Plane Conversations

High Speed transportation has great value for a community and an economy.  If a company like Boeing or Airbus were credited for the amount of time their products restored to the global economy (over the prior fastest transportation technology), their value would be counted in the trillions of dollars in increased productivity.

Introspect marketing

Perhaps this is the way the private aviation community needs to market itself.  Flying private saves time and time has value.  So, just because empty seats are difficult to sell, it does not mean that they don’t have value.

Follow the productivity

The trick is to market the “productivity” of the person sitting in the seat.  This is easy for Corporate Executives to understand, but what about a team of doctors going to a conference?  A single doctor would not charter a full jet, but 7 or 8 may very well afford to fly together.  Same day travel in the medical field is certainly worth the higher cost of a private aircraft, but how would you find 8 doctors who want to fly together?

Hey, Let’s Advertise

Advertising in a Medical Journal averages $45.00 – $88.00 per 1000 impressions of doctors starting at about $10,000 – or you could offer your free empty leg schedule to hospitals in every city where you fly. Guess how fast the word would spread?

Marketing is expensive: (From WebpageFx blog)

• The average price that advertisers pay to access people in the Travel market is $20.00 per 1000 impressions
• The minimum cost for producing and running a National TV advertisement is $100,000 minimum and several million maximum.
• National Magazine Ad cost between $5000-$50,000 for a full page
• Direct Mailing costs $1500- $15000 plus $1.00 – $2.20 per addressee
• Search engine optimization costs $2,500 – $10,000 website development plus content creation and ongoing maintenance of $2,500 – $5,000 per month
• Pay-per-click marketing costs $4000 – $10,000 set up fee plus $.20 – $3.00 per click through.
• National Email Campaign $4,000 – $10,000 to set up plus $500 per month labor, plus content creation for newsletter, and additional to buy email databases other than your own.

Worse yet, most marketing books say that it takes  seven (7) impressions to gain a customer – and that number may be increasing with ad saturation in social media!!!

Solution:

Social Flights collects marketing data, operations data, event data, community data and hospitality data and formats it in a way that allows true cost to be extracted and compared with seat value.  Then we can look into the community to find influential persons who would feature your company in exchange for the seat. We’ll find doctors, executives, bloggers, media, or VIPs who can deliver a targeted marketing message for far less than the cost of hiring marketing staff.

You cannot receive any value for empty legs unless they are listed and available to our network of entrepreneurs, operators, corporations, and media allies.  Social Flights listens to the community to find the NEED, then serve the need wherever appropriate in order to access the free publicity and amplification with which the aviation industry is endowed. Social Flights is the platform for such business development systems.

Social Flights introduces a common platform for travelers to access private jet inventory.  By decreasing the cost of organizing individual passengers, our partner operators are rewarded with access to groups of people ready to purchase your primary and your empty legs.

Empty legs are created after an airplane delivers passengers to a destination and must then return back to base empty.  The pilots must return to their families and the aircraft must return to service or scheduled maintenance.  The result is that up to 40% of private aircraft flights are empty.  Over the years there have been many attempts to sell empty seats but success rates rarely exceed 5%.

This creation of empty legs increases the cost (to the customer) of private travel to approximately double the one-way cost of their payload.  The resulting high cost of private travel limits the size of the market and the restricts utilization of aircraft for the owners.

It is expensive to deploy a professional sales staff without prequalifying the customer for sufficient resources, frequency of travel, and repeat business.  A high quality sales force is required because aviation is a complex industry and the price of the product can easily exceed 5 digits.

Empty legs are expensive to sell because the passenger does not walk through the door prequalified.  Empty seats are even more expensive to sell because it takes the same amount of time to sell an individual seat as it does the whole plane; and each person and their special need multiplies the level of complexity.  Finally, the FAA is very strict on the operator’s ability to schedule flights making it difficult to advertise empty legs or empty seats.

The economic value of empty legs would be huge if a platform existed that could sell them as primary flights.  Social Flights has combined our expertise in charter operations with social media organization to create exactly such a system.

Social Flights Creates an environment where operators can minimize the cost of selling empty legs by providing a common information platform that engages and educates the traveler so that a sales professional is not needed to manage every deal.  Social Flights uses social media tools and methods to help people self-organize around an operator’s inventory wherever it may be.  Social Flights combines inventory from many operators in many locations to offer travelers a seamless experience.  Social Flights manages contracts, consideration, and payments.

If you are an owner or operator, we’ll show you how to send us your inventory and scheduling feeds at no cost and we’ll do the rest.  As our system grows, we’ll deploy community organizers across the country and among substantial verticals who will bring customers right to your door step so that you can deliver them right to their door step.

Yesterday’s blog post argued that we cannot price any air transportation correctly until we price all air transportation correctly.

This means that if a trip were priced in proportion to it’s distance, then competition between airlines would amount to battles for internal efficiency rather than price wars dependent on short haul passengers subsidizing long haul passengers – plus “gotcha” fees, and unbundled services, increased government regulation, etc.

This would also allow smaller aircraft to be priced correctly in a time/value model…

The long-term view of wrong pricing

Livability is defined in terms of employment, safety, crime education and transportation. City planners, communities, and transportation officials allocate money towards projects, services and amenities that balance these objectives.  They also must react to the influence of external forces. The airlines have a disproportionate power to impact an entire economy by manipulating prices and services.

Losing the proximity war

Without proportional pricing, planners do not have a built-in proximity bias that can support multi-mode projects such as rail, bus, and ferry services.  If the price is the same to fly 500 miles as 3000 miles, a form of tunnel vision in regional economic development may appear.

Only 6 airports have direct rail service

Negative incentives

The hub and spoke system also introduces negative incentives to regionalization.  The time that it takes to travel between non-hub locations 500 miles apart often exceeds the time it takes to fly to a distant hub 3000 miles away.

Yet, families and friends want to disperse in much shorter distances.  Small companies want to branch out in smaller segments.  A regional tourism industry is easier to support than attracting distant tourists. Innovation clusters need space to diversify.  The flawed airline pricing model combined with profit driven hub and spoke economics may actually thwart natural growth in favor of unsustainable growth.  It makes little economic sense to disaggregate people from the land that they occupy.

Social Flights is much more than a ride-sharing system for jets.  Social Flights is a social organization concept that allows air transportation to serve the needs of communities as people reorganize themselves in the Digital Age.   Social Flights allows for rapid and effective air service to be deployed to the natural foundations of economic growth instead of trying to force growth to occur wherever the airlines choose to fly.

Smaller aircraft can fly efficiently between smaller markets as long as the price can be compared to the same time/value criteria  as larger jets. People have extraordinary access to information from which to make superior decisions. However, when the wrong pricing model distorts the right decisions, only the best-worst decision is available.  This is inefficient – it’s time to take off the blinders.

Until we can price all air transportation correctly, we will not be able to price any air transportation correctly.

Social Flights is the premier air transportation company that sells private jet service on a per seat basis.  This is important because there is no other way to compare the time-value of a private jet against the time-value of a commercial jet unless they are priced in the same manner.

Unfortunately, highly competitive markets determine the price of a seat on a commercial airline, not necessarily distance of the flight.  This does not make very much sense – for nearly any other product, you pay for how much you consume. If only commercial airlines were priced like private aircraft: by the mile.

Why does an airline ticket need to be 400 dollars 6 weeks prior to departure and 600 dollars 2 weeks prior to departure, except to maximize profit? Nothing else changes except as a proportion to distance traveled. But think of all the accountants, marketing personnel, and strategic planners constantly manipulating price inputs that have nothing to do with passenger satisfaction.

Every airline use essentially the same types of aircraft, they pay the same cost in fuel, and they have similar direct costs in labor, landing fees and gate contracts.  You would think that a 3000-mile trip would cost X amount more than a 1500-mile trip… all day long, for each and every airline.

This chart shows the actual fuel cost to carry a 200 lb payload 1750 miles between DFW and LAX for various types of commercial aircraft assuming jet fuel price is about 3 dollars per gallon (at the time that this industry study was published).

