Eclipse 500

Neil Gould wrote:


That depends on how correct Eclipse is about the seat/mile costs. A full
E-500 has to be cheaper to fly in than a half-full Citation.


Sure it may be cheaper. But the charter market never has been a
price-sensitive market; that is why jet charters are much more popular
than piston charters.

This is a problem that affects all operations equally. If one can reduce
their capital expenses by a significant amount, that results in a higher
net profit, and I have a hard time seeing how that is a Bad Thing.

My point is that when capital is considered, there never has been such
a thing as a "profit" anywhere in the charter industry except in the
very high-end VIP market which sells ultra-security and ultra-privacy
without regard to cost.

The reason the charter market exists currently is that owners who
already own airplanes for other reasons choose to lease them back to
Part 135 operators. The owners make a profit on the leaseback but take
a loss overall; that is OK since the airplanes can be justified on
other grounds and the leaseback is just a bonus.

In other words, no one today can go out and buy a fleet of CitationJets
and make a profit chartering them; what happens is that someone who
already owns such an airplane for other reasons chooses to earn some
incremental money on a leaseback.

The model of hundreds or thousands of Eclipse air taxis takes a
different route and assumes that a charter leaseback can instead be
profitable if the planes are bought strictly for leaseback, i.e.
profitable considering both capital and operating costs. I propose
that if iswere shown to be true then the free market will take over so
many people would get into the air taxi business such that the charter
price gets pushed down and once again the capital cost is not recovered
in the price.

In simplest form, every pilot would love to own an Eclipse if he could
pay its ownership costs in full via a charter operation, no less make
money on the deal. This would be so good a deal that the free market
will ensure that it is not possible.