European start-ups launch VLJ air taxis

 - October 27, 2008, 11:12 AM

Blink is stepping up its low-cost European air-taxi network with the introduction of three more Cessna Citation Mustangs due to have entered the fleet around press time. The London-based company has reported high utilization rates for the first aircraft, which entered service in early June, and has said that it is achieving its goal of offering per-seat costs that range from 25 percent less to 25 percent more than business-class scheduled airfares on equivalent routes.

With 45 Mustangs on firm order, Blink is due to start receiving its remaining aircraft at a rate of one per month starting this month. For some weeks during the
first three full months of operation, the first Mustang was logging as many as 30 occupied flight hours, putting the operator on track to achieve its goal of getting around 1,000 revenue flight hours from each aircraft annually. Blink’s business plan calls for the Mustangs to fly an average of four hours per day five days a week.

“We’ve been flying the Mustang like a 737 on some days,” said Blink managing director Peter Leiman. “One day in July we did an 11-hour day with eight sectors, five countries, six cities, three customer groups and a change of crew.” The itinerary started in Geneva and included stops at the Dutch city of Maastricht, Antwerp in Belgium, Bordeaux in southwest France, London and Amsterdam before the airplane returned to Geneva.

Quite apart from the impressive operating economics of the Mustang, realistic, efficient scheduling and detailed planning are critical to making Blink’s lean air-taxi model work. The premise of the company’s ambitious business plan is that traditional ad hoc charter is not cost effective because fleet utilization is inefficient and the majority of customers fly in larger and more expensive aircraft than they actually need.

So far, business travelers have accounted for 80 percent of the customer base; many of them have abandoned scheduled airline service for the first time and Blink has already achieved significant repeat business, with 95 percent of customers already having taken more than one flight. Clients have included major public companies, middle-market private equity firms and art gallery owners. Blink is now in discussions with several large companies about operating scheduled corporate shuttle flights several times a week between specific locations.

Most of the early bookings have been for same-day round trips either between primary and secondary European cities or between two secondary cities. Some have included onward flights to another city. During August, Blink managed to book half of the return legs for the six one-way trips it made, greatly improving yield
in an operation that charges only for occupied hours.

“These initial weeks of operation have helped us to learn which sectors are profitable and how the aircraft actually performs when fully loaded and fully fueled,” Leiman told AIN. “It has reinforced our belief that flights of between 90 minutes and two hours are the sweet spot for operations with the Mustang.” Leiman maintained that VLJ operations are immune to the demand-depressing impact of rising fuel costs because even with oil at $150 per barrel, the price of jet-A still accounts for only 15 percent of the charter rate.

Later this year, Blink will launch an online booking system that will allow clients to get better charter rates if they make early reservations for aircraft. In the coming months, the company also intends to announce the location for a string of European bases around which it will build its air-taxi network, with aircraft strategically positioned to minimize empty-leg flights.

On top of the base charter rate, customers are also billed for landing fees. Minimal catering–a few light snacks and some basic beverages–is provided for flights. Customers are permitted some limited leeway beyond agreed departure times but then have to pay additional rates to keep the aircraft waiting.

Blink, which is backed by $30 million in start-up capital, aims to receive its own aircraft operator’s certificate by year-end. It has begun operations under the AOC of TAG Aviation, which is initially providing the aircrew. Blink has recruited four senior training captains from British Airways and the airline’s head of air safety. It intends to employ four pilots for each of its aircraft.

Meanwhile, rival European VLJ air-taxi start-up JetBird has raised an additional ?10 million ($14.2 million) launch capital by selling a 9.3-percent stake to an undisclosed Saudi Arabian family business. The Dublin-based group has also secured debt financing from the Royal Bank of Scotland to cover the “pre-delivery” payments on the first 25 of 53 Embraer Phenom 100s that it has on firm order and says that it is close to firming up orders for 47 more.

JetBird is due to take delivery of the first Phenom 100 in April, but it will likely defer the start of charter flights until June, by which time it should have three aircraft. It has indicated that its first base will likely be in Germany, as it begins to establish a western European network. The first 25 Phenoms are due to be delivered in 2009 and 2010, and JetBird wants to have all 100 aircraft operational by the end of 2013.

New British air-taxi operator FlairJet plans to enter service in May with a pair of Embraer Phenom 100s based at Oxford. It will lease the very light jets from an undisclosed Embraer customer in Europe who has 10 Phenom 100s on order.
FlairJet has one Phenom 100 on order (plus one option) and is due to receive this in 2012. It has an option to lease additional Phenom 100s beginning in 2010. The company is considering Embraer’s larger Phenom 300 and Legacy 500 for future fleet growth.

The company is being launched by Monarch Airlines Airbus A320 captain David Fletcher and has financial backing from three London-based lawyers. It will be based at Oxford Airport in southern England and will aim to serve a largely local market in surrounding counties, focusing on customers in the legal and financial industries.
FlairJet has recruited Air Atlantique flight operations director Gerry Rolls and will recruit other flight crew closer to the start of services. It is now in the process of applying for its aircraft operator’s certificate.

The company is planning a route network of air-taxi services with the four-passenger Phenom jets, covering m   ainland Europe, plus UK cities including Manchester, Birmingham and Newquay, as well as cities in Scotland and Ireland.

“Oxford Airport will be the center of the wheel, and we are looking forward to adding the spokes,” said Fletcher. He said that FlairJet had also considered using Farnborough Airport, closer to London, as a base but had ruled this out because high landing fees and operational restrictions did not, in his view, make this commercially viable for a new VLJ charter service. 

FlairJet selected the Phenom after evaluating both the Eclipse 500 and Mustang. Fletcher said that he considered the higher price of the Embraer jet to be warranted by its large cabin size and better lavatory. The operator will provide Internet access in the cabin.

The new operator’s marketing strategy will target professionals from the legal and financial sectors. It believes that Oxford is an ideal hub for drawing charter customers from the surrounding counties of Oxfordshire, Buckinghamshire and Berkshire, which reportedly constitute Europe’s most affluent region.