I did some back o’ the napkin calculations and concluded that a Lear 35 burns 5 times more fuel per 200 lb passenger than an MD-80.  A Phenom 300 is about half of that, or 2.5 times that of the MD-80.  The average would be around 3.3 times the commercial jet.

The Golden Ratio

This is a terribly difficult calculation to make so bear with my assumptions here.  But suppose all things being equal, we can say generally that a private aircraft cost is 3 -5 times greater than the commercial airplane while the door-to-door time is  1/3 – 1/5 the time of the commercial flight.  The factor of 3 – 5 (depending on the comparable averages) puts the cost of the traveler time in parity with the cost of the airline time.

Why does this matter?

Now, some honest comparative market analysis can take place by simply adding and subtracting time and money from both parts of the Golden Ratio to account for various attributes of the trip.  For example: shorter drive to smaller airports, no long lines, non-stop flights can be added or subtracted from the “time” part of the ratio.  Meanwhile; the cost of parking, airport taxes, cost of food, cost of lodging, and the cost of traveling to your final destination, etc., can be added or subtracted from the cost side of the ratio.

The Data will set us free

To liberate this information is to empower the traveler, the operators, the community and the hospitality industry to make rational decisions.  Communities can design rational incentives for tourism.  Corporations can make rational decisions for employee travel, and economic planners can make rational investments in intermodal transportation.

KLM is by far the most innovative airlines when it comes to social technologies.  We have written about them several times on Social Flights because we share a similar vision where social media can be used to organize people better than infrastructure, advertising, or marketing incentives.

The video above from KLM in very important, so watch closely.  In 58 seconds, KLM demonstrates how social value can be added to the value of flying.  This is the exact opposite of charging fees to “extract” social value from travelers held hostage.

Collaboration Economy

The KLM video shows how the two friends share a Taxi as a result.  Where many airlines charge 50 dollars for services, each of these people may have saved 50 dollars each on taxi fare in any major metro area.  If people can use meet and seat to share a taxi – they can share any number of valuable assets such as information, knowledge, insights, or more tangible assets such as discount coupons, vacation rentals, or access to their social network.

Pay attention World, Access is the Power Play:

What KLM has created is a new social platform.  As long as the “fasten seat belt sign is off” people can potentially trade things among themselves.  Wherever supply and demand for something valuable are allowed to meet, new markets form.

Talking about taxis:

Today, flying with Social Flights is a very personal affair – most people who fly together on one of our private jets usually know each other well and share deep affinities for the destination they are traveling to.  The idea of sharing a whole airplane on a per-seat basis is our core market.

However, Social Flights envisions a time where people can Meet and Fleet on the electronic curbside of the nearest airport with a fleet of airplanes waiting for instructions.   When enough people agree on a destination, the aircraft flies.  The same process can be repeated for the return trip from anywhere to anywhere.

Of course, people with similar interests will often want to go to the same places – something we share with the visionaries at KLM.  Now that’s what social flying is all about!

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.

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

– Jerry Seinfeld

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

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

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

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

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

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

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

Google Search for the term "Jet Charter"

Google Think Insights is an amazing resource for looking at who is searching on certain terms, and from where.  This post shows two search categories and related terms from which we can draw several general ideas about private air travel.  These data demonstrates that an increasing amount of people are searching on terms such as private jet, jet charter, VIP travel, etc.

Another curious trend is the term “Jet Charter Cost” is also increasing significantly as people seek to find the value threshold for private air travel vs commercial air travel.

Recession or transition?

These data all refer to a date range between the dates of january 2008 and December 2011 corresponding to the greatest economic downturn in the US since the Depression.  There are likely many forces acting on the market including the pullout of commercial aviation from minor market, few travel alternatives,  increased usage of internet search technology, increased business travel needs, and upper class growth rates.

The increase in terms related to cost may suggest that even the most wealthy are becoming cost conscious, more people want to fly private, more businesses need to fly private in order to access their market, and more VIP travel is required.

It is not surprising that the term “business aviation” has a similar location density to the term “Jet Charter”.  This reinforces the suggestion that corporations increasingly need to send their executives on travel outings.

