Current Personal Air Travel Market
Flying point-to-point at high speeds, whether in flying cars, personal aircraft, or in private jets, has long been the dream of travelers. Avoiding crowded airports, security checks, and waits for boarding and bags is icing on the cake.
Personal air travel is limited to a small fraction of Americans that can afford private jets or have trained as pilots and bought their own 1970s era aircraft. Latent consumer demand for travel modes that reduce door-to-door travel time and have the features of personal air travel is immense.
Previous Attempts at Personal Air Travel
There was a time where it looked like everyone might become a pilot. Sales of light, 4-6 passenger aircraft were growing. A combination of increased regulation from the FAA and liability lawsuits bankrupted all the light aircraft manufacturers. Sales plummeted.
Source: Wikipedia
Instead of a 4-seat Cessna costing the same as a fully-loaded Camry, it costs ~$400,000. General aviation sections of airports look like Cuba with 50-year-old planes everywhere. Many newer planes are kit planes built at home.
Growing Air Taxi Market
Before NetJets, owning a private aircraft was like operating a small business. Pilots, hangars, and maintenance all had to be managed by owners. Flying for an extended trip meant paying pilots to sit in a hotel and wait for your return. Planes had low utilization even with leasing.
NetJets and its competitors make jet travel like Uber. Increased plane utilization means the cost and hassle to travel private declined significantly.
Changing Demand Drives New Designs
Fleet operators have grown to be the majority of demand in the light jet market. New designs, like the Embraer Phenom 300, prioritize the needs of operators. The plane has shorter take-off and landing requirements, making more airfields available. Purchase cost and operating cost are industry-leading. Embraer removed luxuries like stand-up cabins and near Mach 1 max speeds.
New operators, like Wheels Up, are pushing even further downmarket, utilizing turboprop King Air 350s. King Airs have lower top speeds and shorter ranges, but they are very competitive for shorter flights. Their cost per hour is lower, and jets spend less time at full speed on short flights, nullifying speed advantages.
To grow, these operators have to move downmarket or offer new capabilities. Before its bankruptcy, Aerion had over $10 billion in orders for its supersonic business jet. Half those orders came from the big fleet operators.
The demand exists. The hard part is building the planes.
The Future of Air Travel
There is a wide range of new technologies crawling through the development and certification process. Investment has increased after seeing potential demand from fleet operators.
Point to Point, Smaller Airports
The trend in air travel technology is more flights between smaller airports. Airlines have favored smaller aircraft and reduced purchases of the largest jets like 747 and A380. Centralizing passenger travel through hubs has costs for the passengers in time and hassle. Diseconomies of scale-like slow loading/unloading reduce the benefits of large planes. Airlines now favor planes like the 787 that offset the smaller plane size with more efficiency. Small, efficient planes make more routes economic.
New entrants are attempting to take this to the extreme. Many new small airplanes are now in development. They will have high levels of efficiency and allow passengers to fly in and out of small airports without lines or security checks, and dramatically reduce door-to-door travel time.
Celera 500L
One example is the Celera 500, designed by Otto Aviation. The fuel consumption of this 6-passenger plane is more like a car at 15-20 MPG. A light jet gets 2-3 MPG. Increased fuel efficiency means it will possibly serve any city pair in the US without refueling. Otto claims the cost per hour to be 15% of a light jet (~$350/hr vs. $2000-$3000/hr). The plane travels at 75% the speed of a Phenom 300. The upfront cost is comparable.
Source: Otto Aviation
Celera 500 can achieve these numbers through two main channels. First, it uses a more efficient, modern diesel engine. Second, the design is very aerodynamic. The plane has significantly lower drag than comparable planes.
A plane like this completely opens the air taxi market. A group of six people could fly private for a similar cost as commercial air travel.
The new design combined with scale creates a large number of savings:
-
Fuel Consumption.
Surprisingly, fuel consumption per passenger mile would be lower in a Celera 500 than in a 737. The larger the fuselage, the harder it is to achieve the same drag reduction.
-
Labor.
Gate agents, baggage handlers, flight attendants, and co-pilots reduce to self-service and a single pilot.
-
Smaller airports have lower landing fees.
-
Increased Utilization.
NetJets and other fleet operators still suffer from a large number of empty flights to reposition planes. Pilots are away from home for long periods. Increased flight rates reduce empty legs and allow pilots to spend more time at home.
There has been some criticism of the Celera 500's ambitious claims. To achieve its target fuel consumption, it must reach ~50,000 ft. The RED AO3 engine may have to be modified to provide enough horsepower in such thin air. Consistently achieving laminar flow can be difficult due to dirt and grime getting on the plane, possibly hurting fuel consumption. The design will still improve over the status quo even if it doesn't meet all its goals.
