have some compromise in performance.  One aircraft will have good speed and range but needs a longer runway. Another aircraft may be able to takeoff and land on shorter runways but will be slower in speed or have less range. Some aircraft have limited range when you fill every seat. You can’t have it all in one package….or can you?

It appears that Embraer has built a no-compromises aircraft that gives great speed and range with the ability to fly out of almost any public airport in the United States, including those challenging high-altitude airports in the Rocky Mountains, like Telluride, Colorado. In fact, you can take off in a Phenom 300 from Telluride airport at 9,078 feet elevation and go non-stop to any other city in the United States.   

Our business (CFM) has operated the Lear 35 series aircraft for over 15 years, and they are the workhorses of our fleet. Prior to that, the Lear 24/25 series aircraft was the workhorse. When they were produced throughout the 1970s and into the early 1990s, these aircraft were the no-compromise aircraft of their day.  For the most part, you could fill up the tanks with fuel and the cabin with passengers and go. They did like a little more runway than the Cessna Citation series aircraft, but the Lears were faster.

For years, we have wondered when someone was going to make an aircraft that would eventually take the Learjet’s place. I believe Embraer has done it with the Phenom 300. This aircraft provides true jet speed and operating altitudes, excellent range for transcontinental trips, great fuel economy and low maintenance costs of new-generation design all in one package.  The aircraft has a 35,000 hour life limit, which is close to an eternity in the corporate and charter use environment where aircraft average 400-500 hours per year. You can tell the Phenom 300 was built by a company that builds durable and reliable regional airliners.

So, congratulations (or felicitações) to Embraer for bringing another great aircraft  into the market at a time when a lot of manufacturers are wondering how to survive this economy. I have a feeling we will see Phenom 100s and Phenom 300s in a lot of charter fleets over the next few years.

Highlight any portion you want:

Historically strategies were created based on assumptions made about how the markets respond and to what. The aim of a strategy was to create market differential, awareness and value that the market would respond to.

“Clients of an organization, whether they are citizens or customers, now have ready access to these tools. For all the supposed decisiveness of managed organizations, by relying on legal and PR departments to respond, most companies now react more slowly than their customers. In the new world we’ve entered, you can only stonewall things on your side of the wall, yet most media is no longer on that side of the wall.”

Strategy is Now Driven From the Other Side of the Wall

Creating a road map of how your organization will succeed is now a process driven by the conversations from the market. Previously strategy did include an assessment of the market but limited by the perspective and terms of how one defines “the market“. The definition of market has changed in that consumers and business are now engaged in defining the market more than ever before. The definition and sentiment of a market are being framed by real time conversations about anything, everything, anyone and everyone.

Market sentiment used to be contained within the walls of a corporation. Complaints were reviewed as were compliments. Compliments were added to the marketing mix while complaints were buried until results reflected the need for change.

Today both complaints and praises are in real time and out in the open for everyone to see. Anything placed on the web enters the digital library and the more content that references your business the more visible it is the Google. The higher the visibility the easier it is to be found by others.

Before making a purchase or taking a job what do people do? 95% go the web to gather references and intelligence. Said references and intelligence are no longer driven by your media rather they are driven by media created by your market.

If you understand the power of a network then you know that three satisfied customers may tell three friends and those three friend may tell twenty seven then you know the power of the coice of the customer has just been accelerated by the web. The same is true about angry customers. One angry customer can reach 3,000 people at the click of a mouse. Those three thousand can reach over 100,000 given the power of networks.

The web works based on a rate of change and a rate of interest. Which gets you the highest rate? Satisfied or angry customers? Do the math.

Strategy is critical for any business but if you are following old strategic methods then you will fail critically. Today failure is instantaneously spread at the click of a mouse. The markets of conversations spread faster than most organizations can react. Building a strategy from the outside in is vital to your future success. When markets change so must your strategy. Much has to change starting with your thinking. Get it?

Highlight any portion you want:

Gulfstream General Dynamics recently rolled out the new G650 and will begin test flights for certification before the year’s end.

This aircraft is an all-new design (clean sheet) that employs the best technologies Gulfstream and this country have to offer in creating a new generation global jet.

With all the negative press and bad political rancor about the use of big corporate jets, it would be easy to dismiss the G650 roll-out as the production of just another aircraft to meet the needs of the few business and superstar elites who have the money to buy it.

However, the introduction of this aircraft is so much more than that.  It deserves a standing ovation from the press and from the American public.   For starters, in a time when manufacturing jobs are being shipped overseas, this aircraft will be produced in Savannah, GA. I don’t have the exact number of anticipated future orders or the locations of the G650 customers, but given orders on previous models, it is safe to say that international companies and individuals will place at least 50-60% of the orders.  This translates into trade deficit reducing exports and economy supporting jobs for the US.

The performance and mission capabilities of the G650 will be unsurpassed by any other aircraft.  It will have a non-stop range of 7000 nautical miles and cruise at speeds .92 mach( 92% of the speed of sound) in high-speed cruise.  No other business jet in production can match this performance.  The cockpit will employ the latest generation technologies to make the aircraft safer and more efficient.

Since Gulfstream has a reputation as the premier manufacturer of long-range corporate jets with fantastic reliability and worldwide support, multinational companies and governments worldwide will use the G650 in civilian and military service.

Globalization is here whether we like it or not. Governments and multinational companies alike need to reach the rest of the world quickly. Some of our country’s greatest companies are now operating all over the world and need to reach their markets, suppliers and manufacturing facilities to make their businesses more efficient. It is a fact that travel is a necessity and not a luxury for businesses and governments.  The G650 will be the next generation aircraft to make worldwide travel happen.

Those of us who have  grown up in this business have all admired Gulfstream since the GI first flew in 1958.  I applaud the group of people at Gulfstream who have taken the G650 from the drafting table to the tarmac.  These people represent our country’s best in corporate leadership,  innovation, engineering and manufacturing.  Designing a new aircraft from scratch and taking it to production is not for the faint of heart.  The process takes years of work and, in some cases, billions of dollars.  Those who make the decision to design and build a new aircraft have to look years into the future to understand demand and long-range return on investment. The designers of the G650 had a clear and exciting vision that is resulting in the aircraft that is clearly the new top of its class in corporate aviation. The other guys will now have to play catch up!

Highlight any portion you want: