Plane Conversations

Few people take into account the social value of air transportation.  There are very few studies that can measure the impact on a community when they are immobilized due to lack of a service that had previously been available. There is no true economic category to describe such loss except as a tax on travel.

A regressive tax is taxation that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder. Social Flights can restore this value with a regionalized public jet charter system.

Now we can add “Travel” to the list

Sales taxes that apply to essentials are generally considered to be regressive as well because expenses for food, clothing and shelter tend to make up a higher percentage of a lower income consumer’s overall budget. In this case, even though the tax may be uniform (such as 7% sales tax), lower income consumers are more affected by it because they are less able to afford it.

<via American Eagle to park planes, reduce service – Dallas Business Journal>

The small city gets the regressive travel tax

American Eagle announced that they would reduce frequency in a few select markets, they would discontinued seasonal service from D/FW to Augusta, Ga. Eagle would also discontinued service from Chicago to Tri-Cities, Tenn as well as discontinued service between Miami and Savanna, Ga., and Miami and Fort Myers, Florida.  American Eagle would also hasten the cancellation of Los Angeles-Boise, Chicago-Calgary and D/FW-Fayetteville, N.C., service from Feb. 9 to Jan. 31.

So how many people would these reduction in service decisions impact? If we just add up the populations of the smaller metropolitan area in each city pair, we can estimate economic loss of opportunity under the assumption that the larger city would have alternate options. Fair enough?

Augusta, GA: 556,877

Tri Cities, TN:  500,538

Savanna, GA: 347,611

Ft Meyers, Fl: 618,754

Boise, Id: 616,500

Calgary: 1,230,248

Fayetteville, NC:  366,383

The Creeping Costs

The total is at least 4 million who will lose one more degree of economic freedom.  4 million people will pay a regressive tax denominated in time, money, and dignity in some form or another for the benefit of stockholders in American Eagle. 4 million people will lose the economic benefit of travelers from large cities.

On closer inspection, with the exception of Calgary and Boise, all of these cities are well within 1000 miles of each other.  Each of these cities is well within 1000 miles of cities just as large as those that American Eagle is diminishing service.

While a hub and spoke model may break down economically, a regionalization strategy may work quite well.  It has been proven that people are willing to pay a premium for direct service (otherwise the airlines would not be dropping less profitable indirect service).  It is also obvious that people place a premium on their time and hassle as demonstrated by trends in online shopping, communication, and social organization.

These ingredients simple add up to a regionalization air transportation route structure enabled by online social organization tools such as Social Flights where community airlines can form around community priorities.  Social Flights can restore this value with a regionalized public jet charter system.

An industry in crisis is an industry ripe for transformation.

America’s air travel system is in crisis. In response to rising fuel prices, air-space congestion and industry losses during the recession, airlines have cut capacity and raised rates. These challenges follow on the heels of delays and hassles that have cost the nation almost $33 billion in the past year alone, according to a recent study commissioned by the FAA / DOT.

Some blame the problems on government regulations over airlines and the lack of modernized air traffic control infrastucture. Others see the problem as dysfunctional management of the airline system.

Could it be that “the system of air travel” is being re-engineered before our eyes and all the current problems are part of the process?

I remember when airline travel used to be a social experience. Today it is anything but social, with the majority of passengers frustrated by the experience and loss of productivity.  Yet air travel is necessary for both leisure and business purposes.

How big is air travel and its impact on the economy here in the US?

Research from the US Travel Association says:

1. About 42 percent of U.S. adults reported traveling by air for leisure trips.  The percentage of air travelers increases to 48 percent among U.S. adults who traveled for business purposes in the past year.
2. A study by the U.S. Travel Association revealed a deep frustration among air travelers that caused them to avoid an estimated 41 million trips over the past 12 months at a cost of more than $26 billion to the U.S. economy.
3. Business travel in the U.S. is responsible for $246 billion in spending and 2.3 million American jobs; $100 billion of this spending and 1 million American jobs are linked directly to meetings and events. For every dollar invested in business travel, businesses experience an average $12.50 in increased revenue and $3.80 in new profits.
4. The Internet was used by approximately 90 million American adults to plan travel during the past year with 76 percent of online travelers planning leisure trips online.

The Social Market of Travel Is Hot Every other day or two, you hear about a new travel app, a travel related company, or a mega travel player partnering, acquiring, or developing the next industry killer app. Consider some of the recent developments in the travel space over the last year:

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As I said yesterday, both the Phenom 100 and the 300 are single pilot certified and are designed to be flown by professional pilots, as well as owner pilots. The latter present a challenge as they are generally a group with little or no pure turbojet time.  Many have flown complex turbo prop aircraft but most owner pilots have spent little time in “fast movers” and lack a complete understanding of their roles and responsibilities in the ATC system. The solution lies in training and competent mentoring.  Embraer includes two “entitlement” training slots for pilots with the purchase of an Executive Jet. The training at ECTS is a thorough introduction into the Phenom and an accurate assessment of acquired skills and knowledge.   The problem is that training ends with the check-ride and subsequent type rating.   And, in any sphere, knowledge without wisdom is incomplete.

A typical type-rating oral exam consists of knowing aircraft systems and limitations along with the immediate action items associated with specific emergency procedures.  A more thorough oral drills deeper with questions involving the working relationships of systems and an understanding of why things work the way they do. The rating-ride is a carefully choreographed series of events that test specific learned procedures such as the loss of an engine on takeoff, the“V-1 Cut”, as well as single-engine approaches and landings.  The entire check ride is given within the confines of a single airport and is an accurate assessment of skills and accomplishment. The FAA oral and rating-ride are excellent tests of pilot preparedness for the unexpected problems that seldom (thankfully) occur in real life.  What a rating-ride can’t do is impart experience and judgment to a first-time jet pilot.  With experience comes wisdom and the safest way for the first-time jet pilot to get that wisdom is with the assistance of a mentor.

Slow down, you move too fast.
You got to make the morning last.
Just kicking down the cobble stones.
Looking for fun and feelin’ groovy.

 (59th St. Bridge Song by Simon and Garfunkel)

Up until recently, Air Traffic Controllers could logically assume that everyone in a jet “kicking down the cobble stones” was a pro-pilot or at least performed like one.  The advent of the personal jet has changed that.  Now anyone with a million dollars, or even less with financing, can buy a jet to look for fun and feel groovy hanging out with the big boys.  Herein lies the problem. The old instructor adage of “slow down and make yourself time for the approach” only works at the cabbage patch, but these personal jet aircraft aren’t staying in the cabbage patch.

A gap has developed between those who understand ATC and fly accordingly and those who feel as if ATC will accommodate their lack of skills and judgment. The saner parties have been the insurance companies who have insisted upon some level of supervision for low time aviators. Insurance companies, at a loss for how gauge skills and judgment, have resorted to insisting on a certain number of hours (usually 25) of supervised flying.  Typically those hours are flown in the course of business for the newly minted personal jet aviator.

Perhaps a better way to ensure the safety and success of the owner-flown community would be to adopt the commercial aviation technique of mentor flying for newly type-rated jet pilots by creating a private IOE (initial operating experience) process. Airlines have long recognized that meaningful mentor programs consist of more than the supervised “drilling of holes” in the sky.  A truly effective mentor program imparts a higher level understanding and competence to the new pilot.

With training fresh in the mind of the newly typed pilot, the mentor reinforces good technique and emphasizes the “real world” application the newly learned skills.  And it takes both training and experience to protect your Phenom investment.

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