In the last week, I have found two new speakers for Flight School, both in the “light” end of commercial aviation.
First, Miwok Airways. One thing I love about this market is that the CEO is often the pilot… just as in start-up software, the CEO gives the demos. In this case, Gad Barnea, the CEO and founder, gave me a demo flight – from the San Jose Jet Center to Monterey. His company, Miwok Airways, is still in stealth, so I can’t say much about it yet… but I’m pretty sure that by June 4 he’ll be able to talk. For now, he’s pretty cryptic: “Sustainable air-taxi market economics and business models. Tightly defined geographical services areas with a focus on flight densities, yield management and the technology to support it.” Whatever!
Barnea does know what he’s talking about. Like so many people in the biz, he comes out of the software start-up world, with a focus on the optimization/scheduling/scalability side of things. His companies (as founder, CEO or techy) include ZebraZone, a company specializing in high-availability solutions for mission-critical businesses, GigaSpaces, selling a software platform with a technical edge in scalability.
But he’s also an experienced commercial pilot, published aviation author and a former Israeli Air Force air traffic controller. And now he’s more interested in how to build both an optimized scheduling system and a business model that will work. For now, he’s based in California’s Bay Area. And as a pilot, he kept me feeling secure even over that bumpy bit where you head over the hills from San Jose towards Santa Cruz. You can see a photo at http://www.flickr.com/photos/edyson/2296617656/
All service, all the time
JetAVIVA is taking a lower-hurdle approach, supplying services only at this point. “We were in the very-light jet space,” says co-founder and CEO Ben Marcus, “and so we decided to build a very-light management company.” Now 25 (true), they were both at Eclipse, Marcus as a salesman and flight test engineer and Sigari as a salesmen and a propulsion systems engineer They left Eclipse on good terms…and are filling a hole the larger company can’t effectively address (for now). Their original idea, back in March 2006, was to run a VLJ management company that offers an air-taxi service using lift provided by individual owner’s jets. This is the traditional charter model: An operator makes money on providing operating and management services, while the capital costs are borne by the individual owners. The owners earn a little money by leasing out their planes (though they get to discover the costs of maintenance, which often eat up any profits), and they get the depreciation tax benefits. And, of course, they get to say “my plane.”
But things turned out differently, and now JetAVIVA is mostly in the business of “accepting” planes on behalf of their new owners: It represents the client at closing, test flies the jet, and completes a pre-purchase inspection. Currently, JetAVIVA serves about 75 percent of Eclipse’s new individual customers. And instead of flying the planes for transportation revenue (a highly regulated business), they use the capacity they have access to for flying lessons. Most of Eclipse’s individual customers are amateur pilots who need experience flying an Eclipse. And given that not all its systems are ready (including FMS and a fully functioning autopilot), there’s a fair bit for a non-professional pilot to cope with. JetAVIVA offers its training in 10-, 25- and 45-hour blocks.
Their clients typically pay them for these services, and some of them give JetAVIVA control of their planes (for a management fee, of course) to cut their costs. “Most of these guys know whether they’ll need their planes more than seven days out, and they’re happy giving us control,” says co-founder and president Cyrus Sigari. That lets them pretty much covers the owners’ own operating costs – and it gives JetAVIVA predictable access to capacity.
And finally, jetAVIVA is a traditional middleman: The two founders have bought and sold more than 150 aircraft, of which more than 100 were VLJs including Eclipses and Mustangs.
I like this company and these guys. They probably have a better understanding of the private light-jet market than anyone around, and they are careful businessmen. Right now they have about 10 people and four Eclipses under management, and they are profitable. Where they go in the future is unclear, but they’re not taking any huge risks along the way…which seems to be the right flight path for now!