Awaiting new funding DayJet postpones expansion plans

By Chad Trautvetter

June 1, 2008
Aviation Financing

On May 6, very light jet air-taxi operator DayJet put its growth plans on hold after failing to obtain another $50 million in funding to progress to the next stage. As a result, the per-seat, on-demand air taxi laid off 100 of its roughly 260 employees and seeks to sell or lease 16 of its 28 Eclipse 500s.

Additionally, DayJet has deferred beyond this year delivery of its remaining orders and options for 1,400 more Eclipse 500s. Eclipse president and CEO Vern Raburn confirmed that DayJet hasn’t canceled any orders for Eclipse 500s and said the air taxi’s troubles aren’t “anything more than a minor hiccup.”

In a statement, DayJet president and CEO Ed Iacobucci said the company has “reduced its employee base across most areas of its business” since it couldn’t obtain the needed financing in a difficult credit market. “Suffice it to say that given the current state of the U.S. capital markets, the timing of our planned financing could not have been worse,” Iacobucci added.

DayJet has proved that its per-seat, on-demand, air-taxi business model using Eclipse 500 VLJs works, he told AIN, but to date the operation has been running as a “proof-of-concept,” which is “only the first step to profitability.” Without the needed money, DayJet has to “scale back to a size that is consistent with the demand of our existing customers and service region.” The reduction in personnel was necessary, Iacobucci said, because DayJet had hired and trained to levels anticipating the infusion of capital.

DayJet will continue to serve its existing 1,500 members, who include more than 550 active travelers and nearly 200 frequent fliers, using a fleet of 12 Eclipse 500s. Further, Iacobucci said the company will expand in the Southeast U.S. but at a slower rate “in response to customer needs.”
The news about the DayJet layoffs, a charter industry source told AIN, “was disappointing but not surprising.”

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