Plane Conversations

My son came home from school one day with a classroom story I found disturbing.  It was at the beginning of the school year and the teacher asked each student to introduce themselves and to tell what their career goals were.  One student stated that he wanted to be a famous rap artist.  The teacher’s advice to the student was to pick another career, he’d never make it in that one.

I’m sure that there were plenty of people who gave the same advice to Marshall Mathers and Curtis Jackson; but, apparently neither Eminem nor 50 Cent took notice of the naysayers. 

Several months ago, I read a blog entitled Misfit Entrepreneurs that really stuck with me.  In the blog, Dan Pallotta wonders how Bruce Springsteen could communicate his aspirations to his father, “How does he tell his father, ‘I’m going to be Bruce Springsteen?’ “  How does any true visionary communicate their vision to the rest of us?  How can they explain their dream to expand or alter a current reality?  How can they define what we can’t even imagine?

At the moment, my son wants to be a stand-up comedian.  He’s pretty hilarious; so, this may be a good fit for him.  I remind him that the path is difficult and that the price, in terms of work, will be high.  However, if Jerry Seinfeld can do it, I don’t see why my son wouldn’t be able to – provided he’s willing to do the work.  Those are the real keys, aren’t they?  We must be able to envision the goal and we must be willing to do the work.

In the charter side of Business and General Aviation, we often talk about the problems in our industry.  Operators all over the country have shut down.  Those of us still flying struggle with ever-thinner margins.  Customers want more stringent standards; but, they often want to pay less for them.  The market is unwilling to pay price increases that keep pace with cost increases.  How can we continue to operate under these circumstances?  We operate smarter.

But, we can’t operate smarter until we change the way we view ourselves and our product.  We have to envision ourselves as Bruce Springsteen before we can actually translate the vision to reality.  We have to stop seeing our industry only for what it is and, instead, see it for what it can be.  What if we can increase fleet utilization without substantially increasing costs?  What if we can increase our margins simply be changing our customer base?  What if we could increase our customer base by tenfold?

What if I told you that we can?  What if I told you that the vision was becoming reality right on the horizon?  Would you be willing to envision it?  Would you be willing to work on it with us? 

We can do it.  After all, Bruce Springsteen exists.

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An industry in crisis is an industry ripe for transformation.

America’s air travel system is in crisis. In response to rising fuel prices, air-space congestion and industry losses during the recession, airlines have cut capacity and raised rates. These challenges follow on the heels of delays and hassles that have cost the nation almost $33 billion in the past year alone, according to a recent study commissioned by the FAA / DOT.

Some blame the problems on government regulations over airlines and the lack of modernized air traffic control infrastucture. Others see the problem as dysfunctional management of the airline system.

Could it be that “the system of air travel” is being re-engineered before our eyes and all the current problems are part of the process?

I remember when airline travel used to be a social experience. Today it is anything but social, with the majority of passengers frustrated by the experience and loss of productivity.  Yet air travel is necessary for both leisure and business purposes.

How big is air travel and its impact on the economy here in the US?

Research from the US Travel Association says:

1. About 42 percent of U.S. adults reported traveling by air for leisure trips.  The percentage of air travelers increases to 48 percent among U.S. adults who traveled for business purposes in the past year.
2. A study by the U.S. Travel Association revealed a deep frustration among air travelers that caused them to avoid an estimated 41 million trips over the past 12 months at a cost of more than $26 billion to the U.S. economy.
3. Business travel in the U.S. is responsible for $246 billion in spending and 2.3 million American jobs; $100 billion of this spending and 1 million American jobs are linked directly to meetings and events. For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.
4. The Internet was used by approximately 90 million American adults to plan travel during the past year with 76 percent of online travelers planning leisure trips online.

The Social Market of Travel Is Hot Every other day or two, you hear about a new travel app, a travel related company, or a mega travel player partnering, acquiring, or developing the next industry killer app. Consider some of the recent developments in the travel space over the last year:

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Good ideas travel easily and far along trade routes.  Ideas like irrigation, Apples, grapes and wine spread along the Silk Road. The paper and writing spread new ideas leading to increased literacy, the scrapping of old philosophy and the creation of new social orders. The printing press then led the way for today’s mighty publishing Industry.  But don’t forget a simple fact, travel is the substrate of the next economic paradigm.

