-T / T / +T | Comment(s)

Monday, October 23, 2006

EarthJet Develops "You Airways"

In a move aimed directly at airline passengers, investors have created a new business model for regional transportation services hoping to bring airline affordability and non-stop service to the business jet travel. Earthjet is offering up a the model which entails selling not only seats but air taxi franchises. The model marries two very disgruntled air travel players -- passengers, sick of commercial aviation hassles, and pilots, fed up with labor woes.

The West Palm Beach, Fla-based company is funded through a private placement last year and has offers to back the year-old company from "sophisticated investment bankers," according to President and CEO Dean Rotchin, who added the operation calls for a newly designed jet aircraft Earthjet is developing.

"Franchising is a successful structure in other industries, and it will afford growth and profitability in the air taxi market," said Rotchin. "An analogy would be Aircraft Fractional ownership - the real-estate timeshare business structure - which, when introduced into aviation by Netjets became very successful and now accounts for almost half of all business jet production volume. The fractional ownership model brought a new level of affordability to jet ownership, and the Earthjet franchise model will bring a new level of affordability to business jet travel. Fractional ownership brought thousands of new owners into the aviation market, and the Earthjet Franchise will bring millions of new customers into the air taxi market."

While qualified owner/operators make money by providing business jet passenger service at affordable prices, Earthjet handles all the back office work, including reservations.

"As the franchisor, our main business is developing the network of franchized Earthjet air taxi businesses," said the company's web site. "Our strategy includes leveraging business relationships through outsourcing, licensing, joint marketing programs, authorized supplier programs and other business arrangements, enabling the cost-effective operation of an efficient network of jets. Leveraging these relationships rather than owning the entire value chain permits us to remain focused on our core business -- growing the network through franchising."

Operations are not scheduled to begin until the four-seat jet is certificated in three years. The aircraft is based on market research and focus groups and is designed to give people "what they want when they travel." (See chart below)

"We are working with established manufacturers for the production of the aircraft," said Rotchin. "It is not a VLJ or Microjet" because it was specifically designed for the air taxi business rather than being designed for the private pilot and then adapted. Unlike the Eclipse 500, to which he compares his aircraft, it has stand-up headroom with a tube size the same as a regional jet. Recent discussions with another aircraft manufacturer, which has a jet currently in flight test, may be an equipment option, as well. The aircraft will be certificated to Part 23 Commuter standards and operated under Part 135.

Earthjet has already locked in two deals covering the Canadian and Latin American markets and expects franchises in the U.S. market to be available next year. The company sold the exclusive Master Franchise rights to veteran airline operators. Former regional airline president Steven Smith will develop the Canadian operation while World Aviation Holdings (WAH) acquired the Master Franchise for the Latin American market.

Smith, who once operated Air Ontario, WestJet and ZIP, is responsible for launching Earthjet's franchise in Canada, where the company estimates the potential will absorb hundreds of aircraft. The Canadian operations will be introduced shortly after U.S. service begins. WAH President Ronald Fune has served as president of four airlines. He expects master franchise fees, initial franchise fees and royalty payments from Latin America will be about $60 million over the first five years of operations. The two will be responsible for rolling out Earthjet service in their respective markets and selling the Earthjet Franchise System to qualified operators. They will also be providing ongoing support to their franchisees, along with support provided by Earthjet.

"Notice it's You AirWAYS and not AirLINES," says its website. "This is because our goal is to eliminate as many lines as possible. Fly Earthjet and your progress will be unimpeded. No lines and no hassles -- only non-stop flights, on your timetable, to and from airports that are closer to where you need to go."

Professional pilots helped developed the business concept and the company reports much interest with pilots filling out the on-line application form. Pilot benefits include access to a purpose-designed jet, uniform safety systems and culture (including an Aviation Safety Management System), extensive training, including business training; centralized reservations systems; computerized back-office systems; approved suppliers at preferential pricing; complete financing packages and on-going support.

 

Compare the Evolutionary Benefits of Earthjet with Other Air Travel Service:

Earthjet Airlines Charter Jet Cards Fractionals Ownership
Price*
$650
$800
$4,000/hr
$5,000/hr
$8,000/hr
$8,000/hr
Upfront fees
no
no
yes
yes
yes
yes
Other fees
no
no
yes
yes
yes
yes
Total travel time
2 hours
up to 8 hours
2 hours
2 hours
2 hours
2 hours
Your schedule
yes
no
yes
yes
yes
yes
Service to local airports
yes
no
yes
yes
yes
yes
All non-stop flights
yes
no
yes
yes
yes
yes
Book by the seat
yes
yes
no
no
no
no
Easy pricing system
yes
no
no
no
no
no
Uniform jet fleet
yes
no
no
no
no
no
Legroom
yes
no
yes
yes
yes
yes
Tray table is a desk
yes
no
maybe
maybe
maybe
maybe
Air cell phone, Internet
yes
no
no
no
maybe
maybe
Cockpit security door
yes
yes
maybe
no
no
maybe

 

*Based on Earthjet 600 mile trip per seat; full Y fare airline seat price; charter flight in light jet; Fractional share of light jet all cost included; Jet Card cost per trip; Ownership of light jet cost of 600 mile trip based on 300 hours per year.

[X] Dismiss Ad