The Next BIG Thing....

Aviation Week the well-known industry journal is celebrating its centennial year and as part of that process they have been focussing on notable aviation events during the last 100 years, whilst also asking various industry personalities and visionaries about their predictions for the next 100 years of aviation. There has been some interesting stuff, well worth reading and thoroughly recommended.

One article in particular caught my attention, focussing on business aviation. The article cites the development of pressurised turbine aircraft, the ubiquitous Learjet, NetJets and the development of 'Jet Cards' as key moments but poses the question, what comes next? Supersonic, Uber style disruption or something else?

So what is the next big thing? I actually think the answer is already here but we haven't as an industry quite joined up the dots yet.

First look at the current environment that business aviation operates in; post 2008 global recession, a slow economic recovery inevitably tainted by the 'fat cat' image of business aviation. An industry struggling to find new customers with manufacturers wrestling the issue of developing expensive new aircraft technologies whilst having to churn a customer base that isn't growing significantly.

Then consider the competition; the airlines. What is it that frustrates business travellers most about airlines today?

The actual bit on the plane is probably at the bottom of their list of gripes or concerns and also represents a very small proportion of the overall journey. Think instead about the time spent in traffic getting to the airport, then the wait, followed by some more waiting, the boarding queue, followed by a hold on the ground and the ATC stack before landing.

Start assigning costs to that journey (ground transport, parking, hotel accommodation, expenses etc.) and then consider the value of time and productivity to an employer and the picture becomes more depressing.

Also understand that business travel is no longer confined to the C-Suite and Senior Managers. Technology now facilitates small businesses working globally where 35-years ago they would normally have been limited to working within a fairly limited radius of their location. A modern small business using the latest technology can comfortably trade around the world with less than a few dozen employees, in that context then everybody is a key person when it comes to productivity and profit margins.

By the same token the power of presence has never been more important when you consider the distances that often now separate a business from its remote clients, sometimes you just need to be there face-to-face.

In the meantime, airline economics largely tied to hub and spoke travel patterns are actually hindering business travel further. Route networks are shrinking, frequency decreasing, passenger choice and flexibility being eroded further whilst real costs to the consumer are actually increasing.

There are around 3000 airports in the EU capable of operating turboprop or jet type aircraft but only around 300 of them are served by scheduled air services. Surely the opportunity for business aviation is obvious? Yes?!

The introduction of Open Skies 30-years gave the opportunity for new upstart low cost carriers to become established. The likes of Ryanair and EasyJet were ready for the challenge and are now arguably some of the most powerful airlines in the world. What they did was create new customers by making low cost leisure travel easily accessible to the mass market. A weekend away on the continent was suddenly an economically justifiable prospect for almost all of us!

What the low cost carriers have not been able to do is to deliver the sort of benefits seen in personal leisure travel to business. Frequency of schedule is often the biggest issue, where a couple of meetings can become a 3 or 4-day stay to accommodate the low cost airline schedule. What you might save on the ￡39 (don't forget the tax!) low cost airline ticket you easily exceed on increased hotel costs and employee expenses.

So for me, next BIG thing is....

....Light jets, operating on demand, low cost, point-to-point air taxi services. Let's take passengers where they want to go and not where the airlines want to take them.

The level of technological development in the latest generations of light jets affords us the perfect opportunity to develop 'real' low cost operations. We need to be devoting ourselves to the low cost airline operating doctrine rather than considering this sector of the industry as a luxury or exclusive service.

Ruthless discipline and focus on operating costs; with business travellers enjoying the benefits of point-to-point travel, massive reductions in valuable, wasted and unproductive time. Reduced hotel costs; there and back in a day a reality when you don't have to contend with the airline schedule and the drive to and from the hub airport.

All of this at a price point which is genuinely comparable to a flexible business class fare at the airline hub but without the additional ancillary costs attached to the travel process.

Industry scepticism towards air taxi’s still dominates but, change the model, create new customers by focussing on the need. Fill the business aviation pipeline at the bottom to generate industry growth as a whole. The air taxi customer of today is the G650 owner of the future (other types of long-range luxury aircraft are available :)), in other words our industry wins in the long-term.

Like Ryanair, Southwest and EasyJet before them creating a new type of traveller. Low cost, point-to-point, on demand or to put it another way….

Project Kestrel - convenience, flexibility and value

The New Business Class.