Flight School Air: Some early thoughts

I’ve been at Release 1.0’s Flight School 06 with Sean for the last couple of days. You can read his early comments here. It was another classic Esther Dyson session, she (along with her team) has this uncanny ability to spot something important going on and then bringing together all the movers and shakers into one room quickly and easily. My thanks to Esther and team.

I don’t have a pilot’s licence, don’t own a plane, and have never invested in anything remotely to do with planes or aviation. Yet I could not stay away, because of a number of things:

One, affordable aviation, even shorthaul aviation, changes lives. I know my life has changed as a result of the availability of passenger aviation. And I believe that this mode of transport, as it becomes more affordable and more ubiquitous, can make a real difference to people’s lives everywhere. Releasing time, increasing productivity, providing timely healthcare, simplifying the process of infrastructural regeneration, allowing people to sample different lands and cultures more easily, increasing our leisure options, the list is endless.

Two, the air taxi business has a number of characteristics in common with the way the World Wide Web started, commonalities that intrigue me and excite me. I feel I am watching something important happening. More of this later.

Three, there’s real money to be made. These are amorphous times for this industry, and we need changes aplenty. Changes to the way we insure passengers, pilots and aircraft. Changes to the way we provide this segment of the aviation industry access to capital markets. Changes to the communications, navigation and surveillance systems we use for doing all this. Changes to the way yield is predicted and managed. Changes to the way we signal our interest and have our demand aggregated. Even changes to the participants themselves as they buy and sell and take over and merge and list and go private. These are heady times.

Four, much of it is about IT, yes Information Technology. Air taxis, as a concept, will serve to bring aviation into the digital world. [An aside: Have you ever been tempted to look over the shoulder of an airline assistant while your booking is being checked or amended? It is incredibly saddening to watch the hybrid greek gobbledygook double-dutch they enter into the green screens, and the machiavellian sequences of meaningless keystrokes they enter as punctuation and even screen navigation]

Five, have you ever met a child who wanted to be a lawyer? A pilot? I rest my case.

Another aside. I was sitting on the porch of the hotel in my wicker rocking chair watching the sunset over the bay, and the table next to me was taken by a set of raucous holidaymakers obviously enjoying themselves. They consisted of three generations of one family. And they were talking about how things had stayed constant at the hotel while much around it had changed. And in this nostalgic vein, someone asked the paterfamilias how things were in comparison to how he expected things to be, forty years after his children were born.

The first thing he said was that he really expected to see flying cars by the time the 21st century came along, as in the Jetsons, that the absence of flying cars was the single biggest disappointment he had had.

So why do I think there are commonalities between the World Wide Web and the air taxi business?

  • 1. The infrastructure is largely there as a result of people providing for the public good, even if defence and aerospace and academia helped make it happen.
  • 2. The operating model was that everything happened at the heart of the network, with hubs and spokes and satellites as needed.
  • 3. The people who made iteration 1 happen were infected with a sense of wonder, a sense of adventure.
  • 4. Access to the first iteration was privileged.
  • 5. All control processes were built on a very Taylorist Assembly line basis.
  • 6. It was all very capital-intensive.
  • 7. It needed a lot of collaborative cobbled-together standards and agreements to make it work.
  • 8. The whole space was surrounded by regulatory and labour implications.
  • 9. And as with the Web, the incumbents under attack were conspicuous in their absence, they had other things to worry about, a classic Innovator’s Dilemma a la Christensen in the making.

Sure, there are material differences.

  • 1. Safety and security have life and death consequences in this space.
  • 2. The regulators are more open to the changes required, and even broadly supportive.
  • 3. Unlike the incumbent telcos ten years ago, incumbent airlines are largely losing money hand over fist.
  • 4. The incumbent does not think he owns the infrastructure.
  • 5. We have all learnt from Web 1.0

I’ll post something more detailed once I’ve had a chance to gather my thoughts and to get feedback. I’ll leave you with this thought:

Watching aviation become passenger- and craft-centric, seeing the implications for communications, navigation and surveillance, understanding the nature of software and hardware and communications innovations that will happen, extending all this to new relationships and conversations and transactions, putting all this together is really exciting. It’s a market crying out for Web 2.0 models and processes. And even dreaming about how customers can co-create when you give them access to these tools is uplifting.

And this time around, we have the chance to get identity and authentication and permissioning and real-time intention and attention aggregation right. Because this time we have the learning of the past, and a compelling incentive. Getting it wrong kills people.

More later.

7 thoughts on “Flight School Air: Some early thoughts”

  1. Another big difference is : the Web (as far as I know) doesn’t contribute to climate change -planes do.
    In a way, the Web could (already does) contribute to diminishing air traffic; which is (going to be) eventually necessary (greenhouse gas emissions, peak oil, etc.).Isn’t it?

  2. I think the zip car or Zippy (?) car rental model needs to be tweaked for this….social networking meets 2.0 CRM and 2.0 ERP all at the same time….Steve Epstein

  3. Agree with both comments.

    Sure the Web will reduce the need for contractual air travel, but relational and conversational travel must continue. We have to manage our emissions, perhaps over time do away with them altogether for transportation-related aspects. But emissions we will have and we will continue to have them.

    If emissions become a gating factor for air taxis, then that is the problem to solve. Not banning air taxis.

    I also think markets find better and better ways to solve problems when there is an expectation of volume, of liquidity.

    Steve, thanks for the Zippy model reference, I will look into it.

  4. It’s been an interesting area starting a few years ago with the design of business taxi jets sporting motors that were field replacable units. At the time the cost estimate as $760K and now the plane is delivered at a cost of about $1.5M but still cheap in comparison to existing choices.

    A collegue of mine from the software days, Rick Adam, moved into this area and is one of the CEOs presenting at the event. I wanted to go but had to miss it. If you talk with Rick tell him I said hello!

  5. I have a small number of strongly-held political beliefs, and one is that tax should be levied on aviation fuel on the same basis that it is for railway fuel. At the moment we have the ridiculous situation where an economy-class flight nearly always costs less than the equivalent railway journey.

    Creating a level playing field would increase the amount of revenue available to the railway industry to create the infrastructure necessary to make the service more useful in the sort of contexts you are talking about. At the moment they are hamstrung by paying an unhypothecated tax that cannot for populist political reasons be invested in railway infrastructure.

    This applies in the US as well as the UK. Most car journeys (or air taxi journeys for that matter) use well-worn routes. It is only the last mile that needs to be disaggregated.

  6. Sounds reasonable to me. But it is more than first-mile last-mile, information processes for communications, navigation and surveillance has to move from hub-and-spoke to person- and aircraft-centric, with P2P models as appropriate.

Let me know what you think

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