While John Staten, chief financial officer at DayJet concluded that microjets are more friend than foe during the Regional Airline Association (RAA) meeting, the reaction of airlines was one of curiosity: as in, "What do these guys know that I, as a long-time veteran of the regional airline industry, don't know?"

While small regionals are keeping close tabs on developments, so far, for larger regionals, microjets - or Very Light Jets (VLJs) - have not even made it to the radar scope, according to American Eagle spokesperson Dave Jackson. Indeed, the invitation to speak at RAA was prompted when several CEOs heard him at a conference and thought he would be interesting for both airlines and associate members.

RAA indicated it is too early to assess the impact of VLJs on regional airline operations, given the wide divergence in their forecasted numbers. However, it continues to follow this issue, from both a technical and market perspective. Be that as it may, Staten expects the advent of the DayJet concept to stimulate demand for regional service, because it targets those who are now driving to their destinations.

Smaller regionals, however, see the potential for revolutionizing small community air service, even as they doubt the business model. In the meantime, erroneous reports circulated recently that the man who gave the concept most of its credibility - former AMR Chair Robert Crandall - tabled his project, PogoJet, indefinitely, saying current VLJs are not right for the job.

"We have indeed said that we do not believe either Adam or Eclipse will be consistent with our business plan," Crandall told Regional Aviation News. "However, there are alternative VLJs that will be available, and we have said we believe we will launch service in 2009, which is anything but indefinite."

Crandall does not expect such service to impact scheduled service. "We are not talking scheduled service and we are not talking service to major airports," he said. "We are not talking prices even remotely competitive with scheduled service. So, I do not see these services as any threat to scheduled services."

Revolutionary concepts are always greeted with a mixture of concern and doubt, and VLJs are no different. (RAN, May 1) Given the growing hassles surrounding air travel, who wouldn't want to bypass all that in favor of a point-to-point service that saves time and the associated travel costs? After all, the out-and-back-in-one-day business trip was what built the regional airline industry in the post-deregulation period.

"There are 52 million intra-regional business trips per year," said Staten, "40 million of which are by car. Our target is the business traveler who drives between intraregional markets where there is no or limited air service. We will be competing with the automobile. We expect that we will stimulate growth for both scheduled airlines and DayJet because we are pulling people out of the car. We are providing a new model of travel that is cost effective when considering the true cost of travel which includes hotels, mileage, and time lost by being in an automobile."

Staten expects that DayJet will capture between 1.5 percent and two percent of the business. "The auto wins predominantly," he said, "but we predict an uptick in passengers because we are rounding out the schedule."

Staten noted that the DayJet concept is targeting the short haul - less than 600 miles - which is, of course, why they have the most potential for impacting regionals, especially smaller regionals that serve the 250-450 miles range that is the real focus of DayJet. The company also is focusing on a $1 to $3 per seat mile, versus the 75 cents to $1 per seat mile on a commercial flight between two mid-size cities. It plans to use a large fleet of small aircraft within strict regional boundaries. It also is betting the company on a sophisticated software that can do the scheduling needed to keep it operationally efficient, flying directly between secondary airports. But it is the scheduling that prompts regional airlines to question the concept.

Commutair President John Sullivan pointed to the high cost of taking the hub-and-spoke concept out of the picture. "With hub and spoke, say you have 24 spokes so for [origin and destination] you create 24 flights times 25 spokes, you'd need 600 aircraft. With the hub and spoke you can do it with 25 aircraft. It is amazing how many aircraft you need versus hubbing. That's what these guys are suggesting. I'm very skeptical but these are smart guys and I know sometimes we get buried and look at the industry with ingrained thinking and if you peel off the lid and look at it differently, you might see something different."

