Monday, March 06, 2006

The Air Taxi: Disruptive Innovation




The emerging Air Taxi transport concept has the potential to revolutionize the air transportation industry. This revolution will be driven by highly-disruptive innovations that leverage new technologies that make new operating concepts feasible. While some existing Air Taxi operators are positioning themselves to be market players in the new paradigm, to compete against more agile entrants they may be forced to reinvent themselves to ensure their continued existence.

A Solution for the National Transportation System Aerospace Element
The National Transportation System (NTS) includes Airfields and Airways, roads and highways, as well as waterborne, and railway transportation. It even includes pipelines. In short, any means or method to move goods and services from one point to another is part of the NTS. The roots of the emergent Air Taxi concept is found in results of studies conducted in the 1990’s, which revealed a need to add capacity to the existing Air Transport System element of the NTS to support continuing national objectives (economic growth, improved distribution of goods and services).

Current Air Transport Capability Woefully Underutilized
The studies found there was underutilization of smaller regional and community airports that were already part of the National Plan of Integrated Airport Systems. These studies also showed that there was huge untapped potential for using the existing airspace and airports beyond the current paradigm relying on commercial airline hub-and-spoke operations for the near total movement of passengers. The hub-and-spoke system is designed to make things as efficient as possible for the airlines to move aircraft from place to place, and is not the most efficient way to move the passengers riding those planes from their starting point to their ‘final destinations’.

While nearly all Americans live within 20 miles of more than 3000 airports that are part of the National Plan of Integrated Airport Systems, only about 600 of those airports have scheduled commercial air service, and 70% of all air travel involves just 31 ‘hub’ airports. Thus, most trips are not point-to-point under the current system. Unless your travel is a single direct flight, you are traveling farther than you really need to go, and taking longer to get there than absolutely necessary.

Add:
1. the time it takes to get to or from one of the relatively few airports with scheduled commercial flights,
2. extended layovers (think Chicago’s O’Hare in January) or
3. impacts to the national system when a critical hub is closed for some reason affecting flight dispatches a thousand miles away,
and the equation for the best travel method can change dramatically.

[As an egregious example of the last point, I have personally sat at a gate in sunny Burbank, California waiting for flights to clear out of Salt Lake City, Utah that were waiting for flights to depart O’Hare, that were waiting for Northeast airports to open up after a snowstorm the night before.]

While as one might suspect the choice of transport method for taking trips is based upon individual traveler’s value judgment, the choice of ‘fly or drive’ tends to fall towards flying as the distance between departure and arrival points grows. Since September 11, 2001, and the subsequent changes to airport and airline procedures, the equation seems to be shifting to driving even longer distances instead of taking a scheduled flight. The Air Transport Association (subscription required link here) notes that:

…the U.S. Inspector General's January 2004 report shows that turboprop flights to small airports declined 41% between December 2000 and December 2003. McElroy cited another factor: "We continue to see reduced travel on 300-mi. routes and believe it's due to a change in the 'fly versus drive' equation. Due to security procedures and corporate travel budget changes, many people are driving when they could be, and used to be, flying.

The creation and implementation of the Air Taxi market, whereby hundreds or thousands of VLJs carry one to ‘a few’ passengers point-to-point between thousands of airports is to air transportation, what building more interstate highways and adding lanes to all existing interstates would be to motor vehicle transportation.

Factors Working for Air Taxi Success
Success of the Air Taxi concept rests in their ability to make travel more efficient and economical. This ability will depend upon several technology developments, some of which have already been accomplished or have had critical breakthroughs

As an outgrowth from the original studies, NASA and other agencies started a series of initiatives to make increased use of smaller aircraft and smaller airports feasible. One of these initiatives was the Small Aircraft Transportation System (SATS) which focused on maturing needed technologies: on-board computing, advanced flight controls, improved “Highway-in-the-Sky” displays for improved operator situational awareness, and automated air traffic separation and sequencing. The SATS proof-of-concept program concluded with a successful demonstration in June, 2005, but other initiatives are moving forward as part of the Next Generation Air Transportation System (NGATS) and are part of the overall long-range strategic planning by the Department of Transportation.

Continued next post....

No comments: