Plane Conversations

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.

Starting in 2004, UPS began systematically saving money on fuel and reducing emissions, in part, by planning their routes and reducing the number of left turns in them.  About 15 minutes after the policy was first reported, the first skeptical “Bah!” issued forth.  The report was taken to mean that drivers were instructed to make only right turns, which is inaccurate.   Routes are planned to reduce the number of left turns (in countries that drive on the right-hand side of the road), thereby reducing the amount of time spent idling in the turning lane.  Other interesting measures were put in place, as well; so, the exact dollar amount of savings attributed just to right turns is hard to quantify.  Still, the increased efficiency and lower fuel costs are easy to see.  And, none of the measures were rocket science, really, just simple, common sense practices used to save money.

NextGen ATC has the potential to act like the route planning software that UPS uses, allowing aircraft to fly more direct routes, thus saving time and fuel while reducing emissions.  However, as we’ve previously discussed, that program is stalled while most of the parties who will benefit from it bicker over who will pay for it.  In the interim, Alaska Airlines is testing some other programs in their Greener Skies project at the Seattle-Tacoma International Airport, one reason the Wall Street Journal  named the carrier the most fuel efficient in the country.

Using satellite-based guidance technology (Required Navigation Performance or RNP) that they pioneered , the carrier has tested its use in landings.  Using the technology with a continuous descent or optimized profile descent (OPD), the aircraft can descend from cruise altitude to runway using a shorter flight path and lower power.  What they found by using these principles is that they reduced their landing fuel-burn by about 35%, which translates to about 400 pounds or 60 gallons per event.  The carrier estimates that they could save 2.1 million gallons each year by using this system.  On 13 August 2010, Jet-A prices ranged from $4.72 per gallon in Smyrna, Tennessee, to $6.98 in Boston.  While carriers don’t buy their fuel at those prices, you can still imagine the huge amounts of money that could be saved. 

The more direct flight path and lower power do more than result in just lower fuel-burns.  Those lower burns translate into lower carbon emissions and lower noise levels.  According to the Seattle Post-Intelligencer, Alaska Airlines estimates an emissions reduction of “22,000 metric tons each year, the equivalent of taking 4,100 cars off the road.”  And, of course, a more direct route sends aircraft over fewer homes and lower power means less noise for those homes still in the approach path.  That’s great news for busy airports’ neighboring communities that are concerned with noise and air pollution levels.

A great many of the aircraft currently flying already have the technology to use these same procedures.  ATC has to catch up and redesign the approaches to make the best use of the technology, equipment and procedures.  The potential good the aviation industry can realize by the more efficient process is enormous.  With decreased costs, the industry can produce a healthier bottom line.  And with decreased air and noise pollution, we can all breathe a little deeper and sleep a little more peacefully.

As I’ve mentioned before, my father is a forester and he has always said that there are no better conservationists than his colleagues.  If they don’t take care to preserve the natural resources, foresters work themselves right out of a job.  If you harvest a tree, you plant one in its place, keeping the supply renewed and the resource in balance.  Compared with this “if you use it, you replace it” philosophy, buying carbon credits has the feel of hiring a penitent.  In theory, environmental or moral transgressions are atoned.  And, while I suppose hiring someone to offset one’s carbon footprint is better than doing nothing, that emperor still appears naked to me. 

The transportation industry, in general, and the aviation industry, in particular, has an enormous carbon footprint.  For years, the industry has sought to reduce costs by increasing fuel efficiency, enjoying reduced emissions more as a happy by-product than an actual goal.  Recently, however, there has been something of an ideology shift.  I don’t know that anyone is willing to increase costs to decrease emissions, but certainly, more players in the industry are willing to see cleaner burning, sustainable fuel as a goal in itself.  The shift from “wouldn’t it be nice if” to “how can we do this” can be seen in the developing partnerships.  These aren’t mad scientists cooking up fuels in their garages.  These are Boeing, British Airways, Rolls-Royce developing fuels or partnering with visionary companies like Solena, Solazyme and Honeywell’s UOP.  Big money and big aviation experience are teaming up with big innovation to do something good for both our industry and our planet.  We use  fuel resources and air; and, we are nearing a time when we can renew the one resource while lowering pollutants in the other.  It’s no wonder excitement is growing. 

