Linear Air on Verge of FAA Approval for Very Light Jet Service; Backlog Already Brewing

10/26/07

When it comes to business travel within the Northeast, there’s nothing more satisfying than climbing into your vehicle, turning the ignition key, pulling out, and then zipping past all the traffic at 160 miles per hour.

Of course, I’m assuming that your vehicle, like the one I’ve depended on for many of my regional trips, has wings—and that you have a pilot’s license. No? Too bad—you’re stuck choosing between crawling along on wheels, delay-maximized and comfort-minimized commercial airlines, or eye-popping pricetags of charter jet travel.

Enchanted as we private pilots are with the convenience, efficiency, and surprising affordability of small-plane travel, most of us sooner or later start wondering why there isn’t a thriving “air taxi” industry in the U.S. to let everyone else in on the deal by ferrying travelers between any of thousands of small airports at a cost of between $100 to $400 per hour of flight. We eventually realize that most people (wrongly) see small prop planes as low-tech to the point of being dangerous, and (rightly) figure they will likely have a much longer, more turbulent flight than they would in a jet.

That’s why small-plane pilots tend to be big believers in the potential of “very light jets,” new four- or five-seat jets from companies like Eclipse Aviation, Cessna, and Adam Aircraft. These micro-jets can operate at close to the same speeds and altitudes as the light business jets flown by charter services, but at less than half the cost. That makes them tailor-made to the needs of an air-taxi service. And any day now, Concord, MA-based Linear Air is expecting approval from the Federal Aviation Administration to fly its first “VLJ.” Expect service to start in early November. But be fast, a backlog is already brewing.

Linear Air’s CEO, Bill Herp, who got his pilot’s license in 1996, has been a “VLJ” fan ever since he first heard about the concept in 2001. At the time Herp was CEO of e-Dialog, a Lexington-based email-marketing-services firm he founded and eventually built up to over 200 employees, and which constantly sent him and fellow executives on nightmarish, prolonged commercial-airline escapades to pitch potential clients. Herp started playing with the new math of VLJ-enabled flight and decided to build an air-charter business around micro-jets. “E-Dialog was running pretty well, and I saw a window opening for a new approach to air travel,” he says.

Herp turned over the reins of e-Dialog, and by 2003 had raised $6 million to buy a small fleet of eight-seat Cessna Caravan single-prop planes to offer up to executives and high-end New England vacation travelers. “The VLJs weren’t out yet,” he explains, “but the Caravans operate at similar costs on similar kinds of trips, so it was a good way to try out the business model.” Some 1,200 people have flown Linear Air’s Caravans since then, encouraging Herp to open up locations outside of New York City in White Plains and outside of Washington, D.C., in Manassas, VA.

Now the company is ready to step up to jet power. It took delivery on an Eclipse Aviation VLJ earlier this year, and with FAA certification expected momentarily, service could begin within a couple weeks. Herp says he has a database of 8,800 people, mostly business travelers, who haven’t been interested in Caravaning but who say they’re ready to fly in the Eclipse. That’s not hard to understand: The Eclipse travels at nearly twice the Caravan’s 180-mph speed, and because it’s pressurized can usually fly above bad weather. The three-passenger limit is no impediment, insists Herp, noting that most light-jet flights carry only two or three passengers, as do most of his Caravan flights. The bigger problem will be meeting demand. To that end, Linear Air plans to bring another three Eclipses online in the next three months, and another 11 next year. Herp says the company will be operating a fleet of 300 VLJs by the end of 2012, by which time it will employ some 1,000 pilots.

Linear Air will charge about $3,000 for a same-day round-trip flight of about 300 miles in each direction. That’s actually less than three business-class, short-notice tickets cost to most non-major-city destinations on a commercial airline–and you aren’t tied to the airline’s schedule, or the sort of plane changes, security lines, parking hassles, and air-traffic delays that can tack hours onto a flight to a neighboring state. A typical charter jet service, meanwhile, would charge about $7,000. “We’re targeting businesspeople who haven’t been able to justify private air travel, by offering it at a new price point,” says Herp.

Linear Air is likely to face competition from other VLJ operators. DayJet is getting ready to operate a fleet of Eclipses initially in the Southeast and then later nationally. And a Chicopee, MA, start-up called Pogo is also planning to launch service here in the Northeast. But Herp says he’s not worried. Unlike Linear Air, DayJet will operate more like an airline by flying only between a relatively small number of select airports, in the hopes of filling planes. Any airport with a 4,000-foot-long runway will do for Linear Air (though the Eclipse could land on a far shorter one in an emergency). And Pogo doesn’t plan to start flying until 2009. Established charter companies are adding on VLJs, too, but Herp thinks his experience running a high-tech marketing services firm will give him an edge. “VLJs are providing the same sort of classic market disruption that e-mail did, and that opens up an opportunity for new companies to dominate,” he says.

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