Plane Conversations

Paraphrased from an excellent article in the Wichita Business Journal by Emily Behlmann:

With all the attention social media is getting these days, (the results) of a recent survey shows that 45 percent said social media was a low priority.  Deanna Harms, executive vice president at the Greteman Group , a Wichita branding agency who lists aviation brands to be a specialty, says business aviation companies, some of the most major brands in Wichita, have hung back on [Social Media] even more than other B2B firms.

Harms says she thinks one reason could be related to recent criticism of business jets as unnecessary luxuries. “Even in newsletters, it’s difficult to get aircraft owners to agree to being profiled,” Harms says. “You’ve heard the campaign ‘No plane. No gain.’ Aircraft owners, unfortunately, often think, ‘No ink. No criticism.’ The minute you start talking about your use of business aviation, the naysayers attack.”

Let’s rethink this:

Social Flights uses social media tools to fill empty legs and sell primary charter “by the seat”.  We also provide limited calendar air service (FAA Part 380 Public Charter).  In addition to marketing, we use these tools to aggregate private airplane operators and their inventory so we can “systemize” a large virtual fleet.

These innovations are a far cry from the domain of the demonized elitist corporate jet owner.  In fact, we are hearing from dozens of small communities who are functionally stranded without access to commercial aviation with very few other practical travel modes. Communities passionately ask us for air- service into a hub like Atlanta instead of bouncing around several regional airports and enduring a 3-hour drive to anywhere.  Millions of American need access to each other and global markets beyond their parochial economies.  People need opportunities – that’s what social media is all about.

You can’t Globalize until you Regionalize

Regionalization is where small communities want direct service to other small communities.  Social Flights is introducing air service between Branson MO, Nashville, Tri-cities TN,  Austin, and Milwaukee. It almost takes less time to drive between some of these places than to fly commercial. The same holds true for Wichita.

It Boils down to Supply and Demand

Meanwhile, hundreds of commuter jets are coming into the market.  Utilization of corporate jets is 1/20 of a commercial jet.  Corporations are looking for increased revenue from their jet assets.  Manufacturers can deliver white tails into a new air-service system to keep production lines steady. Airlines can off load volatility (overbooking and low yield flights) to private carriers, Next Gen air traffic control will open thousands of smaller airports to air service, ironically, this includes Wichita.

This boils down to huge inventory, huge need, greater efficiency, and nobody to serve the market.  Our prediction is that Social media is the glue that will hold this thing together.  People travel across their social graph (Facebook, linkedin, and g+ connections) not to the hub airports, period.  People want to work where they live and play, not just surviving in 1 of 28 U.S. hub cities. People want to go to where they are going.

There is profound opportunity in private aviation and Social Flights is the pioneer.

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.

Picture credit: Wealth Informatics

The race to the bottom that everyone has been watching in the airline price wars may have finally ended. All the frills have been extracted, all the expectations have been dashed, and the glamour of the jet-age has all the luster of a drive-in movie.  The bottom has been achieved.

The entire value chain, from airport taxes to hotel rooms and parking fees have happily stepped into the low-cost void, ready and willing to pick up the slack in airline prices.  The taxi from my house to Seattle Tacoma airport costs more than the airfare to San Francisco.  Three days of parking at the airport costs more than the taxi.  Off lot parking is not much better. God forbid that hunger arrives at it’s destination before you do.

Now watch the prices start slowly creeping upward as airlines come back leaner and meaner subsidized by the pensions of their workers in the post-bankruptcy glory of the deregulation act of 1978.   If American business has been accused of shortsightedness, the 25 year plan of the airline industry is pure brilliance – assuming it was a plan.

From USAToday:  

A new American Express Business Insights study finds that spending on first- and business-class airline tickets increased by 9.1% and 5.4%, respectively, in the third quarter. But on the ground, travelers spent more of their dollars — an additional 10.5% — on economy lodging vs. only 2.2% more on luxury hotel accommodations in that time.

There are likely several reasons for the shift in spending patterns.  Travelers are valuing the products on a “true value” basis.  The value of business class treatment and comfort exceeds the value of luxury accommodations.  Interesting.

The spending trend applies to traveling for business or leisure, the study indicates. ”It really speaks to the fact that (consumers are) so concerned about the airline experience that they’re willing to make the trade-off,” says Maryam Wehe, senior vice president of hospitality at Applied Predictive Technologies. 

How much would a business passenger justify to shorten the air travel portion by 50% while also eliminating two overnight stays?  At Social Flights, we can often provide a door-to-door travel experience that is 60% – 80% shorter in total time yet costs the exact same amount in dollar terms.  Guess what – that’s what Social Flights can do for you.  Social flights provides on-demand, direct, and comfortable private jet travel in a ride sharing form so that you get more travel for less money.