Plane Conversations

A January 17 press release from Embraer announces that Embraer delivered 100 Phenom deliveries in 2010 making it number one in most deliveries. That’s pretty impressive for a new aircraft that was only certified at the end of 2008, and especially taking into consideration the economy.

An excerpt from the press release:

One hundred aircraft delivered: more than any other business jet in the world.

São José dos Campos, January 17, 2011 – Embraer’s Phenom 100 entry-level executive jet was number one, with 100 deliveries in 2010. Together with the other airplanes of Embraer Executive Jets’ portfolio, the Phenom 100’s success is also reflected in the Company’s increasing market share, which is the fastest growing in business aviation in terms of units delivered.

“Its clean-sheet design, superior cabin comfort, amazing performance, low operating cost, as well as the jet’s great looks, have thrilled our customers,” said Luís Carlos Affonso, Embraer Executive Vice President, Executive Jets. “We are honored and thankful to our customers for their choice and confidence in the Phenom program and in the Embraer brand.”

Our delivery group at JetQuik, led by Bill Minkoff, has delivered 16 Phenom 100 and  2 Phenom 300 aircraft to customers in the US and Europe since October 2009. The acceptance and deliver process gets smoother with each delivery. Embraer is building great aircraft.

We are proud to be managing and operating two Phenom 100’s in charter service. They have gained good market acceptance with our charter passengers and are proving themselves as they get time in service.

Congratulations to Embraer for making a great entry level business jet.  I look forward to seeing the Legacy 450 and 500 aircraft when they reach certification and production.

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Photograph by: Chris Ware, Getty

Bloomberg and Associated Press report that June 2010 airline traffic rose 2.3% over June last year with US airlines carrying 65 million passengers. Annualized that comes to 780 million passengers. DOT projections say we will hit the 1 billion annual passenger level in the US in about 10 years.   

In spite of low customer satisfaction with airline service, people keep coming back for more. If you listen to all the grumbling you would think that, surely, travelers have had enough.  

The need or desire to travel must outweigh the pain of going to the airport and flying by airline.

People don’t like to fly the airlines but they keep doing it and the numbers are growing.

People love to fly in their own aircraft, ride in the back of a business jet or even a prop aircraft on their own schedule, and without the hassle of airline system,  but our industry languishes in this economy.

What is wrong with this picture?

It seems that price outweighs most considerations for the masses when it comes to travel.

Wouldn’t we all rather ride in a private jet if we could do so for the price of a Southwest Airline ticket?

How do we move a very small percentage of the market of travelers over to our side of the game?

It would only take a very small percentage of those 780 million annual passengers to radically change the fortunes of business and private aviation from manufacturers to service providers to the operators of the aircraft.

Move a few percent of the market share of travel to business and general aviation and, suddenly, the world looks a lot brighter for those of us in this industry.

I see a lot of effort being put forth; but, mostly, the efforts are in their own silos. I don’t see a lot of effort as an industry working together to solve the problem. There seems to be a general acceptance that it is what it is and that the situation on a macro level is not going to change quickly anytime soon.

It is worth thinking about to see if we can come up with solutions, isn’t it?

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There is a lot of buzz these days about “social”, evidenced by the fact that anytime a topic is brought up online with the words “social” or “social media” all of us who claim to be social tweet it out. 

So what is social and anti social about the experience of traveling by air? 

A good definition of social in this context of travel is “allowing people to meet and interact with others in a friendly way”.

Conversely, Encarta defines antisocial as “hostile or indifferent to the comfort or needs of other members of a community or society as a whole”

So here’s a question for those of you who travel routinely in the airline system: 

Would you rate the experience of airline travel social or antisocial based on the definitions presented above? Is the experience friendly or hostile?

Maybe hostile is too strong of a word to use to describe traveling by airline but “indifferent to the comfort or needs…” may accurately define the experience.

As I queue up in line to take off my shoes, unload my I-Pad bag, get searched, wanded and body scanned I don’t feel real social. The weary and worn out road warriors who spend valuable hours in the waiting areas of terminal buildings most likely don’t feel social either.

Compare the experience of airline travel against the experience of traveling in a business jet or even in a small private airplane.

Come hang out in the lobby of a fixed based operation, a terminal for private flights, and see the difference in the traveler’s demeanor over what you see at a busy hub airport.

We see it every day in our business. Smiling people passing through the lobby departing to go on vacation or a business trip, or getting ready to go home from a trip, knowing they will be back home soon. Knowing the experience they are about to have will be positive from beginning to end.

I grew up flying in small airplanes and some of my fondest memories of travel were the flights riding up front with a father who was a corporate pilot. The passengers in the back of the aircraft most always enjoyed the trip with my father smoothly flying them to the destination. Even when the weather did not cooperate he somehow still made it a good experience.

So what’s it worth to you to have a social versus antisocial travel experience?  

Is there a monetary value difference in the two experiences?

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A business aircraft is a productivity tool. It is no different than any other tool we use in business to become more productive. It has a cost and it brings, or should bring, value. The value has to exceed the cost. If it does then we get a positive rate of return on the investment. If the value does not exceed cost then it is not a good investment.

All of the mainstream and social media conversations about the “extravagance” or “corporate excess” associated with the business jet play well with the anti big business crowds and populist politicians, but they lack substance. So far, these conversations have had nothing to do with the reality of what a business aircraft does to enhance the productivity of a company and its most valuable assets – its people.

The discussion about the value of business aircraft should be all about productivity. If using business aircraft increases the productivity of an organization, and the measured gain in productivity exceeds the cost, then it makes sense. Bottom line!

I just purchased an iPad. I can use this device to increase my productivity in internet research and communications or I can play games on it. How I choose to use it doesn’t make it inherently good or bad. How I use it does determine its value in my personal and business productivity.

