On Friday, DayJet, the first per-seat, on demand air taxi operating the Eclipse 500 VLJ, ceased all passenger operations. After about a year of flying and after burning through tens of millions of dollars, DayJet flew itself out of cash.
DayJet posted this message on it website, where it largely blamed current economic conditions for its demise. DayJet also took a parting shot at Eclipse Aviation, blaming the manufacturer of being slow in filling parts orders and satisfying contractual obligations.
DayJet had more than two thousand customers, according to executives. So, in some ways, they proved travelers will take air taxis. They did not prove their business model was viable.
We are sad to see any member of the aviation industry go out of business and as a partner in a start-up air taxi business, I personally want to know more about what happened. We have some armchair, Monday morning quarterback analysis of just what happened. Hindsight, even when flying, is always 20/20, right?
Keep It Simple, Stupid
The old saying, “KISS”, should have been DayJets’s business model. A customer simply wants to know if they can fly from Jacksonville to Orlando, when they can fly, and how much it will cost. But DayJet pioneered a visionary, but complicated, pricing structure. Customers were given numerous options that lowered or increased fares. Would they make additional stops? Would they agree to take other passengers? Would they be flexible on when they would depart and come back? To this end, DayJet spent millions on developing software that aimed to solve the famous “traveling salesman” problem. They may have done it (and should be noted for that accomplishment), but was the cost worth the result? Customers aren’t interested in doing math.
Manage Size and Costs. Every Day.
DayJet threw it all out there early on. They began with more than twenty aircraft and more than 200 employees. Instead of growing into the market, they needed the market to grow into them. Passenger loads never approached their goals. Last May, they grounded more than half their aircraft and laid off more than 100 employees. DayJet expected investment money to keep them afloat from quarter to quarter. As the economy unravaled, the model became unsustainable.
New, Unproven Aircraft
Like DayJet, Eclipse Aviation is a visionary company. However, Eclipse has had numerous management and operational problems. DayJet filed more than 90 operational reports to the FAA. And Congress is looking into whether the plane was rushed into certification. DayJet took a leap of faith with the Eclipse. Now, Eclipse is struggling too.
Air Taxi Industry is Still the Future
Neccessity is the mother of invention, someone said. And we need a new way to travel by air. DayJet will be remembered as focusing public attention on this new way to travel. Take the internet. Most of the early-stage companies are not around today. But the internet is. And it’s sort of big. And this will be big.
DayJet may go west, but the aviation industry owes them a debt of gratitude for putting air taxis on the map.
-Andrew
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