Airport capacity is a hot topic at the moment in Europe. According to Eurocontrol, 44% of European flights depart from the continent’s top 25 airports, meaning that around 1,975 smaller airfields are massively underutilised and main hubs are becoming increasingly congested. A similar story is seen in the US where only 3% of its 10,000 airports are serviced by commercial airlines. Back in 2001, NASA decided to invest five years and $69 million (£44.5 million) into alleviating this issue, by developing an alternative to utilising mainstream routes and improving access to smaller communities. This initiative was originally known as the Small Aircraft Transportation System (SATS) and was designed to expand the market by stimulating untapped sectors and offering something new to previously unexposed audiences i.e. those who would not normally travel privately due to cost, time, convenience, access or awareness.

Over the years, the SATS has become more commonly referred to as the "air taxi" and has developed into a business model that has been adopted by a number of business jet operators both here in Europe and in the United States. There are of course a range of definitions but as a general rule an air taxi operator is described as offering a fleet of low-cost, new-generation aircraft. Each aircraft has an MTOW (Maximum Take-off Weight) of 8,618kg or less, with 9 or fewer passenger seats, and are used for transporting passengers or cargo. With a view to making what was once only a viable option for those whose time is worth the extra expense (e.g. top business executives) more accessible to the ‘masses’, the main principle behind the air taxi is to achieve low operating costs and high utilisation, where effective fleet optimisation culminates in reduced empty legs and lower prices.

Whilst there are a number of factors that help construct the concept, three specific trends seem to appear throughout the air taxi sector of private aviation: 1) operating a homogeneous fleet; 2) the use of Very Light Jets (VLJs); and 3) strategically positioning aircraft in "hubs" on popular routes. In order to achieve long-term success it is important for an air taxi operator to build critical mass by minimising inefficiencies and offering competitive (yet profitable) pricing. The advantages of operating a homogeneous fleet, from both a financial and operational point of view, are all about economies of scale derived from fleet commonality. Parts can be bought in bulk and if one aircraft goes tech, there’s an identical replacement; standardised staff training makes crews interchangeable; and operators establish greater fleet knowledge and experience in addition to having consistent costing across the board for all elements, from aircraft operation to airfield fees.

Utilisation of VLJs has increased greatly over the last 5 years. According to data from WINGX Advance – a business aviation intelligence provider – VLJ departure rates were up 26% in 2012 against 2008 figures and saw 3,031 departures in August 2013, representing a 15.7% increase on August 2012 numbers. Similarly, broker figures suggest that the number of bookings for Citation Mustangs has trebled over the last three years. Popular VLJs include the Cessna’s Citation Mustang, Embraer’s Phenom 100 and Eclipse 500/550. Such aircraft are well-suited to the air taxi business model since they are relatively small and light, not only reducing operational costs but also meaning they can access less frequently-used airfields that may be closer to a customer’s origin and destination. In Europe, in particular, the Citation Mustang seems to be a popular choice amongst air taxi operators with the likes of Blink, GlobeAir, Wijet and Suraviation (amongst others) chartering Mustangs almost exclusively.

Stratafleet beta tester Blink currently operates six Mustangs and is one of the few UK charter companies marketing themselves as an air taxi provider. Based out of London Blackbushe, they have hubs spread across Western Europe, making them well positioned to fulfil some of the most popular routes across the continent, with Paris to Geneva, Geneva to London, and Paris to London being their most frequently flown routes in 2012. Last year, only 32.2% of Blink’s 2,282 aircraft movements were empty legs; which is around 8% fewer than private aviation as a whole – certainly indicating that the air taxi business model is successful at reducing such inefficiencies. Despite encountering a few obstacles over the last six years, such as the omnipresent financial crisis and aircraft design not evolving to the degrees anticipated, Blink MD and Co-Founder Cameron Ogden remains positive. He firmly believes “the air taxi model is still very much alive in the European market… up to 2013 Blink has grown 20% year-on-year and this rate could easily be sustained with sensible fleet growth”. Mr Ogden sees the efficacy of this sector as being reliant on three factors: affordable prices, efficient aircraft, and a “central marketplace”. Prices are becoming more affordable with companies like Blink successfully competing with business class and reducing the cost of hiring a private aircraft by up to 50% at time vis-à-vis other private jet offerings. With that in mind and the fact that air-taxi aircraft (such as VLJs) are proving to be popular amongst operators and passengers, all that remains is the creation of a centralised platform.

Whilst it is clear that the air taxi sector is progressing, the introduction of advanced technology and a centralised marketplace would be likely to further enhance what it has to offer. With the necessary technology and instant access to precise airport and airways charges, as well as greater knowledge of aircraft locations and costing, the potential for further optimising aircraft utilisation is endless. Stratajet's approach to this task has a lot in common with the air taxi business concept, with our main goal being to match customer requirements with aircraft based on availability and location. This helps to reduce the number of empty legs and in turn lowers operating costs and increases profit margins. Similarly, with accurate knowledge of aircraft/airport compatibility, smaller under-utilised airfields could be used, leading to reduced congestion at larger airports, lower cost to the end user and less time overall spent in transit between a customer’s start and end locations.

The basic principles behind the air taxi model are to increase productivity and reduce inefficiency providing a welcome boost to the bottom line and market size. The methods used to achieve these goals, such as fleet homogeneity and using smaller, lighter aircraft, may be hard to replicate throughout the industry, but must be something that private aviation as a whole strives towards. We strongly believe that it is something that can be achieved through the implementation and adoption of an online end-user aggregate platform. Watch this space.

Christina Hayes
Marketing Assistant