Otto Aviation has flown one prototype that can only reach 20,000 feet. It needs to raise hundreds of millions of dollars to certify the plane with the FAA and build manufacturing capability. Its next step is the completion of prototypes that can reach the intended 50,000 ft operating altitude. Failure risk is still very high, but every step de-risks the technology for future attempts.
Electric Short Hop Planes
Battery electric aircraft have advantages in operating expense but a disadvantage in range. The operating cost advantages come from the efficiency and simplicity of electric power trains. The shortcomings in the range are from battery energy density being significantly lower than jet fuel energy density.
Modern air travel with large planes and sprawling airports leaves a gap in capability. City pairs that are 100-500 miles apart often have similar door-to-door travel times by car as by plane. 10-20 passenger electric planes are a potential answer for this market.
The reduced maintenance and fuel costs make a 20 passenger plane cost-effective, while the small size means they can fly into small, general aviation airports. This format brings back the old days of flying, where you can arrive 20 minutes before departure. The drive to the airport is a 15-minute casual drive instead of a carefully planned operation. Manufacturer Heart Aerospace claims their plane, the ES-19, will have operating costs 50%-70% lower than comparable models. The range will increase as batteries improve. These aircraft can afford the best batteries. Aircraft are so expensive that batteries will only make up 2% of the ES-19's purchase cost.
Many companies are working on designs to fill this category, and interest from airlines is high. These aircraft could dramatically increase the market size for flying. Increased market size will create new economies of scale in manufacturing, reducing the cost. This segment has a high probability of success.
Vertical Take-Off and Landing (VTOL) Air Taxis
Flying cars! There are maybe a dozen companies working on some version of this. They are much safer, cheaper, and electric versions of helicopters. The range is roughly 50 miles because of the size of the vehicle and the need for VTOL but can increase as batteries improve. Noise problems and a lack of landing space in urban areas could limit the utility of these vehicles in population centers.
These aircraft have great potential at being more versatile versions of the 20-seat electric airplanes, allowing more local point-to-point travel and serving as a feeder system for large and general aviation airports.
Supersonic Travel
Supersonic or faster travel is another technology that is becoming possible. One example is Boom, a company building a 20 person supersonic business jet. Supersonic jets will be limited to high density, over ocean routes unless laws change. Prices will be expensive at business and first-class prices. Supersonic jets can pair with personalized travel options to reduce door-to-door travel time even across world-scale distances, solving the cab ride to Heathrow problem.
Didn't You Recently Write About Tunnels?
New aircraft technologies are complementary to tunnels. At first, tunnel systems will be local. In urban areas where landing space for VTOL taxis may not be available, they will be an effective and cheaper way to link to airports, small and large. Where population density cannot justify tunnels, space for VTOL taxis will be available.
Once tunnels start linking longer distance city pairs, possibly with technologies like HyperLoop, they will compete with 737s, not smaller aircraft. Tunnels and stations will be clustered on the densest routes like under interstates and linking to airports. VTOLs and 20-seat electric planes can connect hinterlands to the system. Removing the need for airplanes to connect hubs would increase airport capacity.
Over longer distances, supersonic planes would be faster, while HyperLoop would be cheaper. Ideally, many technologies will fill niches across a wide range of distances, prices, and route densities.
Impact on Traditional Airlines
Electric planes increase airline market size by competing with cars on short routes. They can also funnel passengers into larger airports more conveniently. Flight options from a general aviation airport near your house would include a wide range of non-stop regional destinations in addition to regular flights to a regional hub. Larger aircraft would constantly fly between the regional hubs, and you would take another small aircraft to arrive close to your final destination. You can expect airlines to fight hard to reduce the need for security re-screening when boarding large planes (since small planes can avoid TSA). The cost is the same or less for less hassle and faster travel times. Airlines want this future.
The risk to airlines is that air taxi fleet operators like NetJets keep expanding downmarket and eat the best customers. If technology similar to a Celera 500 exists, there will be no more first-class and business class tickets. More time-sensitive customers could afford to splurge for point-to-point travel.
If there were no electric planes, the airlines would get eviscerated by deteriorating margins and the need to cut routes, further lowering revenue potential. Electric planes can increase market size enough to make up for lost long-distance, premium customers. Traveling on a 20-seat electric plane to a city 200 miles away will be a similar experience to flying with an air taxi service, meaning airlines will be competitive on these routes with any passenger.
For long-distance service, airlines can shift to RyanAir or Frontier-like service. No frills, pay for every bag, drink, and inch of legroom. The experience would still be better than today because of more regional flight options and journeys starting and ending at smaller airports. Larger planes will slowly go electric, improving their hub-to-hub cost structure.
Obstacles
Reduction in door-to-door travel time is king. Public policy may not keep this in mind.
