Air taxi business grows up

Nascent field of cheaper air taxi services gets a bit more mature with the launch of the standards-setting Air Taxi Association.

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
Declan McCullagh
2 min read
ASPEN, Colo.--The air taxi business has just grown up a little more.

The youthful companies that provide flight-on-demand services announced Thursday that they have formed their own trade association. Companies running such flights expect to benefit from people defecting from commercial aviation's long lines, irksome security checkpoints and seemingly inexplicable delays, according to the group.

Their timing couldn't have been better: just a day earlier, United Airlines experienced a massive computer system failure that grounded or delayed hundreds of flights.

The Air Taxi Association, announced at Esther Dyson's Flight School conference here, is based in Atlanta, instead of the traditional trade association home of Washington, D.C.

"We are not a lobbying organization," Joe Leader, the association's president, said on Thursday. "We are not focused on governmental issues."

Rather, it's intended to be a standards-setting body, as well as to act as a liaison with airports interested in attracting air taxi services.

Air taxi operations are hardly new: charter operators have flown wealthy clients and businessmen in Learjets for decades. But the advent of smaller, less expensive jets, coupled with the ability to make Internet reservations as well as technology-spurred advances in dispatching, have led to a wealth of start-ups that are hoping to make air taxi services more mainstream.

XOJet says it has raised $200 million from investors so far and has 300 customers. It flies speedy Mach .92-capable Citation X jets and offers coast-to-coast flights for up to eight passengers for between $29,150 and $33,825, depending on the direction.

There has been far more interest in Eclipse Aviation's more modest jet, which can carry four passengers (plus two pilots) and lacks a bathroom. But it's a relative bargain, sold for $1.5 million and incurring far lower operating costs than its rivals. (The Eclipse jet costs about $300 per hour to operate, not including insurance, overhead or pilot salaries.)

Eclipse Chief Executive Vern Raburn said, "In some ways I'd equate what we're doing today to a rebirth of the industry," akin to the Douglas DC-3 developed in the 1930s. "It's much more of a value-based proposition."

Raburn estimates that Eclipse will be making one of its very light jets each day by the end of the summer and almost two a day by the end of 2007.

Not all air taxi operators use jets. SATSair, which serves the southeastern United States from Philadelphia to the Florida Keys, flies single-engine propeller-equipped Cirrus planes. The average cost to customers is $500 an hour, charged only when the propeller is spinning. Only one pilot is onboard, leaving space for three passengers of average weight, and the plane can land at virtually any small airport with an instrument approach.

"We get calls saying, 'I've flown my last commercial flight,'" said Stephan Hanvey, SATSair's president and chief executive. He said commercial flights have become so annoying that people have been driving up to six hours instead of going commercial. "We have a lot of customers who are driving instead of flying."