European low-cost air taxi pioneer Blink has taken delivery of three more Cessna Citation Mustangs. It has four of the very light jets in service and another 26 on order, with five more due to arrive by October.
“We remain on course with the right product at the right time, offering value for money,” Blink managing director Peter Leiman said. “We beat our 2008 projections for revenues and our costs are under budget.”
However, Leiman also indicated that Blink might review the pace at which it takes delivery of the remaining Mustangs it has on firm order. He said this is driven partly by the fact that Cessna has reduced its projected output of the type and partly due to the need to assess future capacity and projected demand. “The next aircraft will arrive at some point this year,” he said, while stressing that the young company remains committed to taking delivery of all 30 Mustangs.
Blink is backed by $30 million in funding from investors. “But we are not buying the aircraft on equity financing and asset financing is tough right now,” said Leiman. He indicated that the constrained credit market today is impacting levels of leveraging on aircraft investments, as well as their price and other terms associated with the loans required.
Nonetheless, Blink has been reporting some of the high utilization on which its business plan is founded. Some of the Mustangs have flown as much as 11 revenue hours in one day, logging eight separate sectors around Europe.
The company is trying to promote its flagship product: bespoke shuttle services for companies needing to move employees and customers between various specified locations on a quasi-scheduled basis. “We are working with FTSE 100 companies and have done some proving flights to show that we can save around 15 percent compared with the cost of using commercial airlines,” he stated.
Having launched operations last June, the company claims to have more than 300 customers, ranging from large publicly held companies to private individuals. Flights are currently operated by TAG Aviation as Blink prepares to establish its own commercial aircraft operator’s certificate.
Earlier this year, Blink launched what it claims is business aviation’s first frequent-flier program. Through BlinkFocus, customers can bank 10 percent of the value of their charter bookings made at “full-fare” rates to use for subsequent flights.
A customer who makes five round-trip flights from, say, London to the south of France would earn enough credits to make a round trip to anywhere within one hour’s flight time. There is no limit to the amount of credit that can be accrued and it never expires.
However, at a Royal Aeronautical Society conference on very light jets held in London in March, Patrick Margetson-Rushmore, managing director of long-established London Executive Aviation (LEA) said “the jury is still out” on whether the new-generation air taxi business model expounded by Blink and others “will ever come to fruition. LEA also operates Citation Mustangs and was the first European operator to introduce the type into commercial service.
“In recent years we’ve seen some very innovative new players announce their entry into the market, with pure air taxi operators prominent among them,” Margetson-Rushmore told EBACE Convention News. “I would argue that they’ve done a lot of good in raising the industry’s profile and educating the market that business jets can also be good value. However, a lot has happened recently to challenge the ambitions of air taxis to revolutionize business aviation. We’ve witnessed the probable demise of Eclipse, a principal enabler for the model, as well as a nasty recession. In addition, we at LEA are skeptical that the high aircraft utilization aimed for by air taxis can actually be achieved. I would like to be proved wrong, but our experience to date makes me doubt it.
“We have always believed in the logic of smaller business jets, but with 14 years’ charter experience we have a good sense of when customers want to fly,” he told the conference. “They want to leave early in the morning and return late in the evening, and hopefully they’ll make extra stops during the day. But that is a world away from a high-utilization model that will rack up 1,200 hours per aircraft in a year. To us, a more realistic target is 400 to 600 hours, and does that make you an air taxi firm or just a charter operator. We find it hard to know where a line could be drawn.”