Plane Conversations

From our first article with Plane Conversations, we have advocated for general aviation, pointing out how aircraft charter can be a logical solution to travel difficulties and why corporate flight departments and private aircraft ownership are far more than the corporate excess Main Stream Media supposes.  However, we realize that while we have said that air mass transit is not always your best solution, there are particular instances when it does  makes the most economic sense.  In those cases, travelers have to suck it up and deal with the hassles and inconveniences of scheduled air service.

One of those hassles is airport security.  As I have said before, while I am not a fan of the process, I recognize the need for it and I understand that it is a necessary evil.  In July, a woman was arrested for disorderly conduct at the Nashville International Airport when she refused to allow her teen-aged daughter to go through the body scanner.  This meant that the girl had to be screened using a standard pat-down, a procedure far more thorough than it looks on Law and Order.  The mother wasn’t happy with that, either.  She proceeded to complain loudly, repeatedly and abusively enough that the airport police finally put her under arrest.  She has now achieved some kind of bizarre martyr status in the Main Stream Media.

This absolutely blows my mind.

Her attitude reflects  a common sentiment, though.  The traveling public insists on government protection for fliers. Snicklefitz Traveler cries, “Keep me safe!  Keep me safe!  But do it by screening that other guy, ‘cause I’m not a threat.”  “Keep me safe, but handle it in the way that I want, even though I don’t really know how the whole process works.” “Keep me safe, but don’t inconvenience me.” “Seat me next to people like these….”

Security measures are not created out of a vacuum.  They are in response to a specific threat or incident.  Thanks to Richard Reid, we have our shoes screened.  Thanks to Umar Farouk Abdulmatallab, we have our bodies scanned and our groins checked.  Organizations all over the world use both women and children as soldiers and terrorists.  Security screening is a thankless job and the TSA an easy target for criticism; but, the fact is, the TSA has to get it right every time – or as close to every time as humanly possible –  because the cost of being wrong could be catastrophic.  The terrorist has to get it right only once to achieve that same catastrophic effect.

Flying is a privilege, not a right.  To take advantage of the privilege, we must agree to abide by the rules of the airlines, airports and related agencies.  If you disagree with the measures in place, you don’t have to fly.  People crossed the oceans in ships.  They settled Utah using hand carts.  There are other ways you can get to your destination.

By the way, the attractive, harmless people in the photos are Alyssa Bustamante, a 15-year-old who strangled, stabbed and cut the throat of her nine-year-old neighbor and Anders Breivik who murdered 77 people in Norway.

If Timothy McVeigh taught us nothing else, he should have taught us that evil may look innocuous and that not all of those who would do us harm are from outside our borders.

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Part 2: Looking to 2011 and Beyond

Where does the general aviation industry go from here? Well, this looks to be a year of transition, from the old economy that we knew prior to 2008 to the new economy that should start to really see growth in 2012. Growth will come with a different look than it has in the past, driven by technology innovation in the market and increased globalization. The United States will no longer be alone in the drivers seat. Traditional market general aviation growth will happen in China, India and other developing economies.

Growth here in the U.S. has to come from market innovation. We need to do more than get used to it. We need to adapt and embrace it, and determine where the opportunities are for those of us in general aviation in the U.S. and in Europe.

Our company finished 2010 with a strong run to the end of December, and the first few months of 2011 look strong in aircraft charter and FBO fuel sales. Is this a sustainable trend? I hope so. My major concern is the volatility of fuel prices. We don’t know if the economy, let alone the aviation industry, can stand oil prices 30% to 50% higher than they are today.

Setting concerns aside, when I look out to 2011 and beyond, I see opportunities for general aviation to capture the traveler in a new way. The number one reason more people don’t fly general aviation aircraft is price. I have written a lot about this over the past 18 months. I’ve thought about this problem (opportunity) for many years prior, as I talk with people who use or want to use our service almost every day for the past 28 years. There are some ideas worth considering in a good book I’m reading right now called “What’s Mine is Yours: The Rise of Collaborative Consumption” by Rachel Botsman and Roo Rogers.

Wikipedia says the following about this term I had not heard of until recently:

The term collaborative consumption is used to describe the cultural and economic force away from ‘hyper-consumption’ to re-invented economic models of sharing, swapping, bartering, trading or renting that have been enabled by advances in social media and peer-to-peer online platforms

The authors propose that in order for “Collaborative Consumption” to work, four underlying principles must be present:

* Critical Mass
* Idling Capacity
* Belief in the Commons
* Trust Between Strangers

Conditions one and two definitely exist in General Aviation and the subset of Business Aviation. We sit on a fleet of underutilized aircraft (idling capacity) , many parked and not flying at all, and even the active aircraft are not used anywhere near optimum levels. Critical mass is present but not properly managed and accounted for. In the U.S. there are 17,000 aircraft available for hire in charter service. Many more aircraft could be available if demand was sufficient to put them to work. Where are they and how do they work together as a synergistic fleet to serve the market? Today the fleet doesn’t work in a synergistic way.

The charter industry is fragmented and not optimized, but technology companies like Charter X / Avinode are making strides in providing a global distribution system for supply of aircraft availability across the fleet. The bigger problem seems to be finding the customer.

That customer is currently being pushed and shoved around by the airlines in a system that seems to become profitable only at the expense of efficiency, comfort and happiness of the traveler (the customer).  If Zappos is in the business of delivering happiness I sometimes wonder if the airline system is in the business of delivering misery.

On conditions three and four, we don’t know if there is a belief in the commons and trust between strangers in General Aviation. Are we willing to share a ride or flight, and do we trust who we are sharing with to sit next to them? The defining technology that will push us through these hurdles will be social media. I can see a day when we share a flight with others to a destination of common interest and long before we board the aircraft we know who we are flying with because we know them online. We see their Facebook profile and we are connected to them on LinkedIn. We have tweeted and texted them and maybe even used email (outdated) to connect to them, to discuss our common travel intentions.

And so our belief in the commons and trust between strangers centers on sharing a flight in a private aircraft together to safely and efficiently travel. And more than that, it will be enjoyable travel because the travel itself will have a social component to it that we don’t get when we travel on the airlines today. Traveling with old and newfound friends and business associates and family will be the new order of travel.

This is not going to happen on a large scale in 2011, but it will begin this year. By 2015 it will absolutely change travel by air in ways that most people cannot even imagine today.

Early adopters from the supply side will be those charter companies (new and established) who are not afraid to adopt new technologies and business processes to meet the new economy. As the critical mass increases and more travelers find this way of air travel, more suppliers will fill the demand.

From the demand side, those who are fed up with the current system of air travel are hungry, maybe even begging for a better solution to meet their need to travel. Social technology may discover that demand for what we have to offer far outpaces our ability to meet it with the supply where it sits today.

Eventually the airlines will have to reorder their business model when they discover that travelers don’t want to go when and where they are being forced to through the current system. It will take them a while to realize what is happening and some airlines that do understand innovation will figure it out. Many will not, due to their inflexible business models.

The next few years will be an exciting time in our industry as disruptive technology changes the way we travel. I look forward to seeing it happen and hopefully being in the midst of it.

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You commonly see fireworks displays in the Nashville area on New Year’s, Independence Day, Sounds games and whenever I’ve received an invoice that is significantly higher than what I was quoted for services, goods or whatever.  In my opinion, the fastest way to lose a customer is to charge them a higher price for a product than they agreed to.

This happened to me years ago when I ordered a specially printed item.  The invoice was some 15% higher than what I’d been quoted due to overruns.  Apparently this is common knowledge in the printing industry; but, I’m not in the printing industry.  I was livid that my very tight budget was blown.  My representative’s attitude was along the lines of, “Well, it’s common practice and your own fault for not knowing what questions to ask.”  Somehow, it was my fault for not knowing her job.  Riddle me this - how many more orders did I place with that printer?  That’s right – none.

Anytime I train new agents, whether at the ticket counter, a travel agency or at a charter company, I emphasize our responsibility to give clients all of the information they need without giving them more than they need.  I advise them to model the exchange after what Albert Einstein said, “Make everything as simple as possible, but not simpler.”  Aircraft charter can present a mind-boggling array of choices.  All reputable, professional charter operators and brokers will be happy to share information with you that will allow you to narrow that array and make an informed decision.

Clearly, aircraft come in a wide variety of sizes and capabilities.  You would not use the same aircraft to take two passengers from Philadelphia to Telluride that you would to take two passengers from Cincinnati to Charlotte.  To determine which aircraft best fits your mission, the charter operator will ask you several questions.  Among them are:  “Where are you going?”  “When are you going there?”  “How long will you be staying?” “How many people will be going with you?”  They may also ask, ”Do you have a particular aircraft or budget in mind?”  It’s been my experience that if someone is budget-conscious, they will let you know up front; so, I don’t usually ask about it.  If the operator you are calling doesn’t ask all of those questions, you may want to add them to your repertoire.

Once you give your itinerary to your operator, you might want to ask about alternate airports.  Suppose you are going to the Dallas area.  Of course, you could fly into DFW International or into Love Field; however, since there are at least 27 airfields within 40 miles of Dallas, there may be a less congested one closer to your destination.  If you give your operator the zip code of your destination, they should be able to find the closest suitable airport for you.

If you called our offices for a quote, you would get a “hard” quote, meaning that you will be invoiced at the same rate you were quoted, unless you change your itinerary, use the flight phone or order catering.  Some operators use “soft” quotes, meaning that you will be invoiced based on actual flight times, landing fees, and other costs.  Either structure is fine, as long as you know what to expect; so, be sure to ask which quoting method your operator uses.

It’s important to know what your insurance underwriter requires.  For instance, will they allow executives to fly on propeller aircraft?  What about single-engine aircraft?  How many executives may be onboard a single aircraft?  You should check with your agent for that information prior to booking your trip.  If they required that your charter operator list you as additionally insured, that’s easily done.

As we discussed in November, there are questions you should ask to help ascertain the safety practices of your charter carrier, i.e. have they been audited by a third-party firm like ARG/US or Wyvern?  If so, what were the results of that audit?  If not, what information does the NTSB have on file for their operating certificate number?  If you are using a charter broker, they should be able to get that information on the carrier for you.  At the moment, I am not aware of an industry standard audit for charter brokers; however, I understand there is a push to create that standard.  Although some brokers may be Wyvern Authorized, this means only that they have submitted three references from Wyvern recommended operators, that they have been in business for at least three years and that they have access to the Wyvern database of audited operators.  It does not mean that the broker’s own practices have been audited.  To verify business practices of your chosen broker, I would suggest researching them just as you would any other vendor: look for online reviews, check with the Better Business Bureau, or check with colleagues.  I don’t normally ask for references since, really, who’s going to give you a bad reference?

The customer should never be penalized for not knowing all of the nuances of the product they are buying.  As business aviation professionals, it is our job to give you all of the information you need to get the best value from your travel dollar.   Continue with us as we break down how that dollar is spent when we Unbundle Charter’s Internal Costs.

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Glamping at "Tent City", Paws Up, Montana.

Working in the private jet business, I know all too well that maximizing time is one very important factor for the business traveler today.  Well, what about the leisure traveler?  If you had a choice to start your vacation from the moment you stepped onto a beautifully appointed private aircraft, or rather endure a very long and irksome commercial flight where the vacation doesn’t actually start until you are finally able to walk through the airport exit, wouldn’t you choose the former?  Well, how about an outdoor experience where all of the frustrating elements are removed and you are able to maximize your leisure time by doing the fun activities you head out into the open yonder for? 

 Now I love the idea of sitting around a campfire and getting out amongst nature, but cringe when faced with the thought of struggling with tent poles, sleeping on a lumpy ground and bugs.  “Glamping” (glamorous camping) has taken camping to another level, one that involves your very own butler! Waking up in the morning on 300-count cotton sheets to the sound of water rushing over the rocks of the legendary Blackfoot River, and actually knowing where my toothbrush is, makes for a great start to the day.  No longer having to scurry around looking for firewood to start the morning breakfast or sleep in a musty smelling sleeping bag.  This new style of camping will allow you to enjoy every moment of your outdoor adventure, without the frustrating elements which bring you down from your fresh-air-high.  We live in an era where we are always looking for ways to maximize our time.  We can do this by flying private instead of commercial, we can text 5 people in seconds, and we can have our campsite butler do the dirty work!  