Ideas: A Chain with many Weak Links

Seth Godin wrote a wonderful article about the publishing industry called The Domino Effect.  He observes that:

1. The middlemen (bookstores) have too much power to limit shelf space.

2.Authors are separated from their readers and don’t have the data to contact them directly.

3. Pricing is based static, slow, and largely irrelevant of content or any form of supply and demand which is of little benefit to the reader or the author.

4. Ideas from books travel much farther and faster than the book itself which does not translate into book sales.

Mr. Godin’s point is that given how important books are, the Chain has many weak links between the author and the audience. Publishing is due for an extraordinary disruption and Seth is going to change it with The Domino Project.  But how many other industries suffer from the same weak-chain syndrome?

Travel: A Plane with many Weak Links

Well, if Books and Travel spreads ideas along the Silk Road, then they must have a lot of other things in common.  If we apply Seth’s observations to the commercial airlines:

1. We see that Airports and airlines have tremendous power to limit gates, times, and availability of routes.

2.  Airlines have no idea why they are carrying all those people around.

3. Pricing is static, segmented, slow, and has very little to do with the actual supply and demand for travel.

4. Travelers are transporting ideas which move faster and more broadly than the aircraft itself and which does not translate into more airline tickets sold.

Where ideas spread; value is created

What is so powerful about ideas?  Most innovation gurus discount raw “ideas” as the useless drivel of idle minds. “Show me the money, not the ideas”, they bark.  If ideas are not innovation, then what are they?  If Ideas are not valuable, then what are they?

The Travel Economy

Travel technologies and applications are being sold for incredible sums of money.  Every airline merger is big news and every geolocation application is huge business.  Travel data is a lightening rod for everything from pricing to privacy.  Social Media applications are getting that migration routes are an excellent marker for “value flow” and therefore, cash flow.  Airline Travel is still the most favored mode political disruption because the links in the economic chain are so weak.  Travel is serious business.

The “New Value” Integration:

Every industry with weak links between production and end use are candidates for disruption in the great integration. Any idea that can strengthen the link in the chain between origin and the destination of an idea is a product of the great integration.  The Social Value creation process and astonishing opportunity will happen at the weak links between origin and destination of any product or service.

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Many of us who work in business aviation wonder if people would be willing to share their travel plans, share a flight together, let others know what they are up to, so they can meet up on trips, share rides from the airport to the hotel and so forth.

In other words, will business aviation travel go social?

One of the terms used for the aircraft we operate is “private” which does not exactly line up with “social” in a public sense.  We fly “private jets.” Private sounds like I don’t want the public to know what I am doing, where I am going and I most likely do not want to share my private ride.

Sharing is already happening in the world of airline travel and the events that drive travel; maybe to ease the pain inflicted on travelers by the airline system.

As I have looked around on the internet for social media platforms related to travel some really interesting ones have started showing up.

• Planely (www.planely.com) allows airline travelers to share their flight itinerary with the hope of connecting with others on the same flight. If this builds critical mass it could become a valuable tool.
• IMGuest (www.imguest.com) allows travelers to share their hotel location and plans in order to meet up face to face with others at the same or close by hotels, and expand their network.
• Plancast (www.plancast.com) is a site that is really done well, allowing people to post their plans for attending conventions, local events, music events, etc. and easily see who else is attending. A great way to make connections both locally and at away events.
• TripIt (www.tripit.com), which just announced its acquisition by Concur (Nasdaq: CNQR), was one of the first travel sites allowing travelers to share their itineraries that gained a mass adoption. Concur is a leading provider of integrated travel and expense management solutions and apparently thinks TripIt is on to something based on the acquisition price.

These sites allow you to sign up and use them for free, and in some cases check in through your Facebook or Twitter accounts. The Facebook check-in creates an instant profile for fellow travelers to see plus it gives the site access to your Facebook information.

So the question asked again: Are travelers willing to share their travel plans in the hope of making the experience more social? The answer seems to be yes, as travelers are signing up to these social technology platforms in droves.

What about personal and business travel in private chartered aircraft?

What is the value in sharing travel plans with others you don’t know too well? Is it too risky?  Most of these sites tout the value proposition of networking and meeting up with people you would not otherwise meet.

The value of each of us knowing where others are going can go beyond just networking.

If you and I find out we are going to the same places, we can get together and come up with new solutions for getting there more efficiently by sharing costs and buying travel collaboratively. Eventually we may even be able to drive the market to offer better solutions that fit our needs, versus what suppliers of air mass transportation offer us today.

