Plane Conversations

Last weekend I was in Chicago as a guest of Apex Brasil  to attend the Peak Anti Freeze and Motor Oil Indy 300 Race. This was the first Indy race I have attended and I hope not the last. Tony Elrod, with ETA Logistics , drove us from the airport to the hotel and promised that I would be hooked on racing after the first event. I have to admit he was right.  

Melanie (my better half) and I arrived in Chicago Friday afternoon in time to get to the hotel downtown and attend a dinner hosted by Apex Brazil at Texas de Brazil Steakhouse Churrascaria. I have been to an authentic Churrascaria in Sao Jose Dos Campos while visiting the Embraer factory. Texas de Brazil has them beat on décor and sizzle but I would give them a tie on the food quality and flavor of the beef.

Apex Brasil (The Brazilian Trade and Investment Promotion Agency) was created by the government of Brazil to promote companies in Brazil to the international market. To promote Brazilian companies here in the US they have become a major sponsor of the Indy Racing Series. They do an excellent job with connecting their businesses through the face to face networking of events like these races.

As a part of their race sponsorship, Apex Brasil is supplying pure ethanol fuel to power the race cars. Brazil is a world leader in the development and production of bio fuels. The major producers of ethanol in Brazil are now working on an aviation fuel to power commercial aircraft. 

Our business connection to Brazil is through Embraer Executive Jets as an operator of two Phenom 100 light jets. We have also delivered 11 aircraft from Brazil to new owners in Europe and the US as a provider of delivery and mentor services.    

Saturday we went to the race track early afternoon for a tour of the pit and garages where the teams were making last minute preparations and going through inspections prior to the race. It is fascinating to see what goes on behind the scenes of a major race. Just prior to the race we were able to walk by the cars, out on to the track and watch up close as the drivers were introduced.

I was glued to the seat the entire race, and listened through headphones connected to a scanner to the conversations between drivers and the spotters. What a great way to get into a race by hearing the teams talk as it is happening real time.

Sunday we had the day off and took the Chicago Architectural Foundation  boat tour on the river. The tour lasts 90 minutes and is packed with information about the buildings that make up the skyline in Chicago. Chicago was the first city to have skyscrapers, and is rich with architectural heritage. I would highly recommend this tour as a way to learn about Chicago.

On the way back to the airport, Tony recommended going through the drive through at Portillo’s for an Italian Sausage Sandwich on a French Bread roll with grilled Sweet Peppers and Mozzarella. What a treat and a fun way to end our stay in Chicago.

Thanks Tony for getting us to and from the airport with great conversations and thanks to Apex Brasil for a great weekend.

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Yesterday we examined internal costs aircraft operators incur and how those are covered in customer quotes.  Those costs are a little bit subjective and may vary from one operator to another within a region and will certainly vary between regions, simply because the costs of living in those regions vary.  Today we will take a look at costs incurred by aircraft operators over which they have little or no control.

Landing and/or Handling Fees- Landing fees are generally assessed by the airport or port authority operating the airport the aircraft operator uses.  These landing fees are based on aircraft weight and may be waived in the event of a Life Flight, but otherwise, landing fees are collected for every aircraft that lands at or takes off from an airport.  The fees vary widely and are sometimes not billed until months after the flight.  Handling fees are generally assessed by the ground handler, which may also be called a Fixed Base Operator or an FBO.    These fees also vary widely.  For light jets, we typically pay around $275 per landing; however, at Boston’s Logan Airport, Miami International and Chicago O’Hare, we have paid as much as $900 per visit.  These fees may be waived with a substantial fuel purchase.

International Fees – Some other countries charge for use of their airspace, whether we land in that country or not.  Other countries charge for flight planning, landings, customs processing, and agricultural fees, among others.  These fees are set by the country involved and are not waived.  These are sometimes also not billed to the aircraft operator until months after the flight.

Fuel Surcharges – Just as automobile gasoline prices fluctuate, so do aircraft fuel prices.  If fuel prices jump for some reason like a storm, oil spill, vacation season, an operator may elect to charge a fuel surcharge to make up for the increased costs rather than recalculate their entire rate structure.  This allows for the charge to be eliminated when fuel costs decrease again.  If the rates increase, but do not decrease after a period of time, the fuel charge may be absorbed into the hourly aircraft rate.