Airport Capacity
There is much more space in the air than on the airport tarmac. Our current hub and spoke system means some hub airports operate near runway capacity already. There isn't the capacity for an onslaught of small aircraft.
If electric short-haul flights increase the demand for long-haul flights by lowering travel times, cost, and hassle, the number of hubs can increase. Busy airports can decrease flights of some planes. The trend for more routes and more direct flights has led airlines to invest in large numbers of 70-100 seat regional jets. Higher demand and a system of regional hubs mean many of these can be removed from use at the busiest airports and replaced with larger aircraft like 737s. Travel through super hubs can also be reduced as more customers justify flights like Kansas City to Tucson that wouldn't exist otherwise. The electric, short-range planes feed demand to justify bigger hub-to-hub planes and spread utilization of airport tarmac.
Most of the other constraints are regulatory and public policy related. America has antiquated air traffic control systems that limit flights rates and safe aircraft spacing. The government has been slow to implement new technology, even though it would reduce travel times, improve safety, and reduce fuel consumption.
Risk Tolerance
Increases in flight rates could still run up against capacity constraints. At some point, regulators will need to consider that driving is dramatically more dangerous than flying. Taking some risks in moving to more single pilots, reducing aircraft landing and take-off spacing, liability reform, and making certification of new planes easier would save human lives. The FAA and other parts of the government have shown that they are rarely capable of making these tradeoffs.
Fly to the Future
Imagine living near a small town in Western Kansas. You want to go on a weekend trip to a small town in Western Colorado. Instead of driving 10 hours, you get picked up from your house by VTOL taxi and fly to the Hays-Munjor Regional Airport with HyperLoop access under I-70. You ride the HyperLoop until Denver International Airport, where you take a small electric plane to Telluride, CO. Your travel time might be under 2 hours at a cost less than driving. If you want to splurge, you could fly directly there on a long-range air taxi.
Fast and cheap transportation that spans our world has huge implications for where we live and work. Improved movement of people unlocks large amounts of economic growth. The combination of these technologies will radically increase the demand for air travel and allow people to live and work in places they wouldn't consider before. I would say it is inevitable, except our current regulatory regime significantly lowers the probability that these technologies come to fruition. Even if they do survive, they will arrive decades later than they could have. You'll have to set the RemindMe! on this post for 2030.
Air Travel Doesn't Have to be Terrible
2021 August 19 Twitter Substack See all postsThe technology exists to save us, if we let it.
Current Personal Air Travel Market
Flying point-to-point at high speeds, whether in flying cars, personal aircraft, or in private jets, has long been the dream of travelers. Avoiding crowded airports, security checks, and waits for boarding and bags is icing on the cake.
Personal air travel is limited to a small fraction of Americans that can afford private jets or have trained as pilots and bought their own 1970s era aircraft. Latent consumer demand for travel modes that reduce door-to-door travel time and have the features of personal air travel is immense.
Previous Attempts at Personal Air Travel
There was a time where it looked like everyone might become a pilot. Sales of light, 4-6 passenger aircraft were growing. A combination of increased regulation from the FAA and liability lawsuits bankrupted all the light aircraft manufacturers. Sales plummeted.
Source: Wikipedia
Instead of a 4-seat Cessna costing the same as a fully-loaded Camry, it costs ~$400,000. General aviation sections of airports look like Cuba with 50-year-old planes everywhere. Many newer planes are kit planes built at home.
Growing Air Taxi Market
Before NetJets, owning a private aircraft was like operating a small business. Pilots, hangars, and maintenance all had to be managed by owners. Flying for an extended trip meant paying pilots to sit in a hotel and wait for your return. Planes had low utilization even with leasing.
NetJets and its competitors make jet travel like Uber. Increased plane utilization means the cost and hassle to travel private declined significantly.
Changing Demand Drives New Designs
Fleet operators have grown to be the majority of demand in the light jet market. New designs, like the Embraer Phenom 300, prioritize the needs of operators. The plane has shorter take-off and landing requirements, making more airfields available. Purchase cost and operating cost are industry-leading. Embraer removed luxuries like stand-up cabins and near Mach 1 max speeds.
New operators, like Wheels Up, are pushing even further downmarket, utilizing turboprop King Air 350s. King Airs have lower top speeds and shorter ranges, but they are very competitive for shorter flights. Their cost per hour is lower, and jets spend less time at full speed on short flights, nullifying speed advantages.
To grow, these operators have to move downmarket or offer new capabilities. Before its bankruptcy, Aerion had over $10 billion in orders for its supersonic business jet. Half those orders came from the big fleet operators.
The demand exists. The hard part is building the planes.
The Future of Air Travel
There is a wide range of new technologies crawling through the development and certification process. Investment has increased after seeing potential demand from fleet operators.
