Over the months, starting with this article, I have chronicled the ambitions and operations of the most highly publicized of the new air taxi companies, DayJet. Late last year, it began service in Florida and rapidly expanded to nearby southeastern states. This past May, it laid off some pilots and scaled back flights, saying that the worldwide credit freeze kept it from getting the working capital it needed to expand its network. Two months later, in July, it was expanding again, taking passengers to more than 60 cities. (General air-taxi background here and more broadly here.)
Yesterday, DayJet announced that it was flat-out suspending operations, grounding all but one of its Eclipse EA-500 jets and laying off virtually its employees.
The stated reason was the intensifying credit crisis. As the founder and CEO Ed Iacobucci put it in the company's press release:
"Twelve months ago our team launched a new regional transportation model. During the past year, we have demonstrated, beyond a reasonable doubt, that customers will sign-up, purchase, and become frequent users of this new service - the DayJet 'Per-Seat, On-Demand' model works. It is unfortunate that these developments have come at the same time our nation has fallen into the most serious capital crisis of our lifetime. Regrettably, without access to growth capital, we have no choice but to discontinue operations."
To me that is plausible as far as it goes. My posting today, hammered out during momentary access to The Internets, is explicitly a "to be continued" starter entry, because there are so many rich themes worth further exploration. I am already receiving leads about and will pursue them soon.
- The intimate connection between DayJet's fortunes and those of Eclipse Aviation, which are in their own intensifying snarl;
- The simultaneous spread and success of the small-air taxi business in general (eg this), while its most visible champion has been struggling;
- What conclusions should be drawn from one obvious contrast between DayJet and some other air taxi companies still expanding operations. The latter, of which SATSair is best known, mainly use cheaper, slower, propeller-driven Cirrus airplanes that require only one pilot. DayJet has flown Eclipses, which are faster and more comfortable and offer the perceived safety of a two-pilot crew, but are correspondingly much more expensive to buy and operate. Is this a permanent market condition for air taxis -- propeller planes are the sweet spot economically, while jets are not? I don't know: I am saying the question is interesting.
- This is related to a question of even greater personal interest to me. Nearly ten years ago, I began reporting the emergence of two aircraft companies with radical new visions of how small aircraft would shape the future of air travel. One of them, Cirrus Design, has gone on to unquestioned market success, producing the world's best-selling single-engine piston plane for many years in a row. Eclipse is ... having its problems. Ten years ago, the industry's best seers, at least the ones I talked with, were not so certain and clear-minded about these differential paths. ("It's always hard to make predictions, especially about the future.") Sorting out what pushed the two companies in such different directions will be interesting too. Eg: Did Eclipse try to make too many technological leaps all at once? Was it a difference in the nature of management and corporate culture? Was the size of Eclipse's bet -- in capital requirements and unit airplane costs -- so large that its margin for error was reduced? Etc.
That's it for now. Sorry for DayJet. There is much to examine, explain, and learn from here.