Dayjet, the once promising air taxi pioneer in Florida, has announced that it laid off employees in all division- 100 total- and has grounded all but 12 Eclipse 500 aircraft.  Dayjet is trying to run an under-capitalized business with an unproven business model.  As firm believers (and investors) in the air taxi concept, it is disheartening when there is such a high-profile failure.  We say “failure” because we don’t have confidence Dayjet will be flying for long.

Dayjet was begun as if it was dayjet.com from the 1990s.  It burned through some $70+ million and began operations with a staggering 260 employees and $130 million in debt (from purchasing planes). It purchased a type of plane that wasn’t certified for known icing conditions and has been more expensive to operate than forecasted.  Founder Ed Iaccobucci  says Dayjet has proven the business concept but its the victim of the credit crunch.

Sorry, we don’t buy it.  Dayjet is  a great idea and the air taxi business is a concept whose time has certainly arrived.  But Dayjet banked on hyper growth (like an internet company) to sustain itself.  It also invented an untested “pay-per-seat” model for air charter.  Innovative, but confusing for customers.  We don’t even understand it.

Who are we to second guess a business model? And it may still work.  But we believe in growing into a market, not trying to grow the market into your business.
-Andrew

(full disclosure: We are major shareholders in an air taxi start up). -ed

While we think it’s somewhat of a contradiction (”TOP Economy class seats”), our new friends at geekabout.com sent us their list.  Not surprisingly, the most comfortable seats are on foreign airlines.

Check out the list.

In a Statement of Administration Policy, President Bush says he will veto the current FAA Reauthorization Bill.  Among the series of objections, the lack of user fees stands out the most.

There is wide bi-partisan support for the current funding bill, which keeps the fuel tax as the main funding measure for general aviation.  However, the White House is intent on supporting the airlines’ position that user fees are the only “fair” way to fund the system.

Glenn Tilton, the uniquely greedy  CEO of United Airlines, has already proven he can’t run an airline (he was at the helm when United first filed for bankruptcy and is quickly running the place into the ground), can’t find anyone to merge with, and can’t keep the stock price above water.  But he sure can line his pockets.  UAL’s 2007 compensation filing is out for its top execs, and Glenny-boy took home a total of $10.3 million in pay, bonuses, and stock, according to the Air Line Pilots Association (granted, a long-time nemesis of Mr. Tilton)

As President Bush might say, “you’re doing a hellava job, Glenny.”

UAL’s stock price is near a 52 week low and is off seventy percent for the year.  In any other business, that might result in someone getting fired.  But not Glenny-boy.

Meantime, United’s pilots are officially opposing the potential merger with US Airways.  Pilot’s have to be smart. They fly complicated machines and must perform to precision.  Airline management can be dumb as luggage. 

-Andrew

It’s the airline-equivalent of sleeping around. After being jilted by Delta, United thought it had a deal to hook up with Continental.  But to its surprise, Continental decided to screw  United and said it would rather merge with a pack of rabid monkeys than do business with United .  Someone from Continental probably decided to actually fly United and reported back “WTF are we thinking?”

So, desperate for someone to bail out his incompetent running of an airline, United CEO Glenn Tilton has turned his wondering eyes to another finely-tuned  operation, the ailing US Airways.  Now, it’s important to remember that Mr. Tilton was at the helm when United last flew into bankruptcy.  He and top execs then pocketed millions after United emerged from bankruptcy.  Now, United is apparently close to running aground again and Glenny-boy probably thinks his braincell-challenged Board will likely not let him keep his job if he wrecks the place again.  It’s also important to note that US Airways was created when America West bought US Airways.  That merger hasn’t gone well.  The pilots from the two airlines are fighting over seniority and they still haven’t fully integrated the reservation system, which is apparently run on an Excel spreadsheet because I always have booking trouble.

To recap:  United first wanted to merge with Delta, which would have created the nation’s largest airline and probably made sense.  Delta merged with Northwest instead.  Then, United hoped to merge with Continental.  Continental is said to be a pretty well-run shop.  When that deal collapsed, United quickly announced it may have a deal with US Airways.

We understand United is now holding talking with moped company Vespa.

-Andrew

It was a good idea.

The all-business class airline, EOS, filed for Chapter 11 bankruptcy and ceased all operations over the weekend.

You can read the airline’s note here.  Unlike dumb airline ideas, like Skybus (which collapsed after about a year), EOS should have been a home run of an idea and we think it can still succeed.  EOS passengers routinely praised the experience and the airline had solid capacity.

General aviation survives another day!

Congress has come up with an FAA reauthorization bill that raises the fuel tax but includes no user fees.  A propses $25 per flight user fee for turbine aircraft is also on the table.

Let’s celebrate by going flying.

But, argh, fuel prices are going through the sky!

The new Adam Aircraft is about the fire up the engines again.  Reports say Adam plans to rehire about 100 people to work at its Centennial Airport facility outside Denver.

We’ve learned that the new owners- a Russian investment firm- will keep the Adam name.

Analysts say Adam has an uphill battle ahead.  Many of the obstacles the VLJ maker faced before remain and the economy is only weakening.  Still, we believe a better organized management team might avoid the mistakes that burned through cash the first time around

Good luck!  We’re with you.

-Andrew

The Adam A700 very light jet might make it after all.  A bankruptcy court has approved the sale of Adam’s assets to a Russian private equity firm.  The new owners say they could hire 100 employees next week at the Centennial Airport facility in Colorado.

The A500 twin prop has already been certified and Adam sold a few.  The FAA has to re-certify the new company.

As we understand the press reports, the new owners AII are also owners or investors in a Russian air taxi start-up and may hope to use the A700s for that venture.

Bucking the light sport trend, Cirrus Design says it will build its LSA, the SRS, in the United States.  Cirrus also announced that it is installing a new glass panel, castering nosewheel, and differential brakes.

No word just yet on where in the U.S. the SRS will be made.

Let’s get this thing built and to market!