Fly Me to the Moon, or At Least Milwaukee: Is There a Future in Air-Taxis?
While not an automotive manufacturer of the four-wheeled cupholder-equipped variety, Eclipse Aviation nevertheless plans to make big waves with tiny, cheap jetliners. A member of a class known as Very Light Jets, the Eclipse 500 is a six-passenger plane that can travel 430mph, is 33 feet long, and weighs less than half of a Suburban. The cost? $1.5 million, a lot less than the larger $2.5 million Cessna jet or a $6 million Learjet.
Vern Raburn’s company hopes to differentiate itself on more than price. They are adopting a multi-sourced assemble-to-order approach, similar to the wildly profitable model that PC manufacturers use. Most of the parts are built in offshore factories where the labor cost is a fraction of what it would be in the US. Once the pieces arrive in Eclipse’s factory in Albuquerque, they’re assembled using a technology called ‘friction-stir welding’ – eliminating 60% of the rivets and 1,800 hours of labor. Eclipse is shooting for an unheard-of turnaround time: ten days from the onset of final assembly to delivery.
It’s a big gamble, to be sure. By farming out construction of large chunks of the aircraft, cost drops significantly but the long supply chain greatly increases the risk. PC manufacturers felt the pinch in 1999 when an earthquake in Taiwan disrupted supplies of memory and component circuit boards. When businesses are keeping at most a week’s worth of inventory at any given time, a hiccup can be disastrous.
That gamble could pay off. With a maximum flying time of three hours, the jet can travel halfway from New York to Sacramento or Ottawa to Victoria. Its small size enables it to use much smaller airfields than an Airbus or 747 – airfields that are in cities normally inaccessible to traditional air travel. In travel-heavy fields such as consulting, the cost, wasted time, and annoyance of getting to the remote headquarters of space-intensive companies like manufacturers is astronomical. Employees often have to fly to a large airport, rent a car, and drive for hundreds of miles on a Monday – then turn around and do it again on Thursday to go home, for months on end. To make matters worse, infrequently-used flight corridors often have half-empty planes, which cost the airlines just as much to run as full ones. If, on the other hand, an air-taxi company like DayJet can drop the employees off twenty miles from their destination instead of two hundred, the increased ticket price is more than paid for with regained employee time and reduced car rental and driving expenses. Not that the ticket prices are always higher with air-taxi companies: DayJet estimates that they would be profitable charging customers between $1 and $3 a mile, not far from what a major airline would charge to travel to a small airport. Moreover, the required skill to pilot the planes is far less than a traditional aircraft: much of it is handled via a touchscreen and game console-style controller. One pilot is all that’s necessary.
Some business travelers like the champagne, fancy meals, and other pampering that comes with flying business class on a major airline. Many more, however, simply want to get from point A to point B with a minimum of fuss and wasted time. DayJet and other air-taxi companies think that they can provide that with Eclipse’s jets – the owner of DayJet even stated that their main competition is not jumbo jets, but automobiles. Just one catch – the Eclipse 500 has no bathroom onboard. Travelers had better go before they leave the house.
More information from the Wall Street Journal (subscription required):
http://online.wsj.com/article/SB114687652644345618.html?mod=hpp_us_pageone