 Glamping sites are popping up everywhere, and at Paws Up in Montana none of the creature comforts of home are missed.  Your 270-square-foot, beautifully-appointed tent comes complete with king-sized bed, electricity, spacious deck, nearby private master bathroom (with heated floor), twice-daily housekeeping service and butler-prepared gourmet meals.  I mean really, who wants to collect firewood and cook canned food at the end of a long day of horse riding or golf?  It allows you to sit, wine in hand on your very own deck and take in the fresh air, the spectacular view and delight in the fact that you are glamping, not camping.     

With glamping’s focus on comfort and convenience, it is easy to spend most of your time doing what you really want to do when you camp, and that is experience the outdoors. For me, you’d have a hard time getting me off of the saddle of a horse, but you might find your favorite place to be on a mountain bike, behind the wheel of an ATV, or breaking in a new pair of hiking boots.  Every day brings new beauty and adventure and since the warm summer days in Montana seem to never get dark, you will fill your adventure vacation with hundreds of moments you’ll never forget – from the very moment you step onto your private aircraft.

Glamping is for those only wanting to sleep under “5 stars”.

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This week, our company completed validation flights with the FAA to add a 30-seat Jetstream J41 to our fleet of charter aircraft. We have been working on adding this aircraft type to our fleet for over a year now.

Typically, it does not take us that long to add an aircraft; but, this one was different. When you operate aircraft with over 19 passenger seats, the FAA requires that you have flight attendants and all of their programs, including flight attendant training manuals and flight attendant operations manuals that describe how we will operate this aircraft with a third crew member. What seemed to be a simple process, in reality, turned out to be pretty in-depth and complicated process.

On Tuesday, I got to ride along as a passenger on a day’s worth of flights where we proved to the FAA that we can safely and effectively operate a three crew aircraft.

All day long, on every flight leg there were simulated emergencies, sometimes multiple issues at a time, which tested our people on how we would handle it if it really happened.

We had simulated in-flight fires, babies who stopped breathing, unruly passengers who tried to light up a smoke in the lav, and a brake failure that resulted in running off the runway and into a body of water.  With the exception of the unruly passengers, I expect and hope the rest of the simulations never happen in real life; but, it is good to know that we rehearse and have a procedure for each of these events.

When the US Air flight went into the Hudson River, the pilots and flight attendants handled it professionally and efficiently and everyone on board survived it. Had they not trained on these type scenarios, the outcome could have been totally different.

I have a new found respect for what goes on behind the scenes with training flight attendants for the emergencies that most of us will never see. Day in and day out, flight attendants for the airlines and charter companies perform cabin service and give the passenger briefings that too many people ignore. What we will never see as regular passengers is the training done to prepare the crew for all types of emergencies.

We try consciously to avoid making Plane Conversations an advertising site for our company in the spirit of promoting our industry; however, in this case, I will brag on our group of pilots and new group of flight attendants who performed in an excellent manner. They had a group of FAA inspectors looking over their shoulders for several days, and in some cases also playing the part of the “unruly passengers.” The pressure was applied to our people and they handled it and passed the test.

Reaching this level of operations for a charter company is a major accomplishment and I am proud of our people. I have said it before – I am privileged to work with the best pilots, dispatch group, maintenance personnel, management team and now flight attendants that anyone could ask for.

In our business the people make it happen. All the nice shiny aircraft are great; but, without the best people the machines don’t fly safely and efficiently.    

The aircraft we will be flying is a 30-seat British Aerospace Jetstream J41. It cruises at close to 300 knots and operates much more efficiently than regional jets. With this aircraft we will be able to service clients who need to move groups of people between cities where airline service can’t do it in a timely manner.

