Linear Air leads US air taxi revolution

Corporate Jet Investor Staff
By Corporate Jet Investor Staff February 6, 2015 17:25

Linear Air leads US air taxi revolution

William Herp has spent the morning shovelling snow. Ever since the winter storm innocuously known as Juno laid a thick white blanket over most of the north-east US, many Americans – like Herp – have been forced to change travel plans and or just stay inside altogether.

It is against this cold backdrop that you can see an appeal in the air taxi model used by Linear Air, where Herp has served as CEO since 2004. Business aircraft are not necessarily any more equipped at taking off or landing in the snow than commercial aircraft, but the fact that they are able to use smaller airports – around 5,000 in the US, according to the National Business Aviation Association – creates an opportunity for scheduling short-notice recovery flights for stranded airline passengers (or ones who simply do not want to deal with the long delays and crowded airport terminals).

When Herp launched Linear Air his plan was to build a fleet of Eclipse light jets: he convinced high-net-worth-individuals to buy Eclipse jets – capable of flying up to four passengers – and lease them back to Linear Air, which then manages the aircraft and charters them to third-party passengers for around $6,000 per flight.

ALSO READ: Flying on an Eclipse private jet with Iron Maiden’s Bruce Dickinson

Aside from charter, Linear Air also provides an air taxi service using a fleet of Cirrus piston aircraft. The aircraft are managed by a small network of Part 135 operators rather than by Linear Air itself, but the company takes care of marketing, sales and customer service, and allows its customers to book flights either by contacting Linear Air directly or through online booking platforms such as Kayak or Hipmunk for around $2,500 per flight.

Flying taxi cabs

While the FAA tends to group air taxi and private charter together, Herp see them as two very different business models. Herp says air taxi is a method for flying passengers domestically from A to B using small, technologically advanced aircraft. Like with private jet charter, the passenger rents the aircraft rather than a seat, but the flight is priced much lower than a charter flight. The air taxi model optimises smaller, community airports and targets passengers who need to travel on routes that are not so well served by commercial airlines.

“We work with operators in Boston, New York, Philadelphia, Connecticut,” says Herp. “Our customers live and work around these cities, but because they have so many options, we are not necessarily the best between these cities. Instead, we will fly from New York to secondary or tertiary cities that are not that easy to get to.”

“We can fly from White Plains in New York to Ithaca in 1 hour 15 minutes,” he says. “That would take you five hours to drive, or if you were flying commercially you would need to make a connecting flight at Philadelphia.”

“The price is almost the same; it’s about $10 more,” he adds.

Air taxi vs charter

Where as many of Linear Air closest competitors were born from a similar idea, Herp says most of them have now moved into what he describes as “traditional charter,” acquiring bigger, more expensive aircraft (like Jetsuite), or exploring a model that is closer to a regional airline (like Surf Air).

Linear Air, instead, sees real potential for air taxi growth. He says the air taxi market is three times as large as the charter market – based on available aircraft – and admits that the company can no longer see much benefit in operating Eclipse jets.

“It is no longer strategic to our business, but there are some tactical reasons for keeping the aircraft. Optimistically, I could see us being out of the charter business this year,” he says.

The rebranded, re-launched and reinvigorated Eclipse Aerospace is starting to ramp-up its aircraft deliveries, Herp says the company’s business model is still troubling for owners and operators.

“How many companies are there that have only product?” he says. “The aircraft is terrific, but it should be part of a product line rather than a company itself; it is hard to get people to support it and trust it.”

Plans for growth

Now that Linear Air has built the necessary infrastructure for a healthy air taxi model, it will look to ramp up its marketing activities – both online and offline – to promote the benefits of using an air taxi.

“What we lack is the ability to proactively tell people that air taxi is a great option and they can find us if they search online,” says Herp.

In particular, the company wants to advertise its partnership with mainstream booking platforms. In a week-long period, Linear Air saw 118,000 online searches for city-pairs that its Cirrus aircraft can fly between. Herp admits the opportunity for conversion is very small – this figure translates to around 1,500 referrals to the Linear Air website – but the real potential is in repeat purchases from new customers.

“Our customers book an average of eight trips per year,” says Herp. “A lot of people will see us on Kayak and sign up to our e-mail; we cultivate a relationship over time.”

Whatever happens, this year should be an interesting one for Linear Air. Last year, the company flew 320 air taxi flights and arranged a similar number of private jet charters. This year, Herp expects to triple the number of air taxis flights, while keeping charters flat.

“We are talking about creating a million dollar stream for the marketplace,” says Herp. “There are 1,000 operators that have the ability for air taxi; only 100 of those are Cirrus operators, so we are also looking at Bonanza, Piper, even Cessna aircraft.”

Corporate Jet Investor Staff
By Corporate Jet Investor Staff February 6, 2015 17:25

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