Flightglobal reports that at the recent air show in Farnborough, England, Richard Altman, executive director of the Commercial Aviation Alternative Fuels Initiative went so far as to say that current technologies “can contribute on a significant level to achieving carbon neutral growth – it’s happening and it’s happening now.”  And it’s happening from different sources.  On March 25, 2010, a United States Air Force A-10 flew its first flight using a blend of conventional JP-8 jet fuel and biomass fuel derived from the camelina plant, like those fuels produced by Alt-Air and Sustainable Oils.  As we discussed on 26 May, Brazil has a dynamic bio-fuels industry currently based on ethanol production from sugar cane. Darpa and others are closing in on an economical process to produce jet fuel from algae.  And Honeywell’s Green Jet Fuel (a blend of fuels from algae and used cooking oil) was used in the first biofuel-powered helicopter flight by the Royal Netherlands Air Force in June. 

The majority of news reports in the United States for the past three months have been stories on the catastrophic oil rig explosion and subsequent spill in the Gulf of Mexico.  China saw a Yellow Sea oil spill of nearly 28 million gallons around the same time.  As I watched those reports, I kept thinking of the progress in bio-fuel production.  Imagine how algal fuel production would eliminate the possibility of such a disaster – how months of clean-up and decontamination could be replaced by a flock of ducks.  Now, you’re really talking carbon neutral and that emperor’s new clothes look good.

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!

Expected is what has always been and is.

Unexpected is what has never been, but if done, changes the entire market.

Our industry tends to operate in the realm of the expected. We expect business aviation to be expensive relative to other forms of air travel, and so it is. Have you ever heard the saying “if you have to ask about the price you can’t afford it”? When you get to a certain level in business aviation that saying applies in some mindsets.  

We assume that the market is limited by serving the upper echelon of business travelers and the elite celebrities who place the highest value on their time and privacy.

We project demand based on expected models of utilization of business aviation that are tied to the current expected demographic of the user.

Aircraft manufacturers spend billions developing aircraft and then set production levels for that “expected” demand, and seemingly don’t spend much time or money on disruptive innovation models of how their product might be used.

Introduce a recession like we have just experienced and throw the demand models out the window with the expectation that maybe it will get better in a few years.   

So how do we create the unexpected with disruptive innovation that changes the market.

It is done every day in other industries and it has even been done in the airline industry, which is not well known for positive innovation these days.

Almost 40 years ago a little airline in Texas called Southwest took on the legacy carriers with a new model that profitably delivered the seat at a cost to consumers that no one else could emulate for a long time. By doing so they changed the way people travel. They didn’t just take customers from their airline competition. They created a whole new market of air travelers who had been driving or taking the bus. And they did it, and still do it, with the same Boeing 737 that other airlines were using?  

In the 1980’s a guy running an aviation company in Ohio came up with a new idea about selling fractions of jet aircraft to increase the market of jet owners. He succeeded to the point that Warren Buffett bought his business. And in doing so he brought literally thousands of new users into the world of business aviation. 

In both cases it was the same hardware (aircraft) everyone was using but the innovative business model that made the difference. 

Who would have ever expected that Apple would sell 100 million iPhones or millions of a new computing devise called an iPad in a matter of months? Apple doesn’t follow, they lead, and they do so with disruptive innovation. Everyone else follows.

So if we want to continue in an industry with little or no growth, we can keep up with the expected models of business. Or we can do the unexpected and come up with innovation that disrupts the way travel is done with business and private aircraft and create a whole new market.

Is it worth thinking about?

A key component in the growth of our industry is the availability of capital to finance aircraft transactions. Businesses who want to own or operate their own aircraft for business use, as well as commercial operators like our company that use aircraft for charter, all need sources of capital to purchase and or lease aircraft.

The near collapse of the banking industry that started in October 2008 with the collapse of Lehman severely dampened the ability for buyers to finance or lease aircraft. Too many deals fell apart for the lack of financing.  Deals that would have been “no brainers” a few years ago and still make sense today just could not get done. Aircraft manufacturers have seen wholesale order cancellations as financing fell apart. Maybe some of these deals did not make sense in a new economy but it seems the banking industry just walked away from aviation.

Many regional banks have exited the aircraft financing business entirely leaving a big void for the demand for businesses that need to finance aircraft for their business needs.

