The Empty Leg Syndrome

[tuna hp]

The Empty-Leg Syndrome

Interesting aviation week article on trends in the biz jet industry.

its a decently long article, but the bottom line is that new charter models including floating fleets and one-way pricing seem to be much more efficient than the current dominant models of managed charter planes and fractional.

The article profiles a couple companies who claim success with the model of owning their own jets and completely floating their fleet. Where the plane lands, it stays, until it makes sense for them to pick up another mission. They sell a precise combination of guaranteed hours, roundtrip charter, and one way charter. Supposedly they have been able to cut deadhead down to the lowest levels yet. XOjet claims only 3% nonrevenue legs.

It would be interesting to see if this model catches on and begins to control the market. How would you pilots feel about being about being floated constantly? If the model could increase utilization to 1500+ hours a year, that could drastically reduce prices and help grow the business.

[NZ X man]

empty leg syndrome.

Tuna
If I was waiting in a nice location, it would be great, no complaints, if I was waiting in a dung heap of a location, then I, as a pilot, would be singing the blues. Nice hotel, per diem, counting my days, OK. Crap location, counting my days, until I leave.

[Johnny Redd]

2 weeks on 2 weeks off, that would suit me and take the sting out of always being expected to be on standby - how it is right now

Surely a floating fleet is just an amalgamation of how ad-hoc charter and fractional work.......

[merlinxx]

Tuna, just like your handle, cast the net wide enough, and those cannot see, will be caught You want your folks to fly/work for a Big Mac

[tuna hp]

Originally Posted by Johnny Redd

Surely a floating fleet is just an amalgamation of how ad-hoc charter and fractional work.......

Yeah. Netjets already floats their fleet. The idea is that netjets sells way too much guaranteed availability per plane (in terms of users and hours) but not as much total revenue flying as they could accumulate per plane. So they have way too much deadhead and charter outsoucing needs, and don't reduce fixed costs as muchas they could.

Since reading the article I've been trying to read up on XOjet and they really do seem to have an interesting model. They are betting that they can significantly reduce the deadhead experienced by the managed charters by owning their own planes. They can also have much less deadhead than Netjets because they're going to price their products efficiently: lower prices for flights to and from popular airports (where they are most likely to be able to pick up another flight without having to reposition). Reduced prices for longer flights (lower proportion of positioning to revenue flight time). Reserving most guaranteed availbility to users who are going to provide them with consistant business throughout the year, not just during peak periods. Selling their excess of peak capacity at a premium. Etc.

The are focusing on the Citation X and Challenger 300 because they want to focus on transcontinental flights where positioning will be a lower proportion of total flight, so they believe that the transcontinental market is where they will have the largest competetive advantage versus managed charter and fractional.

So far they have supposedly averaged 1200 hours/yr per plane with some months where they have gotten up to 1500 hours annualized.

Here's my question to those in the business:

Using the XO jet model or something like it, is it so inconcievable that when the market firms up, they might be able to get 2 transcontinental flights per plane per day? 3000+ hours of utilization per year?

Being able to dillute the fixed costs per hour so much would be huge for the business jet industry. My understanding is that capital expenses and depreciation together already account for the majority of the total cost of flying business jets, and there are other significant fixed costs that could also be dilluted.

[Chicken Leg]

NZ X Man,
I too read this article with interest. The impression I got was that while the aircraft was 'waiting' at the non fixed location, the crew were re-deployed. I guess it makes sense - using your example, flying a crew back on commercial airlines from say, Nice, would be a fraction of the cost of repositioning the frame on a deadleg. Even if the crew then flew back to Nice a couple of days later, it would offer a considerable saving over deadlegging.

[Trim Stab]

I too read this article with interest. The impression I got was that while the aircraft was 'waiting' at the non fixed location, the crew were re-deployed. I guess it makes sense - using your example, flying a crew back on commercial airlines from say, Nice, would be a fraction of the cost of repositioning the frame on a deadleg. Even if the crew then flew back to Nice a couple of days later, it would offer a considerable saving over deadlegging.

The operators don't evaluate the aircrew's wellbeing against the cost of repositioning the airframe - they evaluate it against the cost of keeping the aircrew in a rubbish hotel until the airframe is redeployed. So they'll only pay for you to go home if it is cheaper than holding you in a hotel. Not too bad if you are in Nice - but try an indefinite stopover in (say) Lahr and you will get an idea of how poor the deal is for the aircrew.

[Martin Barnes]

are you serious !!!!

Im guessing you dont have a job right now

[Chicken Leg]

Trim Stab
I don't doubt that the decision to bring crews home is a financial one, but I don't agree with your post. To get a crew home from (say) Lahr nowadays is buttons. To keep a crew in a hotel on expenses etc would mean that a 'hold' of only a couple of days would mean it's likely to be cheaper to bring them home. Anyway, is a couple of days in a cheap hotel really that bad if you're getting paid to do it? As long as it's clean....... Take your trainers and a pair of shorts and Bob's your Father's brother!