In that way, a business jet is no different than an iPad.

Those of us in business aviation need to do a better job of first understanding, and then selling the value proposition of business aircraft as a tool to enhance productivity.

Billions of dollars have been spent in research and development of new high technology aircraft that will take us higher, faster and further on less fuel.  All the while, business aviation has invested very little in the technology to truly measure the enhancement of productivity gained by flying in a private aircraft. It is not just the time saved that we need to measure and quantify. What about the social and physiological experience of travel and its effects on human productivity and creativity?

Additionally, we should invest in the technology to learn how to better utilize the business aircraft to bring the costs down. How do we cut the inefficiencies of business aviation without reducing the experience?

An industry-wide increase in the efficient use of the business aircraft coupled with a measurable understanding of the value would do more than just silence the naysayers. More importantly, it would grow the industry that supports business aviation and bring an innovative increase in the productivity of our economy.

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Gulfstream General Dynamics recently rolled out the new G650 and will begin test flights for certification before the year’s end.

This aircraft is an all-new design (clean sheet) that employs the best technologies Gulfstream and this country have to offer in creating a new generation global jet.

With all the negative press and bad political rancor about the use of big corporate jets, it would be easy to dismiss the G650 roll-out as the production of just another aircraft to meet the needs of the few business and superstar elites who have the money to buy it.

However, the introduction of this aircraft is so much more than that.  It deserves a standing ovation from the press and from the American public.   For starters, in a time when manufacturing jobs are being shipped overseas, this aircraft will be produced in Savannah, GA. I don’t have the exact number of anticipated future orders or the locations of the G650 customers, but given orders on previous models, it is safe to say that international companies and individuals will place at least 50-60% of the orders.  This translates into trade deficit reducing exports and economy supporting jobs for the US.

The performance and mission capabilities of the G650 will be unsurpassed by any other aircraft.  It will have a non-stop range of 7000 nautical miles and cruise at speeds .92 mach( 92% of the speed of sound) in high-speed cruise.  No other business jet in production can match this performance.  The cockpit will employ the latest generation technologies to make the aircraft safer and more efficient.

Since Gulfstream has a reputation as the premier manufacturer of long-range corporate jets with fantastic reliability and worldwide support, multinational companies and governments worldwide will use the G650 in civilian and military service.

Globalization is here whether we like it or not. Governments and multinational companies alike need to reach the rest of the world quickly. Some of our country’s greatest companies are now operating all over the world and need to reach their markets, suppliers and manufacturing facilities to make their businesses more efficient. It is a fact that travel is a necessity and not a luxury for businesses and governments.  The G650 will be the next generation aircraft to make worldwide travel happen.

Those of us who have  grown up in this business have all admired Gulfstream since the GI first flew in 1958.  I applaud the group of people at Gulfstream who have taken the G650 from the drafting table to the tarmac.  These people represent our country’s best in corporate leadership,  innovation, engineering and manufacturing.  Designing a new aircraft from scratch and taking it to production is not for the faint of heart.  The process takes years of work and, in some cases, billions of dollars.  Those who make the decision to design and build a new aircraft have to look years into the future to understand demand and long-range return on investment. The designers of the G650 had a clear and exciting vision that is resulting in the aircraft that is clearly the new top of its class in corporate aviation. The other guys will now have to play catch up!

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Over the last seven years we have been reading about, watching and waiting for the next generation of efficient private jets to arrive.  Finally, they are here with a promise of more to follow.

There have been many starts and stops and failures along the way.  Names like Eclipse and Adam Aircraft showed great promise but could not deliver or passed out before crossing the finish line of the race.

Innovation comes at a high price in our business and is not for the faint hearted.  Billions of dollars have been invested in the industry and most of it has vanished.

Now to the Good News:

Two industry giants have made it across the finish line.  Cessna with their Mustang and Embraer with the Phenom 100.

The aircraft that is most impressive is the Phenom 100 manufactured by the Brazilian company Embraer, known for its rugged and efficient regional airliners.  It is fascinating to me that, possibly for the first time in our industry, a manufacturer of airliners made the decision to step into the private jet manufacturing business.  Airline manufacturers have to make aircraft that are reliable and efficient.  The airlines who buy their product to put into service have very little tolerance for failure when it comes to durability,  reliability and after market support.  Additionally, they demand an aircraft that is cost-efficient. Airlines live and die on the cost per seat mile and the manufacturers know they have to deliver or else. There is no brand loyalty. Its all about the money.

Take a company like Embraer who has prospered in the airliner environment and transfer the knowledge of design, production and after-market service  into the business jet world, and you get a business jet that looks like a private jet but is built like an airliner.  When I see this aircraft up close the first words that come to mind when comparing to other light jets are rugged, solid and  yes, even good looking.  You don’t have to compromise  an aircraft’s good looks for durability in our business.

The Phenom 100 and subsequent models to follow (Phenom 300) are  designed to last more than a lifetime of average use in the private jet industry.  Starting from a clean sheet of paper and utilizing the best design technology available to only the likes of Boeing and Airbus, the engineers in Brazil have designed an airframe that is sleek, fuel efficient and has safe flight characteristics, making it easy to fly (for those jet owners who fly themselves).  Additionally they listened to the market and employed BMW Design Works to work with them on the interior design of the cabin finishes and ergonomics.  And last but not least, they employed the latest technology available to give the pilot all the tools that a new generation airliner has in a simple and user-friendly presentation.

Be on the look out for the Phenom series of light jet aircraft – these guys are here to stay and they are innovating.  Their aircraft will be a major player in the innovation of our industry to make the private jet more affordable to more travelers.

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