With the cost effectiveness of the aircraft we can, in many cases, beat the fares of the airlines and still offer the convenience of charter.

As the airlines consolidate, I predict you will see more and more operators around the country offering charter service to groups of people moving between city pairs that don’t have good service.

The 30-seat turboprop is ideally positioned to meet this unmet demand. It is alive and well!

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Of the many fun reasons to pilot new Embraer Executive Jets, one of the best is St. Martin.  Located in the Lesser Antilles island chain, the French/Dutch Island of St. Martin (or St. Maarten) is a convenient stop when ferrying aircraft out of South America.  The clear, blue Caribbean Sea is the perfect backdrop for this European tropical oasis. 

Located on the more raucous, Dutch side of the island; Princess Juliana International Airport is famous for its runway which begins just a few steps from the Caribbean.   Tourists like to hold onto the airport fence when jumbo jets depart, letting go at full throttle up for a brief flight of their own backwards into the surf.  And the Dutch brew Heineken…here it is half the price of your neighborhood package store.  On the opposite, French side of the island, are restaurants and hideaways well known for French cuisine and quiet honeymoons.   But here on the Dutch side, casinos and lively night life are the norm.

After a long day including three technical stops; the ground crew of Arrindell Aviation Services, www.arrindellaviation.net  is a welcome sight.  Henke is there to meet us with a very short ride in a gleaming white van over to the Sonesta Maho Beach Resort.

At the Sonesta, we all enjoy a quick clean-up prior to falling into a chair at Cheri’s Café just across the road.  Cheri’s is “island chintzy” but is just what we’re looking for with smooth tropical drinks in a very casual island setting.  The local band preys upon the tourists who take a willing part in the evenings shenanigans.

If you are lucky enough to arrive before sunset, I recommend you watch the water, airplanes and the sunset from the Sunset Beach Bar.  Just a short walk from the Sonesta Maho Beach Resort, the Sunset Beach Bar offers just the right elixir to rub off a full day of flying.  www.sunsetbeachbar.com

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In our ongoing discussions about how to reduce the costs of flying private aircraft by putting together a way to share a ride I posted a blog titled “Would Business Travelers Share?”

We believe that people would be willing to share a private jet flight with others provided it left at a mutually agreed on time both coming and going.

So if you can answer the when question (when we all want to go) what about the who (who will I share a ride with) question?  

Who you would share the flight with?

Would you share a flight with your competitor? Probably not. You would not want to have your competitor in close quarters for two hours listening to your discussions about today’s meeting or presentation.

If you are on a business trip would you share the flight with a group of college kids going to spring break and ready to party?

When you ride on the airlines you don’t have much choice who you sit next to. You may get lucky enough to sit next to Kevin Smith and share his space? Or a bratty kid who keeps kicking you and you can’t kick back?

If you were sharing a ride on a private jet charter flight it would be very easy to know in advance who was sitting next to you. With all of the social media profiling surely you could just go take a look at your seat mates Facebook page or LinkedIn profile and figure out if they might be OK to share the flight with. It would seem that knowing who you are riding with could be very easy to determine and even control.  

You never know, the person you share the flight with may end up being your next friend, client, partner, collaborator…..

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On January 25, Dan Robles suggested that Social Currency might be used to fight terrorism. Some of our friends on Linkedin joined the conversation. 

Greg Johnson, President, CEO and founder of OneSky Jets, says:

“I think there are a few interesting points of discussion in Dan’s latest post. The first relates to where we catch terrorists… Trying to stop them at the airport checkpoint is an effort in futility. Terrorists are a determined lot and as Dan states, they only have to succeed once. The answer lies in knowing more about everyone who elects to fly as personally invasive as that may sound.

The U.S. and other countries are already starting to collect more data from passengers…birthdate and place of birth in addition to name, even on domestic flights. There has been an ongoing debate about a federal ID card although my opinion is that an additional card would be redundant. The databases exist today to to give law enforcement a pretty decent ability to profile passengers and I only see that capability expanding.

The typical terrorist’s desire to keep a low profile works against them when they are attempting to blend in to an increasingly data-driven society. The absence of data or abnormal patterns will stand out.