Insurance Surcharges- I have seen these surcharges only once and only for a brief period of time.  After the attacks of September 11, 2001, aircraft insurance rates rose – although, as CS&A’s Tom Chappell informed me in January, not as a result of the attacks.  The general aviation industry was grounded, re-regulated and losing money.  In response to these dramatically and unexpectedly increased costs, many operators introduced different kinds of surcharges.  This insurance surcharge was one of those, but I haven’t seen it used in a long time.

Even operators who issue hard quotes for your trip will exclude some items that are difficult to predict.  Among them are de-icing or inclement weather hangar fees, special catering requests, and flight phone usage fees. 

De-Ice or Inclement Weather Hangar Fees- If your trip takes you to Milwaukee in December, it’s a pretty safe bet that it will snow while you are there.  If it does snow, your aircraft will have to be de-iced to removed the precipitation or it will have to be put in a hangar to keep the snow off of it or to melt the snow.  Regardless of which method of snow removal is used, you’ll have to pay for it.  As of today, de-ice fluid costs about $15 to $18 per gallon to apply.  Some airports have special de-ice pads with a run-off system that collects the used fluid; however, others charge another $0.82 or so per gallon in EPA fees to clean it up.  That gives us a total of nearly $16 to $19 per gallon and since you can easily use a couple hundred gallons in a single procedure, the total bill can climb quickly into the thousands of dollars.  Compare that to hangar rental at between $100 and $500 per event and it’s no stretch to guess which method we prefer using whenever possible.

Special Catering- Most business charter customers use our service because of the expediency we offer.  In line with getting the most done in the least amount of time, many of them would rather eat their meals in-flight than waste that time on the ground having lunch.  Ordering catering for your aircraft is not normally a difficult thing and it’s something that we are all happy to do.  However, catering for aircraft is not inexpensive.  I once had a caterer in South Carolina charge me over $250 for two dozen doughnuts.  I was just certain that the charge was a mistake, but, no.  When I called to get the error corrected, the caterer informed me that this was simply what two dozen doughnuts cost.  I think that he may have actually said that with a straight face, too.  If you are budget conscious on catering, be sure to mention that to your charter operator or broker.  There are solutions which allow us to lower those costs for you.  Your presentation might not be as fancy, but if I have to choose between having a coronary when I get my bill or having an edible orchid on my plate, I’ll choose the healthy heart every time.

Flight Phone Usage – Some charter aircraft are equipped with flight phones.  Passengers do use them from time to time and, since we pay by the hour for their use, that’s how we charge it out.  As of today, the phones on our aircraft are about $2 a minute to use.

Several times over the last few months, you’ve heard us say that charter aircraft operators are not in the business to make a boatload of cash.  If they are, then they are going to be sorely disappointed; the margins in this industry are just not that big.  Now that you know what the line items on your quote or on your invoice are, you are better educated and more equipped to compare quotes between companies and to understand what all of those items mean.  If you see items listed that you cannot identify, just ask your operator or broker to explain it to you.  We love our industry and our product; so, we are more than happy to answer any questions you might have.

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Reporting from Sao Jose dos Campos, Brazil, Embraer Factory

I am visiting Embraer in Brazil for the acceptance and delivery of a Phenom 100, Embraer Executive Jet. 

Serial Number 146 is poised on the floor of Hangar 300 ready for delivery to an owner in the United Kingdom.  This EMB-500 will be managed by London Executive Aviation and will initially be based at Stansted Airport about 25 miles northeast of London City.  

Although JetQuik accepts and delivers aircraft for customers around the world, the acceptance of this Phenom was accomplished by Dan Pope, an engineer from LEA.

Joining me in the delivery process is Neil Onions, a thirty-year aviation veteran and Head of Training for LEA.  Neil cut his teeth as an air traffic control engineer initially working in the Shetland Islands, and subsequently all over the UK.  He now lives in the Essex countryside among the ancient oaks, but near enough to The Butcher’s Arms to enjoy an occasional pint of bitters.

Patrick Margetson-Rushmore and George Galanopoulos, principals of LEA operate over 20 aircraft in charter and the Phenom 100 will be the 8th type joining their fleet.   As President of JetQuik I have had the pleasure of joining Patrick for several meetings both in England and Spain, where we have advocated for Executive Jet travel and for improvements in the world-wide air charter community.   Although this is the first Phenom 100 to join the LEA fleet, I am confident that more will be forthcoming.

