Raburn's biggest start-up competitor is Adam Aircraft Industries, a company based in Evergreen, Colo., run by a former high-tech executive and funded by the Hunt family in Texas and Goldman Sachs. Adam got help in its aircraft design from Burt Rutan, who this year won the X Prize with his successful flights into space and back on his aircraft, SpaceShipOne. Adam is expected to gain FAA approval by the end of the year to fly its first aircraft, a uniquely designed twin turboprop aircraft, with a propeller on each side of the fuselage. Its first microjet is expected to be approved by the end of 2005.
Adam has already racked up $480 million in orders for both models, including 75 orders from Pogo Jet, an air taxi started by Donald Burr, former chief executive of low-fare airline People Express and former American Airlines chairman Robert Crandall, two former adversaries in the commercial airline business. The service, according to Pogo, is expected to launch in early 2006.
Adam Aircraft's A500 jet. The firm's first microjet is expected to be approved within a year.
(Courtesy Of Adam Aircraft Industries)
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Pogo, which itself plans to raise $40 million in funding this year, will focus on the East Coast and provide service within 500 miles of New York City. The target passenger will be lawyers, entrepreneurs, accountants and salespeople making at least $150,000 a year who need to make day trips to visit customers.
"The best analogy is this is a low-cost carrier model applied to corporate aviation," said Cameron Burr, executive vice president and founder. "We will not be competing with airlines."
Burr said he envisions customers will be able to simply type in their Zip codes and where they want to go into the company's Web site. The company would then search to see if other customers are looking for the same service around the same time to fill the four-seat jets, which are also equipped with a restroom.
Burr said 19 million passengers took a trip within 500 miles from New York last year, including 2 million who likely paid last-minute full-price fares of $700 one way.
The trip would likely cost about $6,000 roundtrip to hire an entire Pogo jet for four people, flying out of a smaller airport where security is less time consuming. "You don't have to get there two hours in advance and there's no hotel bills and no getting up at 4 a.m. for the 6:30 a.m. flight," Burr said. "This is for people who put a high value on their time."
Microjets have gained the support of government officials who are struggling to find new ways to ease congestion at the nation's largest airline hubs. This year, U.S. airports surpassed travel levels not seen since the record congestion before the terrorist attacks in 2001. Air traffic is expected to continue to grow 14 percent by 2010, fueled by low airline fares. Dulles International Airport was plagued by delays this past summer, as air traffic there surged with new service from Independence Air. The country has 3,400 usable airports for the small jets, but FAA statistics show most travelers fly out of only a few dozen major hubs.
NASA, which has studied ways to encourage the use of smaller airports to relieve congestion at major hubs, said microjets could spur more travelers to consider alternatives to commercial aviation, especially for routes under 500 miles.
But critics say few airline passengers will switch from commercial airlines to microjets. "This is a cute little fantasy," said Richard Aboulafia, aviation analyst at Teal Group. Aboulafia disputes the assumption that a lower tier of wealthy people who cannot afford existing corporate jets will be drawn to microjet air taxis. But he does believe the planes will find a small market.
"People either need a real business jet starting at around $4 million or they are hobbyists, who own part shares of a $180,000 Skyhawk. The stuff in the middle is quite modest," he said.
According to the microjet start-up companies, most planes on order come from wealthy pilots who plan to fly the plane for their own use. The manufacturers said they aren't sure whether the bulk of their customers five to 10 years from now will be individual pilots, corporations, cargo and delivery companies, or air taxis.
"Seeing the market is one thing -- predicting precisely when the market happens is another thing," said Raburn, chief executive of Eclipse Aviation.
