Plane Conversations

As I write this I am returning from a two day trip to the Caribbean.

Our company works with small airlines leasing aircraft, providing maintenance support services, parts support and training. We do much of our business outside of the US.  

I had the opportunity to catch a ride on one of our leased aircraft going to Tortola, BVI to swap out for another aircraft coming back to Tennessee for scheduled maintenance.

The aircraft we flew down and back were Jetstream 32 – 19 passenger turboprops, one type in a group of regional airline aircraft that will continue to work for small airlines around the world for years to come.  

BVI Airways  started a few months ago providing point to point service between Tortola  and St. Maarten and Antigua. They also do charter flights to the other islands. The airline was started by three US pilots who have worked in the regional airline and air charter industry for most of their aviation careers. They saw an opportunity to fill an unmet demand for travel between Islands and took the leap of faith to start a small airline far from home. If you are going to start an airline it may as well be in a nice place like Tortola.

BVI Airways has an excellent business plan that allows them to be flexible with their routes as travel needs change with seasonality and times of the year when the islands have special events like carnival and homecomings.

After a short 14 hour visit to Tortola we flew up to San Juan PR and met with a startup airline, Lebar Air, that will be providing both scheduled and on demand charter service out of San Juan to the Dominican Republic and other islands within a 250 mile radius of San Juan. They share a similar business plan as BVI Airways but serve a different niche market of travelers.  

As I think about these two operations and other operators we have gotten to know in the Caribbean, including operators in the Dominican Republic and Haiti, I see a group of small airlines that are meeting demand for point to point intra-island and inter- island travel which the major airlines and their commuter feeders don’t meet.These airlines are a cross between a scheduled airline and on demand charter operator with a nimble flexibility the big airlines cannot match. When you ride on these small airlines, the feel is much more like a charter flight where the pilots are talking to you and helping you with your luggage before you board. Islanders are used to this type of service and take small aircraft flights as a routine way of life.   

 From the perspective of the operators we work with, the economic outlook for Puerto Rico and the British Virgin Islands is good. Like the US, they have waded through the recession, but the allure of the islands continues to spur development of new hotels and resorts and all the support businesses that go with it. With new resort development and tourism growth come jobs and economic growth for the entire region. As more travelers come to the Caribbean from Europe, North America and South America the demand for inter-island air travel will grow.

These small airlines that meet the market demand are poised to prosper as they provide a very critical transportation component to the regions economic development.

I am a little jealous of these operators because they have a captive audience of travelers. You can’t just get in your car and drive from Tortola to Antigua like you could from Nashville to Atlanta.

The only complaint about the trip south was the lack of time to enjoy the white beaches and blue water. I think I could easily get used to the speed of island living.

Click on pen to

Suppliers push products and services to market. People represent the pull for products and services through demand.

In economics, supply and demand describe market relations between prospective sellers and buyers of goods and services. The supply and demand model determines price and quantity sold in the market. The model is fundamental in macroeconomic analysis of buyers and sellers and of their interactions in a market.

Suppliers, manufacturers, service providers and distributors that have realized efficiencies in their supply chains – but that have struggled to gain similar returns from classic customer relationship management (CRM) solutions – are now increasingly embracing demand chain management (DCM) technologies to cut costs and optimize sales processes.

Demand Chain Management is the management of upstream and downstream relationships between suppliers and customers to deliver the best value to the customer at the least cost to the demand chain as a whole. The term demand chain management is used to denote the concept commonly called supply chain management, however with special regard to the customer pull.

The more widespread adoption of social technologies, combined with the challenging sales environment stemming from the conversational rivers enabled by the social web will cause selling organizations to heighten their focus on the demand side of the value chain.

What is The Demand?

Fundamentally the social web has enabled people to have a voice about anything and everything. When the lowest expectations about a product or service are not met the conversations swell like rivers and spread one to one to a million at the click of a mouse.

Tomorrows leading companies will have to engage people through the social web if they hope to fulfill the pull created by conversations. In doing so, they help themselves by acting on the conversations centric to speeding up cycle times, eliminating redundant activities, extending market reach, and most importantly, enabling buyers of all shapes and sizes with more choices and with greater input into, and control over, relevant business processes.

Many people are tired of companies controlling the conversations about their products and services. The old tricks of the trade are no longer tricks but obvious ploys for people’s attention and the people aren’t buying the tricks anymore.

The old theories of supply and demand have been centric to microeconomics. The new theories will become centric to conversations and the impact said conversations have on markets and the subsequent economics of those markets. The people are now in control of the conversations they want to have, the questions they want answered, the products they want made, the services they want to have and most of all the quality they need. If existing markets aren’t listening and participating they will likely be replaced by those that do.

As the social web becomes more “open” with less walls created by silos the conversational rivers created by the people will become more connected and more influential over markets. The demand on businesses will be for higher quality of service and performance and hiding behind slick marketing messages will become more and more transparent and irrelevant. The shift from supply to demand will have profound effects across every business segment and demographic imaginable.