It would great if we could go when and where we really want to go in the most efficient manner as opposed to being pushed and shoved through a system that is not designed to really meet our intentions.

When that happens can the private aircraft, and the industry that supports it, be a possible solution?

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Knowledge is power.  It’s not what you know, but what you do with what you know that matters. 

Enter social media, web 2.0, wikinomics, the digital age, the Google era-whatever you would like to call it.  The power of this enormous infrastructure and way of life, the power of social media is the sharing of knowledge by wise leaders. 

Let me briefly explain–Google shares information, but it certainly isn’t wisdom.  On the other hand, your friend, who has been listening to a podcast about a certain subject for a year now, knows you are looking for a new job in a related industry.  He knows that the host of the podcast is great friends with a guy in that industry.  A tweet is sent with a link to the podcast… Knowledge has been applied.  Wisdom has been shared.  Now connections have been made.

Enter video.  YouTube is probably the most widely known video social media channel, but there are many.  Here is an example:

What did you see? Probably a lot of things.  Did you see an acrobatic flight from the “bird’s eye” view of the pilot? A pilot getting his first lesson could learn a lot about the cross check…looking outside at the wingtips to maintain attitude, back and forth, now forward at airspeed.  These are the kinds of things that can only be learned in real time.  It’s challenging, even for an experienced flight instructor to explain this inverted.

If a picture is worth a thousand words, what is video worth?

Did you see Johnny’s house in the early frames of the video, just to the far side of the brown field off the nose? How cool would it be for Johnny to see his house from that angle?! Even more exciting would be real time streaming video integrated into the flying video game on his HD TV.

Imagine a student pilot getting ready to go on his first cross-country flight.  The weather between here and the destination is forecasted to be VFR, but there is a slight chance it could deteriorate.  So he types in the web address for a new, video-based “Sky Maps” website, and sees that another pilot has just flown along that route.  By clicking on the airplane symbol on the “Sky Map,” a video is cued.  Student Pilot can now see the weather for himself, adding some knowledge to his decision-making process, painting a picture to supplement the weather forecast.

Did you see the weather off to the east in the video? Scientists could tap into a wealth of data to update meteorological models, validate predictions, understand these complex (and still quite mysterious) phenomena even better.

Did you see the turbulent airflow off of the upper wing? I didn’t either, but it won’t be long until a high-tech lens attachment the size of a dime gives Schleren photography capability to this portable video cameras.  In fact, the future holds a camera that looks wherever the pilot points it and captures images at any bandwidth in the spectrum of light.

One last application for the test pilots among us - the pilot was moving his head, large movements, and a lot of them, in other words, high frequency and high amplitude.  This data would certainly contribute to an understanding of the workload during this phase of flight.  At this point in the evolution of the technology, we don’t need six sigma certainty that it’s high workload.  We have a definitive qualitative understanding that it is.  The technology will mature, and the way we use it to collect quantitative measures of what has been previously subjectively evaluated should mature as well.

That’s what the future looks like…in HD.

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So often we allow ourselves to get bogged down by our own thoughts and habits.  Year-end reflections remind us that there are things we should stop doing and that there are valid reasons for changing our behavior.  I think that today I’ll avoid dwelling on those thoughts that mire down my thinking and, instead, focus on a vision of the value that change can bring.

Checking the clock for the tenth time, she sees the hands creeping towards midnight.  In the nearly abandoned library, a college freshman furiously scratches out the last half-page of her calculus homework thinking, “Maybe I’m not cut out for this.”  A vibrating alert signals a message.  Opening her phone, she scrolls through a list of updates (hmm…that party is looking more inviting); but, the newest message, marked with an airplane icon, simply reads, “Thought you’d like this story.” The link is from Mike, her study partner in aero class.  She clicks on the link to discover that it’s a first-hand account of the first flight of the X-99 including a video of the landing.  She dives back into her assignment with a determined smile…Inspire.

Late one Friday afternoon, a test pilot looks at the test cards for a new commercial aircraft terrain avoidance system.  This is the third weekend in a row that he’s had to work late.  The cutbacks are wearing him down.  Something stirs in his mind, a distant memory of another test program—F-16 advanced ground collision avoidance testing.  Something in that distant memory tickles his mind.  What was it?! He opens his laptop, opens Google Reader, enters search terms; and, there it is – a blog shared by his chief test pilot detailing the test program.  Returning to the current test, he realizes that this altitude isn’t high enough. An FTT performed at that speed and dive angle will almost certainly be unrecoverable.  He knows that delaying tomorrow’s flight won’t be popular, but the test team needs to see this error and that article…Inform.

