Last month we talked about the power of chaos and one piece flow in Italian traffic. By not having (or obeying) traffic signals, Italian traffic moves slower… but continually… thereby having more more total flow. It turns out that this concept has spawned a new theory in traffic design, and some predominantly European municipalities are now actively removing traffic signals and even sidewalks… to improve flow.
What would happen if we took that same concept, put it up in the air where there are few physical boundaries, and ramped up the speed to around 600mph? When I think of it in terms of my experience with Italian traffic it scares the crap out of me. But from an efficiency and lean perspective… this could be interesting.
We have all experienced the pain of the hub-and-spoke arrangement of the major airlines. To get anywhere from my small town on the central coast of California I have to take a puddle-jumper to either LA or San Francisco, and then usually hit yet another hub like Chicago before finally getting to my final destination. The worst situation is when I have to get to another small town in California… I’m usually faced with either a 6-8 hour drive or about 5+ hours of transit time by air… most of which is sitting in airport lounges waiting for connecting puddle-jumpers.
The FAA is expected to approve the first of a new breed of planes known as "very light jets" (VLJs) later this summer, with the first out being the Eclipse 500 by Eclipse Aviation in Albuquerque, New Mexico. These three-passenger jets are cheaper to operate and more efficient than any commercial aircraft now in the skies… so much for "economies of scale".
At least three companies are lining up to take advantage of this opportunity. LinearAir already offers traditional charter services in the northeast, and has committed to purchase several E500’s. Two startups, DayJet in the southeast and Pogo in the northeast, are set to begin operations over the next couple years. Pogo has some experienced muscle behind it… co-founded by Don Burr, the former CEO of People’s Express, and currently run by former American Airlines CEO Robert Crandall.
The business model is roughly the same for all three companies… short (<500 mile) trips and short lead times. Private jet travel used to be the domain of corporate execs and movie stars who could justify the cost based on lost productive time resulting from multi-legged commercial travel, plus some improved security. But with the new super-efficient minijets, that time value approaches real-world proportions. Actual airfare is roughly that of a full-fare coach ticket… which is what most short-notice business travelers end up paying anyway. And contrary to the current charter business, prices are per-passenger and not per-plane.
There is obviously a complexity factor when trying to coordinate a larger number of small planes, while maximizing efficiency and load. DayJet’s system will let passengers request a seat as little as four hours in advance. Computers will constantly monitor requests to determine demand for given routes. Passengers with flexible schedules will be given discounted rates, as they can help fill planes on short notice.
Just as old batch-based economy-of-scale companies like GM are barely holding on to small long-haul niches such as buses, but losing the cars of the masses to lean companies like Toyota, which large commercial carriers will be able to successfully change their business model? Or will we see the evolution of a completely new system where traditional carriers supply the long-haul segments between major airports, and the new startups use VLJ’s to create a much more efficient web of short-range traffic?
General Aero, a business travel consulting firm, estimates that there will be over 4,000 VLJ’s flying in the U.S. alone by 2016. After thinking back to my experience with Italian traffic, I may decide to just take the train.