Friday, April 15, 2011

Per-Seat, On-Demand (PSOD) Air Charter is Here to Stay

Per-seat, on-demand (PSOD) - an air charter acronym and new business model coined by the now-defunct DayJet air taxi company - has certainly taken its share of lumps but the concept is seemingly here to stay. The premise is a simple one. On any given private jet flight, an air charter operator sells a single seat on a as opposed to the entire airplane. The operator derives more business while the (presumably new) customer gets a seat on a private jet for a price similar to that of a full-fare airline coach ticket. So far, the PSOD concept and business model has proven to be as elusive as the quest for the Holy Grail. Besides DayJet, the aviation graveyard is littered with the remains of numerous other companies such as POGO, SATSair, FlyMiwok, etc. who tried but ultimately failed in refining the PSOD idea.
(For the right price, who wouldn't want this Gulfstream seat?)
So why did DayJet & Co. fail at selling charter seats? And, probably more importantly, why are others companies still trying to get blood from the same turnip? Upon closer inspection, DayJet used the Internet to allow customers to propose when/where wanted to go; and, with the help of proprietary scheduling software (now part of DayJet Technologies), this data was aggregated - the end result being an air taxi flight with multiple disparate passengers. The Department of Transportation (DOT) has used the term "opaque aggregation" as another way of describing the PSOD concept. Single travelers propose their travel preferences but they can not see the preferences of other travelers. If they did, that might be interpreted as a scheduled flight - a huge no-no in the regulated world of air charter. DayJet's ultimate downfall may have been the result of the mystery surrounding the new booking process. Also, in the context of a deteriorating economy, DayJet was targeting an entirely new market segment - one that puts a premium on customer education.

Of course, where there is a lot of money to be made (and such a desirably demographic), someone was destined to build a better mousetrap. Enter CoGoJets. (In case anyone is wondering, "Co" comes from "cooperate" and "Go" refers to the movement of people on "Jets." Cute huh?) The company purports to be a "member-based, social networking website designed for you to share private jet flights on a per-seat, pro rata basis." CoGoJets members share flights proposed by other members or, alternatively, they propose their own flights. Once mutually agreeable terms are accepted, the flight is booked and the shared flight takes place. While very similar to the DayJet business model, CoGoJets appears to have fine-tuned the PSOD concept; and, unlike DayJet, CoGoJets seems to have taken a more "bite-sized" approach. (Read: Much less of a capital outlay.) While only time will tell if CoGoJets succeeds, their membership is affordable, their service is straight-forward and these folks are worth a closer look.

Another per-seat company worth noting is Greenjets. Like CoGoJets, Greenjets offers the ability to share a flight with other members, thus affording each member a private jet flying at the lowest possible cost. The primary difference with Greenjets seems to be their emphasis on protecting the environment by flying a reduced number of jets. (OK, this seems to be a bit of a stretch but Greenjets certainly is not the only company capitalizing on the whole green movement.) In any event, Greenjets has generated an enormous amount of buzz and related press coverage since they launched their service. For anyone interested in taking a closed look at the PSOD model, Greenjets should definitely be added to the list.

DayJet certainly did not invent the idea of sharing a seat on a private jet flight; after all, people have been sharing air charter flights and related expenses on an informal basis long before the advent of the Internet and related social networking sites. DayJet did effectively boost the whole PSOD concept and, for that, CoGoJets, Greenjets and other players like Spectrum Air, Jet Charter Pool (JCP), Social Flights, and MyJet should be thankful. Aviation analysts have noted that no single business model will ever dominate the air charter market - there should always be room for a per-seat model and any type of derivation thereof. While only time will tell for sure, the idea of per-seat, on-demand air charter seems here to stay.

No comments:

Post a Comment