Some specific financing markets, like aircraft floor plan financing for aircraft dealers, have dried up completely.

In order to bring value to the readers of Plane Conversations I have invited friends of ours, who have recently started a company called US Aircraft Leasing, to contribute posts to our site with discussions centered on what is happening in the world of aircraft financing and the aviation capital markets..

The founders of USAL, Bob Fisher and Edward Jackson, are both successful businessmen living here in Nashville TN. Both are experienced pilots and have owned and flown their own business aircraft and personal aircraft for 20 plus years. Their perspective is well rounded with both financial and general aviation experience.

Edward was one of the founders of Capital Bank and Trust in Nashville TN, a bank started in 1993 that grew to 7 locations before selling to Renasant Corp in July of 2007. He has over 25 years of banking experience and was in charge of aircraft lending at Capital.  Edward also spent 23 years flying C-130’s for the Air guard here in Nashville before retiring in 2003. 

Bob Fisher’s background includes current ownership of another aircraft financing and leasing company, Jet Finance Group, as well as a successful career working in venture capital and M&A areas of finance.

I welcome their input to Plane Conversations in the area of aircraft financing and leasing. As the market starts to come alive again it is essential to have innovative solutions to capitalize the aircraft that our industry operates.

Business aviation has taken a beating in the past two years.  While we are now seeing some signs of recovery, we must remember that those signs do not constitute prosperity. We can blame industry difficulties on the government or on the economy, but the reality is that we need to quit following the old business models. In many areas, we are doing things today just as we have for the past 30 years.

If we look to the technology sector of our economy as a possible success story to emulate, we see a constant flow of innovation in the market. Computing technology gets not only faster and more productive by the day, but it also gets cheaper. Social Technology has taken on a life of its own with changes happening faster than even the social media gurus can keep up with.

Those of us in aviation know that we cannot change or innovate as fast as the technology sector of this economy. Or can we?

When it comes to the aircraft design and regulation compliance that make our industry safer, admittedly we cannot go any faster than the government allows. New aircraft designs are also limited by the allocation of capital and have long cycles from initial investment to development to payoff. The tech sector can crank out new smart phones every six months, but we can’t just crank out new jets that fast.

Aircraft design and safety compliance timing may be out of our control, but that should not stop us from innovating.

Innovation starts with conversations. Doc Searls coined the term “the market is conversations” in his 1999 book The Cluetrain Manifesto.  With consumers self-aggregating and expressing intentions online, why can’t we engage in the conversations and meet those intentions?

We need to expand our market by engaging the larger audience of travelers in conversations about the value proposition of business aviation and even leisure travel by private aircraft. It starts online these days and ultimately moves to face-to-face contact.

We also need to challenge our market and our industry to start conversations on how to deliver business aviation at a reduced cost. The solutions must come from the entire supply chain, with everyone involved in business aviation as a part of the solution.

I have yet to hear anyone say they would like to go back to riding on the airlines after experiencing travel on a private aircraft.  What I have heard, hundreds of times, is that they can’t afford what we offer; so, they grudgingly go back for more of the misery of air travel by mass transit.

What are we going to do about it?

Airlines versus the Private Aircraft

Comparing travel by airlines to travel on private aircraft is like comparing travel by train or bus to travel by automobile.

One mode of travel can not meet all the needs in this country.

Travel by train and metro rail systems works great in and between major cities in densely populated areas of the country.  However, for the majority of the United States landmass, it is non-existent since population  density and the geographical distances between cities make it impractical to build and operate.

So we have the personal automobile and we always will. It may be in a different form one day – all electric or a hybrid of different energy sources – but we will still have it. Even in the cities with mass transit, the personal automobile or the communal automobile (taxi) still serves an important function of on-demand point-to point-travel.  

What is so different about the use of private aircraft for business or personal travel and using the airlines? The airlines seem to be migrating towards a form of mass transit system that primarily serves the travel demand between dense population centers domestically and internationally. Today, there are fewer, not more, cities served by airlines than just a few years ago.  

As airlines have shown no desire to fly in small market cities in this country, the void of scheduled air service to and between small cities grows.

We all fly because it gains us time that we can use on one end of the trip or the other. In the absence of air mass transit between cities, the air travel solution for small markets is private and business aviation. There are currently no other solutions.  