BACK Aviation Solutions Analyst Gueric Dechavanne, who directs the valuations group and manages corporate aircraft appraisal, says whether VLJs are friend or foe really depends on who is talking. "The commercial airlines say they will be a bad thing because they will flood the skies like a dark cloud and create more congestion," he said. "The GA and corporate guys say that is ridiculous because they are not going to be produced in those kinds of numbers. The Citation 500 and Citation 1 were produced to offer the same type of capability. The difference is we are 20-25 years more advanced in terms of technology. So this is not a new phenomenon. What is new is the amount of aircraft that is expected to be produced in the next five to 10 years and the price range of the aircraft...A $1 million to $3 million jet is probably every pilot's dream. There is quite a bit of the existing fleet that is ready for replacement."

He questions whether they will "fill the skies" as feared. "They are not the same as the commercial airlines," he continued. "They will be flying out of smaller airports. I don't think the VLJs will fly out of major airports because of the cost of going into those airports and concerns over congestion. Why would someone do that? It also remains to be seen if the air taxi aspects of the service will be successful." Crandall agrees, saying he highly doubts VLJs will cause "any big-time congestion."

Dechavanne called the concept good, offering a lot of flexibility and coverage that is not now available by air, but pointed out that people will not drive 100 miles to find it. He noted the similarity in pricing as a walk-up airfare, for going exactly where the passenger wants to go. "That is something that needs to be tested," he said. "There is a big question whether corporations will use a single-pilot operation.VIPs want two pilots. There is also the limited range and smaller aircraft. What will the payload look like when you start adding on people with bags?"

As to the impact on regionals, Dechavanne expects the VLJ on-demand-service would only be for a certain level of employee, and, as another business aircraft source pointed out, these are people who have the ability to buy their own aircraft or would otherwise be flying a corporate Citation.

"Time is critical and they don't have to go through a hub with all the hassles and security," said Dechavanne. "From a business point it makes sense to pay to go to the nearest airport." However, he indicated that he did not see corporations paying for middle-level managers or salesmen to fly. "This is for upper management when time criticality comes in," he concluded. "Sales people who now drive hit more than one customer when they go out on trips." He also expects that it would put too much of a premium on companies under pressure to increase revenues and reduce costs.

Sullivan is at once intrigued and concerned by the concept. "Whether you are concerned depends on which sector of the industry you are in," he said. "For the little guy we are watching them closely. What they seem to be proposing sounds radical and risky but at the same time, these guys have pretty impressive backgrounds. Crandall is a pretty smart guy. If they're smart enough to do what they did, it makes me think they may know something I don't know. I believe they bear further study on our part. I would not invest in them at this point, though. They have raised a lot of money and haven't flown a single flight and don't even have an aircraft certified for passenger flight."

His greatest concern is the depressing effect such service would have on fares. "Independence Air produced horrific pressure in the Northeast so I wouldn't rule that out with VLJs," he said. "That is why we are watching them closely. Even if they make it only a year, that is a big problem for us." Crandall, however, does not think they will put price pressure on scheduled airlines.

Sullivan's greatest doubt comes in scheduling such aircraft, however. "They have tremendous overhead," he noted. "In the end they still have to pay for the aircraft, flying the aircraft, pilots and aircraft maintenance and you'll hardly know where the aircraft is going to be from one day to the next. They may have figured out the dispatch and maximizing the use with whatever booking pops up but that still doesn't mean it's going to work."

He also questions the cost of the aircraft and noted that in the early days of deregulation, $1.5 million bought you 19 seats and fuel was at 50 cents.

Crandall indicated he thought a lot of what is being said is way off base. "The concept is to broaden the market for private transportation by using less expensive aircraft much more intensively than small aircraft are now used," he told RAN. "We will also make booking and using private transportation far simpler than it is today, and by using the thousands of small airports in the U.S., will make private air transport far more convenient than it now is. That combination of convenience and price will entice many more business and leisure travelers to use private transportation when they have a mission that suits its characteristics."

As for the impact, he added, "Yes, VLJ's will change the world, but only by adding another option for the millions who can afford occasional private transportation. It will be a big market, but a tiny percentage of air travel for many years to come."