Travelling Light

Blink, one such UK-based operator claims to offer “the efficiency and convenience of private air travel at a price that is competitive with commercial business-class fares”. Blink promises no lengthy check-in procedures, security queues and baggage reclaim dead time and compares arriving at a Blink airport 10 minutes before the flight takes off with hailing a cab at a taxi rank.

Although some observers are skeptical, this business model would have never even taxied onto the runway without Vern Raburn, a charismatic former software designer who 11 years ago announced that, on account of revolutions in manufacturing techniques, engine technologies and avionics, he could build a smaller, easier-to-fly, twin-engined jet, priced at $1m (€630,000). The world could hardly fail to pay attention.

But there is no industry tougher on newcomers than aviation, and even today with 2,500 orders for Eclipse Aviation’s iconic Eclipse 500 ‘very light jet’, (jets with a takeoff weight of less than 4,500kg, capable of single-pilot operation and with sophisticated, integrated instrumentation and navigation systems) it is too early to call Eclipse’s long-term success, let alone that of the taxi model.

Cessna’s Citation Mustang was the first in the very light jet (VLJ) class to win certification from US regulators, in September 2006 – although the Kansas-based company refers to it not as a VLJ but as an entry-level business jet. At €1.6m, the six-seat Mustang – two seats in the cockpit and four in the cabin – is far cheaper than its next brother up, the €3m Citation CJ1+.

Comparing the Eclipse and the Cessna is David Savile, chief executive of the world’s largest charter broker, Air Partner. “The Eclipse has just three seats and that limits its attractiveness compared to the larger Mustang,” he says, adding that he dislikes the ‘taxi’ comparison as having more to do with marketing than reality. Yet on the subject of the economic outlook for the whole private aviation sector, Savile is bullish. “It’s crazy,” he observes. “The world’s in recession but everyone’s flying private jets.” Air Partner’s half-year results for the period ending 31 January, showed a 20% increase in new clients and record profits.

“If these new, lighter jets bring down the entry price for private aviation then private aviation will grow as a result,” says Savile. It’s simply a case of which jet emerges as the favourite and which operating model. In-flight, there will certainly be bankruptcies, such as Adam Aircraft, the Colorado-based maker of the A700 VLJ that collapsed with unpaid debts of €32.4m in February. Eclipse has also been hit by numerous delays, and even now the New Mexico company is resolving some of the bugs in its sophisticated avionics and other systems, limiting the use of the 155 aircraft already flying.

Eclipse received a shot in the arm recently when investor European Technology and Investment Research Center (ETIRC) put in more than €65m, with ETIRC founder Roel Pieper taking a 51% stake and becoming non-executive chairman. This also gave ETIRC the rights to assemble the Eclipse 500 in its territory – Europe, Turkey, and Russia. In February, an assembly plant was announced for Ulyanovsk, next to Russia’s biggest and most underutilised aircraft factory.

Meanwhile, Adam Aircraft, founded by former Goldman Sachs banker George “Rick” Adam in 1998, is now under the management of Industrial Investors, a Moscow-based private equity player which paid €6.5m for the company in April.

Russian-assembled Eclipse 500s, which are scheduled to start flying out of the plant next year, could help meet a fast-growing demand for business jets in the former Soviet Union. They will also help redress a drastic transatlantic imbalance. Among VLJ manufacturers, Europe’s side is held up only by Austria-based Diamond Aircraft – and its small, single-engine aircraft is being made in Canada. Deliveries of Diamond’s five-seat, €870,000 D-Jet should start next year, beating Piper, and Cirrus single-engine aircraft, dubbed personal jets, to the market.

Mustangs – of which more than 500 have been ordered and more than 60 delivered – and Eclipses are currently the only VLJs that buyers can get their hands on; but customers have to be patient. “If you order one now, you can expect delivery in the second half of 2010,” says Raburn. “Our order book worldwide is about 2,600 aircraft – worth more than $4bn [€2.5m].”

The other high-flier in the field is long-established Brazilian aircraft maker Embraer, whose Phenom 100 had its first flight last July. First deliveries of the €1.8m jet are expected later this year.

The relatively low cost of joining the jet set certainly marks out these aircraft as heralding a new era in aviation, but it is in their use that the real revolution lays. As cheap to buy and operate as some turboprops, VLJs stand to benefit hugely from high fuel prices. Even greater, however, is the demand for alternatives to large, generally inefficient airports that have come to define Europe’s ‘hub and spoke’ system. Take the recent, admittedly extreme example of Heathrow’s disastrous Terminal 5 opening in London, or the longer-term pressure of anti-terrorist security measures. “It all boils down to preciousness of time,” says Savile. “There is only one alternative to the Heathrow scenario: private aviation.” Although Savile remains bullish about all types of private jet, VLJs will have a sizeable advantage; they will able to utilise the hundreds of tiny air strips denied to the bigger aircraft.

As usual in aviation, the US is leading the way. Boca Raton, Florida-based DayJet, an air-taxi fleet founded by Ed Iacobucci, aims to have 100 Eclipse 500s in the skies by the year-end in five southern states. Although the first revenue flight was only last October, Iacobucci says interest is high from those who want to pay for a seat, not a whole plane, and want to travel up to 1,000km.

DayJet has two pilots on board, despite the Eclipse being certified for single-pilot operation, for fare-payers’ peace of mind. It also takes no more than three passengers, to maximise comfort and fuel, which means greater range for a small aircraft.

Blink, is offering a limo-style service as opposed to DayJet’s shared taxis, renting out the whole aircraft rather than single seats.

“We are able to offer a boardroom in the sky,” says Peter Leiman, co-founder and managing director of Blink. “It’s a functional environment. Our passengers will be able to use the time really productively.”

Blink, which has partnered with UK-based TAG Aviation, offers companies rates that, on a per-seat basis, are within plus or minus 25% of the price of scheduled business-class tickets in Europe. Last year it raised €18.9m to fund its initial aircraft, and has recently taken delivery of its first Mustang – with at least another 45 on order. Leiman says the Cessna’s capacity for steep approaches and short landing distance will enable it to get into airports some rivals cannot use, such as London City and Cannes.

It is also fuel-efficient, says Leiman: “From London to Montpellier, say, the Mustang will burn less fuel than a Boeing 747 does taxiing from Heathrow’s Terminal 4 to the runway.”

Other companies are also circling. Dublin-based JetBird, for example, intends to buy up to 100 Phenom 100s and its larger light jet sibling, the €4.2m Phenom 300, offering them on a whole-plane basis. Like Blink, it aims to distribute them around a network of European hubs to minimise empty flights.

Rotterdam-based Bikkair is also vying for the title of the Continent’s first air-taxi operation. There are many others, too; Raburn says Eclipse alone has a “couple of hundred” orders from air-taxi operators in Europe.

All operators will have to be careful in balancing payload, fuel load and range – as DayJet is finding out. But such calculations are the constant companion of aviation.

As the number of VLJs arriving in Europe grows, the shift in transportation underway in the US could start to have an effect here. “In many ways,” says Raburn, “Europe is with VLJs where the US was two years ago.”

Blink’s Leiman is unsurprisingly bullish: “This is the next frontier. This is the forefront of the revolution.” Only time and market economics will show if he’s right.