Will we ever give up the automobile totally in favor of the train? Probably not anytime soon, if ever. We will, however, get more efficient versions of the automobile.

And so it should be with private aircraft. Let’s make them more efficient and use them more efficiently.

Those in this country who see the private aircraft as a luxury mode of travel need to understand that, just like the automobile, the private aircraft, in all its variants, is an efficient mode of transportation in this economy – especially for those of us who have chosen not to live in the big city. Because we don’t have access to the metro rail and the 500 scheduled flights a day at an airport nearby, we need our cars and small planes to connect both locally and globally.

UAVs and the Future of Aviation: Crash and Burn or Taking Off to New Heights?

There has been a lot of discussion in the aviation industry recently regarding the imminent operation of Unmanned Aerial Vehicles (UAVs), called Unmanned Aircraft Systems (UASs) by the FAA, in the National Airspace System (NAS) and their impact on the safety of manned aircraft operations. However, there has been little attention paid to the economic impact of UAVs on the aviation job market.

Some pilots are concerned that widespread use of UAVs will reduce the number of pilot positions that are available and do further damage to an already weak job market. There are also other considerations such as whether or not UAVs will be maintained by licensed A&P mechanics or a special UAV technician. If manned operations become unmanned, there is a popular belief that the aviation economy as a whole may be damaged.

In actuality, the fears of UAVs having a negative impact on the aviation industry are most likely unfounded. The FAA has stated that UASs are civil aircraft in accordance with 14 CFR §1.1 and are therefore required to be operated by pilots certificated under the requirements of FAR Part 61. In addition, the aircraft will also have to be maintained by FAA certified technicians. Since these regulations apply to UAVs in the same manner as manned aircraft, it is likely that demand for pilots and maintenance technicians will only increase with the introduction of UAVs into the NAS. Beyond the need for airmen, UAVs will open up new jobs for engineers, avionics technicians, flight test personnel, and communications experts. Also, many new types of aviation operations will be possible with the use of unmanned aircraft and such an expansion of aviation can only lead to a boost for the aviation industry.

In 1907, Dr. Heinrich Koppers built the first ovens to recover byproducts from coke used in steel production.  In 1930, the Koppers Company began treating wood with the byproduct creosote and their forest products division was born.  My father worked for that company; so, I was fascinated that telephone pole and railroad cross-tie production got their starts from the steel industry.  Nearly 75 years later, Jason Fried and David Heinemeier Hansson of the Chicago-based software company 37signals have just published Rework, a book outlining how that same concept  has made their business an international success.

In their book, the authors assert that every business creates some kind of byproduct - that it’s impossible to make just one thing.  They encourage businesses to look for those byproducts and to see them as new opportunities.  Their first byproduct was a software program built for internal use which became a popular commercial product.  For private aircraft charters, our largest byproducts are empty legs and empty seats. 

How do we take those and turn them into commercial products?

There are any number of services out there that will list a carrier’s empty legs and offer them up for public sale; however, as most charter operators will tell you, matching an available empty leg to a flight request is quite a trick.  Because the percentage of matches is so low, for many years, operators simply ignored the byproduct altogether.  The emergence of the charter broker changed that.  Brokers saw the potential of empty legs and worked hard to find ones that matched their clients’ requests, sometimes to the frustration of charter operators.  Many operators resisted the trend and, to this day, many view it unfavorably; however, the fact is, that because brokers aggressively sold this byproduct long ignored by operators, the market base for private aircraft charter has grown.

While many charter “purists” would like to put the genie back into the bottle, I don’t really see that happening.  What we have to do now is harness the genie’s potential.

Sure, we list our available empty legs on sites like CharterX and Avinode.  I even have a growing group of travelers who have asked to receive twice-weekly emails from me, outlining what we have available.  And, from time to time, one of those travelers is able to take advantage of an empty leg.  I love it when it works out, but the reality is that it infrequently does.  All of these postings, lists, emails, etc., sound like a really great idea; so, why don’t they work better?  Are we not listing in the best places?  Are there too few participants?  Or, is the problem that the whole system is driven from the supply side?

What if the answer to successfully selling our byproducts is to revolutionize our thinking and let it be driven from the market side?  What if we turned our byproducts into our products?