Oxyfish

I’m at Flight School, and blogging some notes. The marginal utility of turning this in to readable prose is not very high to me, so for what it’s worth, here are the raw notes, in the extended entry.

Andrew Steinberg, General Counsel to the FAA:
New equation: VLJ + advanced avionics + 5000 airports + the Web + $$$ = Disruptive Tech?
Important questions: How do we guarantee your safety? Who�s responsible for your travel?  Will you get there on time?
Promise: service to small communities, pt to pt business travel, relief for congestion at major airports
Models: shared ownership (fractional), air taxi, distributed services
Safety paradigm: more robust regulation as moving from:
Personal, non-commercial, piston power, GA airports  for hire, complex jets, major hubs
VLJ breaks rules: single pilot ops, not cert as transport jets, complex tech, but current rules: cannot carry passengers in sched service
Mult and joint ownership all fit under part 91, fractional too, now even subleasing
Question: treating fractionals more like scheduled air carriers?
Airports ready? Safety requirements for commercial air carriers, environmental concerns, enhanced security post 9-11
Responsibility: must have commercial operating certificate, also a common carrier cert from DOT (lots of rules)
Could imagine ebay/craigslist for private jet travel, but current regulatory environ would prohibit this
Only the cert holder can operate a flight � operational control is key, FAA determines who is in charge � serious stuff
Efficiency paradigm bedrock values: allow carriers and private aviators to go to/from any airport on any sched; all aircraft treated equally by air traffic, first come first served; ATC free of charge; build capacity through pavement, tech, and airspace redesign
Traffic growing quickly, and light jets could be a big percentage
Demand management: (carpool lane?); slot control airports (La Guardia expiring, O�Hare dropped, and reinstated); do you have a reservation? How many pax? Congestion pricing, and capacity auctions�
Snow birds at Ft Lauderdale � winter weekend traffic from northeast delaying scheduled traffic
Funding: financing the modernization of the airspace system; revenue system based on ticket prices; each new regional and light jet means less revenue per op for the Trust Fund; pits airline industry against general aviation
Not now calling for user fees, but will be challenged to find the right revenue model
He believes tech should drive regulation, not the reverse

Pogo
Don Burr
Will have own jets
He was at People Express, came out of deregulation in 1978
Same model reinvented in private transport format
High productivity to drive efficiency
Believe they can produce a seat-mile for $1 (with 4 on the plane) and sell it for $2.
Real heavy lifting is on tech side, engines and aircraft
They just have to find ways to produce it and distribute it seamlessly
Who is the market? Believes he stimulates a new market, won�t steal traffic from commercial or even NetJets, but will take traffic from cars
Peak price will be $6 per mile, even at peak demand times, and will be less than $6 most of the time
Starting in the Northeast, possibly as soon as the fall of next year � bottleneck is certification of the planes
Have received major financing for the purchasing of these aircraft, for the majority portion of their first 50 planes

Jetson Systems
Ed Iacobucci
Have built a team of operations, programmers, researchers, demographers to build a model of how convenient air travel could work
Long tail is a huge market, but poor for sched ops
Working on some models to be able to do this efficiently, on-demand, within part 135, and profitably
Profit depends on ability to aggregate demand, on demand, and be able to schedule backhauls
His pricing may vary according to time available, but insists that price should be the same for each person who gets the same flight, and price shouldn�t change depending on how early you book, more depends on the time window you have available

Corporate Clipper
Gavin Stener
Business was driven by the auto driver
Move the smart people smarter
Lawyers, consultants, high value people, travel plans typically 2-3 days in advance
Target corporate travel depts.
Have to be able to arbitrage, and manage demand
Commercial transport: $150b, GA is $5-6b
Segment $150b into refundable tickets Y-class people, get $30b, that�s their market
72% of high-end travel is driven by AmEx and other channels � can�t just do Orbitz
They are not an operator, they do the arbitrage, drive the traffic, do the customer service
Should be a cost plus model, consistent for everybody (nobody sits next to somebody that paid $300 less)

Katherine Perfetti, FAA
Have seen changes like this before: commuter aircraft and code-sharing, fractional aircraft ownership
Facing some similar challenges with VLJ
Are not totally reacting � have been involved from the beginning
Now the challenge is how to integrate business models with the new tech
Part 135 was written in 1978, mix of aircraft has changed substantially since then
One tool: ARC Aviation Rules Committee, get recommendations from industry
Should VLJs be operated by single pilot when commercial?
DOT has issues too, currently enforcing against some aggregators
Right now the rules don�t prohibit these new business models, but probably still need some adjustments

Bruce Holmes, NASA Langley
Likes a mental model related to the ISO stack
Provides a model that has scalability, aids in thinking about the system
Physical: airports
Transport: aircraft
Operations: ??
Applications
What does scalability look like? Non-scheduled, distributed
Delivered plan for nextgen air system to Congress in Dec 2004
Had 5 scenarios to plan for
June 5-7 Danville VA, full demo of SATS system, whole system is in the vehicle
New aircraft in this market are ready-made for this capability

Both Ed and Don believe that the operator must own jets, both for business and regulatory environment � pushing back on Gavin
Gavin responds that he has some biometric authentication and other IP, relationships with corp travel managers
Moving to a variable cost market, they have operators lined up who want someone to manage the front end, willing to capitalize the aircraft and fly them, but don�t have the channel

This entry was posted on Wednesday, March 23rd, 2005 at 9:22 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.