Rubbing his temples, a college provost reviews the budget…again.  Asking himself which of these programs he will have to cut, one line-item catches his eye.  “How much money does it take to fund a flight research laboratory?” he wonders.  Delaying his decision until after dinner, he goes home to be greeted by his son, excitedly telling him about the newest YouTube video.

            “Watch this dad! A spinning airplane deploys this chute and recovers safely.” The narrator said that the flight test was a joint project between that test pilot school and his university.

            “That’s your work, isn’t it dad?” An email address hyperlink next to the video catches his eye.  Maybe that aero department is worth the money after all…Invest.

Sharing what we do in flight test allows us to inspire, inform, invest, and even innovate. Social media can transform the way we share, multiplying the speed and breadth of our influence on the important people, from students to policy-makers, we want to touch with our message.  After all, one of them might just be the next Chuck Yeager.

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 USA Today travel section reports in an October 19 article  by Alan Levin says that travel delays in the airline system cost US society 32.9 billion a year in lost productivity.

The research behind this assessment was funded by the FAA in order to promote the NextGen air traffic system, which they say in the article can be fully deployed by 2025. In the mean time we will just have to keep losing 32 billion in productivity; or maybe it gets worse.

A few interesting quotes from the article:

All told, people on airline flights were delayed by more than 28,000 years during 2007, the year the researchers studied.

The cost to individuals in lost time and inefficiency was $16.7 billion, the study says. Only a small fraction of travelers — ones who miss connections or whose flights are canceled — suffer about half of that cost.

 ”We call those guys disrupted passengers,” says Cynthia Barnhart, interim dean of engineering at the Massachusetts Institute of Technology and an author of the study

The FAA and the ATA (Airline Lobbyists) believe that the NextGen system and more runways at the busier airports can solve this problem.

I would contend that NextGen and more runways will help, but they are oversimplifying the solutions to a major systemic problem in our air transportation system. The airline system of hub and spoke drives inefficiencies in travel by forcing people to travel indirect routes and then end up at destinations that are not closest to their true destination. More runways at the largest airports will help the airlines but it will not increase true travel efficiency.

The one solution the ATA doesn’t want anyone to think about is the use of Business Aviation and General Aviation aircraft to bring more efficiency to travel.

With an additional 5000 airports at our disposal, many in locations more convenient to our ultimate destination, business and general aviation should be seriously considered as a major part of the solution.

Mainstream media the ATA, and the FAA to some degree continually dismiss our subset of aviation as a viable part of the solution to the inefficiency that exists in air travel.

I see a 33 Billion dollar opportunity for those of us in business aviation but the airlines and the government are not going to hand it to us on a silver platter.

We have to create and communicate a better value proposition. We also need to insert ourselves into the conversations about the future of air travel in this country and gain a voice on the national stage.

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An October 14 article in the Wichita Eagle by Molly McMillin says the aviation manufacturing industry in Wichita is waiting on the rebound of the economy and the business aviation market.

If you are leading you don’t sit around and wait on anything or anybody. You blaze a trail and create your own economic recovery.

The true innovators in the history of modern economies did not wait on rebound, they created it.

In business aviation will we allow our fates to be tied to decisions made by the government, by economic down turns and up turns, by someone else’s innovation and prosperity? If so we are in trouble.

A recent post by Dan Robles  of the Ingenesist Project stated the following:

The invention of the wheel, wedge, and pulley came long before the invention of credit scores, CDO’s, and International Trade Agreements.

Technological Change must always precede economic growth – economic growth cannot sustainably precede technological change. If you throw money at a problem, you are not guaranteed technological change.  If you throw technological change at a problem, you are guaranteed money.

We are going about the process of globalization as if economic growth can precede technological change.  This is the tiny flaw of market capitalism and it is unsustainable.  In short, we’ve gotten it backwards and continuing on this course prevents us from seeing the future.

Sadly to me it seems that our industry is stuck in a mindset that we will be in a “no growth mode” to “slow growth mode” for the next few years. That means no new jobs, maybe even a few more layoffs,  and those of us who are here today will be fighting for a piece of the pie that is not going to get any bigger anytime soon.