Demand side economics is a chain controlled by the customer. The larger the chain the greater economic influence over markets. Doc Searls’ VRM vision is to enable more power and influence from the demand side of the supply chain.

Click on pen to

Good news for the economy and the airlines, not so good news for the traveler, especially the business traveler.

In a May 31 article in the NY Times by JANE L. LEVERE  the word is that flights will be full this summer and airline fares will be up 

Quoting from that article:

This is not going to be a good summer for air travelers. They face a potential combination of crowded flights, high fares and labor disruptions. And that does not even consider the possibility of more canceled flights because of new penalties for airlines that encounter long tarmac delays or the potential of continued disruption in Europe from the volcano ash drifting from Iceland. Demand for business and leisure travel is expected to be stronger this summer than last, which means travelers will be fighting for seats that have been reduced significantly during the recession.

The article goes on to say:

…double-digit increases in demand are in no way being matched by similar increases in the number of seats. The Air Transport Association, the trade group of the American airline industry, said domestic capacity will be only 0.2 percent higher this summer than last, while capacity on international routes will be up 6.6 percent.

“Seats will be limited,” said Michael Derchin, airline analyst for CRT Capital Group in Stamford, Conn. “It’s going to be a more difficult travel experience for business people, with 90 percent load factors in the peaks.”

This is not good news for the business traveler who is already beaten up by the day to day rigors of flying the airlines. The idea of every flight being full and what happens when flights cancel, and the chaos that ensues trying to get people on the next flight that is also full is something that no one looks forward to. And the coveted middle seat will now be occupied. Maybe by you! Oh joy!

The article discusses the possibilities of disruption from volcanoes and labor strikes here in the US and the UK and the additional flight cancellations due to the new DOT rules on how long the airlines can keep us on the tarmac waiting to depart.

All depressing stuff if you are a road warrior.

The article closes with a suggestion that you have other options if it gets too bad. You can take a train or drive or just not go at all and video conference. What about the option of flying but not on the airlines? Anyone thought of that option?

Being the eternal optimist, where is the lemonade in this pile of lemons? 

Business and Private Aviation have the ability to meet the needs of the traveler without the hassle and frustration you experience with airline travel. The only limiting factor to more people using private aircraft is price.

So as the price goes up on the airlines, and the experience gets worse, does the gap close between the price versus experience of airline travel and private aviation? The system of airline travel is doing it’s very best to help those of us in that other aviation industry called General Aviation. We could not ask for a better competitor.

Through technological innovation of the aircraft we fly and innovation in how we meet the market of travelers we should close the gap of price and increase the value proposition on our side.

The time is right. Let’s not sit around and miss the window of opportunity.

Click on pen to

When you go into a store to buy anything, the rational person will always compare the quality of the object against the price of the object versus any alternative products or markets.

When you buy a home, the property is characterized by descriptions for “quality” (construction, neighborhood, schools) and a series of  ”quantities” (number of bedrooms, square footage, price)

When you cross the road, you look both directions in order to assess the quantity and the quality of the traffic that may or may not kill you.  Are the traffic slow moving pedestrians or are they fast moving trucks?

When a bank makes a loan, they “quantify”  all of your valuable things like your home, cars, 401K, and personal income and they use the credit score to measure the quality of your finances (debts, credit pulls, past history, bankruptcies, etc).

Supply and demand cannot, absolutely cannot, be determined by any other means other than by measurements of quantity and quality.

In fact, economics is the science of incentives where the fundamental graph is the supply and demand curve.  Both supply and demand behave according to inputs of quality and quantity, specifically price and availability.  Supply and demand for anything absolutely cannot be determined by any other means than by coordinates of quantity and quality.

Investors manage risk.

Risk is an asset, if it weren’t, insurance companies would not exist.  There are three things that an investor must know in order to manage risk.  1.  They MUST be able to identify their exposure to peril.  2.  They MUST be able to estimate the probability that the peril will or will not impact them.  3.  They MUST be able to determine the cost of the consequences in the event that the peril happens.

Again, within the definition of risk – to which ALL INVESTMENT RESPOND, are the characteristics of an asset; what is the quantity (1) and (3) and what is the quality (2) of the peril.  If the investor does not CLEARLY SEE these three positions, they will not invest. Period.

This is what drives successful markets and what kills unsuccessful markets.

To ignore the fact that all rational human behavior, intentions, decisions, reactions, conversations, relationships, education, ideology and every other state of human consciousness in a market, corporation, community, family, or social network ARE NOT characterized in the form of a quantity and a quality, is frankly, ignorant to ones market, irresponsible to one’s community, and incompetent to one’s profession.

Yet so many people do not see themselves as an asset.  Maybe someone should give people permission.

Click on pen to