I don’t believe that “social currency” on its own is enough. There are billions of peaceful people on the planet that are not actively engaged in social networking today. The fact that my Mother isn’t on Facebook, LinkedIn, or MySpace shouldn’t (on its own) subject her to an additional level of security screening, however a college student today without an online presence might throw a red flag or two.

Also, don’t think that law enforcement isn’t already leveraging social networks. I have an associate who has been involved in government facial recognition projects. When the government needed a database of names and photos to test this new technology, where do you think they went? The publicly available pages of Facebook!

So the net/net here in my opinion is that the publicly available data in social networks can and will be used by governments of the world as one facet in a multi-dimensional campaign to know who is flying before they get anywhere near the airport and in the big picture, that’s a good thing.”

Mike Osborne, Operations AME at Honeywell, shares this concern:

“How do you propose to ascertain their networks and claims? Either or both seem easy enough to falsify.”

My reply is:

“I believe that the idea is to go for a “preponderance of evidence.” Just as the lack of a credit report, utility bills or bank records casts doubt on the authenticity of an identity, the lack of social credit and social activity history casts doubt on the social interaction and perhaps even identity of the passenger. Certainly, just as false credit reports, etc. can be created to support an alias, false social backgrounds could be created to support it as well. I think the point that Dan Robles is making is that to create monetary history and social history that coincide is difficult and would make it more difficult for terrorists to support several believeable aliases.”

Kenneth J. Goldstein, President at KJG International Consulting, responds:

“No as left to their own devices, most would not provide a sufficient background to grant the rest of us security.”

What do you think?

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A Saturday, February 27th article in the Columbus Dispatch, by  Marla Matzer Rose covers the story on NetJets and Warrens Buffett’s letter to the stockholders regarding the company’s performance.

I posted on November 17 about the announcement of NetJets pilot layoff. At that point, revenues were off 41% and new aircraft sales were off 79%. Since that post, more layoffs have happened and in this article, the following is stated by Warren Buffett about the financial situation at NetJets:

“In the eleven years that we have owned the company (NetJets), it has recorded an aggregate pre-tax loss of $157,” Buffett said in his letter. “Moreover, the company’s debt has soared from $102 million at the time of purchase to $1.9 billion in April of last year. Without Berkshire’s guarantee of this debt, Net Jets would have been out of business. It’s clear that I have failed you in letting NetJets descend into this condition.”

Buffett said he had been “bailed out” by David Sokol, whom he appointed CEO of NetJets in August after the abrupt resignation of longtime CEO Richard Santulli.

Buffett praised Santulli for instituting “top-of-the-line standards for safety and service” at the company that are being continued, but said that the leadership of Sokol, who is chairman of Berkshire-owned MidAmerican Energy, and considered one of Buffett’s likely successors has been “transforming: Debt has already been reduced to $1.4 billion, and, after suffering a staggering loss of $711 million in 2009, the company is now solidly profitable.”

Buffett echoed what Sokol has said about NetJets, that it is “likely to operate at a profit in 2010, assuming there is no further deterioration in the U.S. economy or negative actions directed at the ownership of private aircraft.” For 2009, NetJets posted a $711 million loss. The losses were largely due to write-downs on the value of aircraft, with a smaller amount attributable to the cost of laying off workers.

Much like the financial performance of the airline industry, NetJets has not made a profit in aggregate for the past 11 years.

Something is wrong with a business model that has an aggregate loss over the long haul and we are plagued with it in both the airline and private aviation industries. More money has been lost than has been made, and because the industry is glamorous, more money will pour into bad business models in the future.

According to Mr. Buffett, the company is now solidly profitable since all of the cuts in both pilots and overhead. So what has changed about the business model to fix it? Do they shrink their way to profitability?

What created the situation in the first place? Was the model broken to start with and just needed a deep recession to make it obvious? How do you lose more in one year that you can make in 10 years? 

On this site we talk about the airlines and their broken system but private aviation has its fair share of issues and financial problems. Something has to change if we are to sustain long term viability as an integral part of the national transportation system.

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