A good example of innovation driving a market is the personal computing industry.  The market has grown because price went down at the same time computing power went up. The growth has been exponential, not in small increments. And because of that growth, billions of people have the power in their hands to communicate and connect that we could not have imagined 20 years ago.

What about the growth of social media as a way for people to connect? Facebook surpassed 500 million users this summer. Who could have predicted the adoption rate of social media 5 years ago? Did any of us have social media in our marketing plans in 2005?

So if we want our industry to grow, and the manufacturers of  business aircraft can’t innovate fast enough to deliver a faster less expensive machine like the personal computing industry, then what do the rest of us to do?

Can we innovate, through the use of social technology, to offer travelers a new solution?

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An economy is defined by, or limited by, time and productivity. Value is created in an economy when an improved use of the resource of time creates gain in productivity.

The purpose of travel by aircraft is to gain time over other means of travel, time that can be used to create new value.

Inside the experience of travel the journey itself can either add to or subtract from productivity. If I can be productive while traveling I gain value during the travel in addition to the gains on both ends of the journey.

Every day, those of us in business aviation, witness the gains in productivity both in time saved and in the positive experience of travel by private and business aircraft.

Business travelers who have experienced this form of travel know what I am talking about.

Business travelers who use the airlines will testify to the negative impact on productivity from the time drain and wear and tear of airline travel.

The airlines, and the system they have created around the hub and spoke, have done a lot to try and ease the journey by creating nice terminals with food, shopping, and wifi connections to the Internet.  However, am I more productive sitting at the Airport Starbucks on my laptop for three hours waiting on the connecting flight, or being at my destination three hours earlier?

What about the time en-route?

If I can conduct a meeting in the air with clients, vendors or fellow workers what’s it worth?

When is the last time you had a business meeting while traveling on an airline in coach class or even in business class?

Business aviation wins hands down both in time saved in the journey and productivity experienced during the journey.

So why doesn’t everyone travel using a business aircraft?

Price and perceived value!

Business aviation is expensive when compared to the perceived value.

If our industry created a true cost-productivity calculator application that took into consideration not only the value of the time savings, but just importantly the productivity gains experienced during the journey, would it change the perception of the value of business aviation?

The technology is here today to do this.  

I would challenge our friends in the tech sector to come up with an application that calculates the “true costs” of the various modes of air travel.

What would an application like that be worth to those of us in Business Aviation?

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A September 27 press release  by the National Business Aviation Association applauds the President for signing a piece of legislation for small business that includes a provision for bonus (accelerated) depreciation for strategic business purchases. The provision includes new aircraft and major aircraft components such as new avionics, interiors and engines.

 This law is good news for small businesses in the aviation services sector as well as manufacturers of business aircraft. For companies considering the purchase of a business aircraft, or doing upgrades on their existing aircraft, there has never been a better time to make the purchase decision. Manufacturers and service providers are hungry for business.  The combination of aggressive pricing, and the tax advantage of this new legislation, will hopefully stimulate spending for those who are close to the decision already.

I don’t want to sound negative at this point, but this legislation is more of a band aid to a problem than a cure. The business aviation industry in the US has a chronic and severe cold and bonus depreciation will relieve the symptoms for the next year which will make us all feel a little bit better. It will not cure the problem.

For the manufacturers in Wichita it will keep people employed, and for those of us in the maintenance business it will hopefully generate sales of aircraft equipment upgrades.

What we really need is a cure for the root problem which is lack of demand.

Until more business and leisure travelers can afford to fly in private aircraft the industry will continue to languish or at best have a slow growth that mirrors the economy we are in.

A few percentage points of growth as a best case, or stagnation as a worst case, does not put people back to work in long term jobs.

Travelers who use business aviation are passionate about the experience, benefits, and value of flying by private aircraft. The limiting issue seems to be price. Everyone I talk to wants to fly in the private jet but not everyone can afford the price.

Over the long haul, if we are to cure the problem of demand, we must solve the price problem in our industry. A lot of manufacturing and service jobs in aviation are at stake, so it is worth thinking about a solution.

The technology sector of our economy has solved this problem of price and now everyone can afford mobile computing devises with computing capacity that could only been dreamed of a few years ago.

Surely our industry of business aviation can solve this problem as well.

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