Social Flights is in the business of social organization too:

It is likely that wherever executives go, so too will managers and lower level employees.  Social Flights has long suggested that there is an opportunity to increase private charter shuttle service between key locations.  Likewise, there are opportunities for companies to share private aircraft scheduled to fly between regions.

Next we looked at the term “VIP Travel” and identified the following locations where the terms were searched.  We found a similar increase in VIP Travel related terms as we did for terms related to jet charter costs, except related to supporting services such as reservation, booking, schedules, and services.

This suggests that the door-to-door experience is underserved and that an air transportation service that is able to connect the dots would hold a true value advantage over one that just drops the passenger off at a hub airport.

Search terms are important because they indicate the intentions of a market.

While little is ever conclusive, the rate at which something changes can say more than the thing being observed alone.  At Social Flights, the demands of a dynamic market are clear.

1. Companies must have business travel options.

2. A door-to-door value proposition is essential.

3. People are searching online more than ever

4. The commercial airline industry leaves a market underserved.

Economic recessions have been shown to be more about technological transition and adjustment rather than any single underlying factor.  We believe that this transition will be no different.

Social Flights is featuring this property sharing opportunity from AirBnB.com and it’s owner to present a unique way to visit the Olympic Peninsula and the Olympic National Park in the State of Washington. This is the first time we’ve done this because it is a great way to demonstrate the versatility of Private Social Travel.

Cinnamon Bear Cabin is walking distance to the (semi) private and uncrowded Lake Cushman Golf Course and within a few miles of three amazing bodies of water; Lake Cushman, Lake Kokanee, and the Hood Canal (actually a Fjord remnant of the ice ages).  Hood Canal is known for crystal clear saltwater scuba diving, crabbing, clam digging and seasonal salmon fishing.  Lake Cushman is a 4000 acre  glacier fed lake at the foot of 7000 ft mount Washington in the Olympic Range.  Lake Kokanee sits below the Lake Cushman dam and offers a serene  trout fishing experience through its meandering canyons.

The nearest commercial airport is 2 hours away, but Social Flights can bring you and your group directly into Sanderson Field in a private aircraft from anywhere in the US, less than 15 minutes from this very special location where you will pick up your car, keys, and license for fun and adventure.

Olympic National Park is comprised of nearly 1 million acres of the Olympic Mountain range. The Olympics literally halted the glaciers that carved the surrounding geography many thousands of years ago and are now home to unique species and wildlife ecosystems.  The ONP is one of the last remaining temperate rain forests in the World with ancient old growth featuring trees of astonishing size.  Yes we all know of the great sequoias of California, but Imagine cedars, douglas firs, sitka spruce, and hemlock trees 15 ft in diameter and up to 300 feet tall.

Indian heritage is alive and dominant in several areas offering cultural and recreational opportunities found nowhere else.  You can also visit Lake Quinault, The Western shores, and many hot spring locations all easily accessible from Cinnamon Bear Cabin.  In the Northern portion of ONP, you’ll find crystal clear Crescent Lake - a body of water so rare and so old that it’s the home of some species of fishes that exist nowhere else on Earth. Crescent Lake is called a “National Treasure” with 5 stars on TripAdvisor.com

Hiking, camping, Kayaking, festivals, casinos, local artisans, scuba diving, golfing, fishing, sky diving, are all abundant in the Olympic Peninsula.  What you will not find are crowds, tourist traps, tourist crime, pollution, blight, traffic, and harassment.  The Olympic Peninsula has one of the lowest population densities in the US. Local prices are local prices and not tourist prices.  Cinnamon Bear Cabin is perfect for people who want to experience the best of the Pacific Northwest without needing a vacation from their vacation afterwards.

The choice is yours, you can navigate the Gauntlet of the travel industry whose sole purpose is to drive revenue, add fees, sell advertising impressions, waste your time, and reach into your wallet at every fork and bend  on the roads most traveled. Or, you can go for a private experience with all the cherished memories that you expect for your time and money at a cost that is comparable to anything that the commercial travel “processing” industry has to offer. It’s about a colors of time for your money, not the colors of money for your time. You live once, make it count