Also growing their fleet is Corporate Flight Management in Smyrna and Nashville, Tennessee, now managing two Embraer Phenom 100s with plans to continually expand the fleet of Embraer Executive Jets.  Allen Howell, Chairman of CFM notes that they are “marvelously efficient aircraft that fulfill the need for light jets in our (CFM’s) fleet”.   Allen Howell also noted that, “Corporate Flight Management  has completed factory approved training for Phenom mechanics who help to ensure the high dispatch reliability of the Phenom 100.”

Here in Sao Jose dos Campos, Brazil, the hangar 300 delivery facility is buzzing with activity. As I look out into the hangar from my delivery office, I see EMB 190s destined for Tianjin Airlines, TACA and jetBlue.  Out on Runway 15, an Air France by Regional EMB 170 just departed for Paris. 

The airliners in Hangar 300  are joined by six Phenom 100s and two Phenom 300s slated for delivery this week.  Much of the credit for the popularity of the Embraer Executive Jet family is due to the airline heritage that they share.  Built to airliner standards, the Phenom jets are rugged and dependable, fun to fly, and great to look at.   The latest Phenom 300 here in the hangar is a stellar example of clean sheet design and a perfect mix of beauty and practicality.

Tomorrow we begin our trip to London.  I hope that you will follow our progress as we “adventure our way” up through the Americas and over to Europe.

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When we started our flight school, Wings of Eagles, ten years ago, we were looking for a new trainer that would be efficient, safe and fun to fly. We wanted to do something different and reach a different market of people interested in learning to fly by offering new aircraft with the latest technology.

At that time, most flight schools were using 20-year-old Cessna 152s and 172s as their primary trainers. I learned to fly in those aircraft and there’s nothing wrong with learning to fly in a 20 year old trainer; but, it is not the most inspiring sight.  When you are thinking about learning to fly, you’re not looking for an aircraft that has a worn down paint job, a ratty interior, and radios from a different era of electronics.  You’re looking for an aircraft that looks like the future, which is why we chose the Da-20 Katana because it represented just that – the future. When the Da-40 Diamond Star came out we were in line and bought one of the first ones made – serial number 42.

Through the last ten years, these aircraft have proven to be great trainers: so, we have kept Diamond Da-20s and Da-40s in the mix, even  as we have upgraded the fleet.

Like all general aviation aircraft manufacturers, Diamond has had a rough ride in the past two years, but they have hung in there, and now it looks like they are on the verge of some new, innovative aircraft that will keep them in the future game of private and general aviation. 

A post on Flight Global this past week written by Flight International’s Kate Sarsfield of Flight International says that Diamond Aircraft has secured an investor to help them complete the certification of the D-jet.

This is great news for the industry. There is room between the high performance piston aircraft (Cirrus) and the new light jets (Embraer Phenom and Cessna Mustang) for a single engine jet primarily focused at the market of owner-flown aircraft buyers.  

At a price of 1.9 million, which is roughly half of the Phenom 100, and nearly 1 million less than the TBM850, this aircraft would be positioned well in the market to sell.

Kate Sarsfield also mentions other innovations and product offerings that Diamond is working on:

Dries (CEO of Diamond) admitted at the show that Diamond has been forced to diversify its product line and widen its target market to “survive the economic downturn.” A number of projects are in the works, including: 

• Designing wing spar boxes for the Russian MC-21 airliner, which is set for service entry in 2017.
• Building a Mercedes-based V-6 turbo diesel engine for the DA50 DiamondStar piston single
• Designing and building a “future small aircraft” powered by twin turbo diesels. The six-seat variant will have twin 270hp (200kW) engines, while the eight-seat model will have two 400hp engines. Both aircraft will have fly-by-wire controls, an automatic landing system for use in case of pilot incapacitation and be available in pressurised and unpressurised versions.

• Developing two new V-8 turbo diesels – one with 350hp and the other with 550hp.
• Developing a light aircraft driven by a hybrid combination of a 55hp Wankel rotary engine and a 40-50kW electrical motor. Dries said an aircraft will make its debut at next year’s show.

Meanwhile, Diamond has European approval for its 170hp AE300 Austro engine powered DA40 piston single – now called the DA40NG.

Much of what is mentioned has to do with diesel engine technology for aviation. The diesel technology will eventually catch on in a big way for two reasons:

1. The supply of aviation gasoline is limited in most parts of the world and will probably not get better, but here is always an available supply of jet fuel and eventually a bio jet fuel will be on the market.
2. The diesel engine is more economical and eventually will be more reliable.

 So, hats off to Diamond for being forward-thinking and innovative.

 I look forward to seeing the D-jet and diesel variants of the Da-40 and Da-42 Twin star flying here in the US.

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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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