Point to Point, Smaller Airports
The trend in air travel technology is more flights between smaller airports. Airlines have favored smaller aircraft and reduced purchases of the largest jets like 747 and A380. Centralizing passenger travel through hubs has costs for the passengers in time and hassle. Diseconomies of scale-like slow loading/unloading reduce the benefits of large planes. Airlines now favor planes like the 787 that offset the smaller plane size with more efficiency. Small, efficient planes make more routes economic.
New entrants are attempting to take this to the extreme. Many new small airplanes are now in development. They will have high levels of efficiency and allow passengers to fly in and out of small airports without lines or security checks, and dramatically reduce door-to-door travel time.
Celera 500L
One example is the Celera 500, designed by Otto Aviation. The fuel consumption of this 6-passenger plane is more like a car at 15-20 MPG. A light jet gets 2-3 MPG. Increased fuel efficiency means it will possibly serve any city pair in the US without refueling. Otto claims the cost per hour to be 15% of a light jet (~$350/hr vs. $2000-$3000/hr). The plane travels at 75% the speed of a Phenom 300. The upfront cost is comparable.
Celera 500 can achieve these numbers through two main channels. First, it uses a more efficient, modern diesel engine. Second, the design is very aerodynamic. The plane has significantly lower drag than comparable planes.
A plane like this completely opens the air taxi market. A group of six people could fly private for a similar cost as commercial air travel.
The new design combined with scale creates a large number of savings:
Fuel Consumption.
Surprisingly, fuel consumption per passenger mile would be lower in a Celera 500 than in a 737. The larger the fuselage, the harder it is to achieve the same drag reduction.
Labor.
Gate agents, baggage handlers, flight attendants, and co-pilots reduce to self-service and a single pilot.
Smaller airports have lower landing fees.
Increased Utilization.
NetJets and other fleet operators still suffer from a large number of empty flights to reposition planes. Pilots are away from home for long periods. Increased flight rates reduce empty legs and allow pilots to spend more time at home.
There has been some criticism of the Celera 500's ambitious claims. To achieve its target fuel consumption, it must reach ~50,000 ft. The RED AO3 engine may have to be modified to provide enough horsepower in such thin air. Consistently achieving laminar flow can be difficult due to dirt and grime getting on the plane, possibly hurting fuel consumption. The design will still improve over the status quo even if it doesn't meet all its goals.
Otto Aviation has flown one prototype that can only reach 20,000 feet. It needs to raise hundreds of millions of dollars to certify the plane with the FAA and build manufacturing capability. Its next step is the completion of prototypes that can reach the intended 50,000 ft operating altitude. Failure risk is still very high, but every step de-risks the technology for future attempts.
Electric Short Hop Planes
Battery electric aircraft have advantages in operating expense but a disadvantage in range. The operating cost advantages come from the efficiency and simplicity of electric power trains. The shortcomings in the range are from battery energy density being significantly lower than jet fuel energy density.
Modern air travel with large planes and sprawling airports leaves a gap in capability. City pairs that are 100-500 miles apart often have similar door-to-door travel times by car as by plane. 10-20 passenger electric planes are a potential answer for this market.
The reduced maintenance and fuel costs make a 20 passenger plane cost-effective, while the small size means they can fly into small, general aviation airports. This format brings back the old days of flying, where you can arrive 20 minutes before departure. The drive to the airport is a 15-minute casual drive instead of a carefully planned operation. Manufacturer Heart Aerospace claims their plane, the ES-19, will have operating costs 50%-70% lower than comparable models. The range will increase as batteries improve. These aircraft can afford the best batteries. Aircraft are so expensive that batteries will only make up 2% of the ES-19's purchase cost.
Many companies are working on designs to fill this category, and interest from airlines is high. These aircraft could dramatically increase the market size for flying. Increased market size will create new economies of scale in manufacturing, reducing the cost. This segment has a high probability of success.
Vertical Take-Off and Landing (VTOL) Air Taxis
Flying cars! There are maybe a dozen companies working on some version of this. They are much safer, cheaper, and electric versions of helicopters. The range is roughly 50 miles because of the size of the vehicle and the need for VTOL but can increase as batteries improve. Noise problems and a lack of landing space in urban areas could limit the utility of these vehicles in population centers.
These aircraft have great potential at being more versatile versions of the 20-seat electric airplanes, allowing more local point-to-point travel and serving as a feeder system for large and general aviation airports.
Supersonic Travel
Supersonic or faster travel is another technology that is becoming possible. One example is Boom, a company building a 20 person supersonic business jet. Supersonic jets will be limited to high density, over ocean routes unless laws change. Prices will be expensive at business and first-class prices. Supersonic jets can pair with personalized travel options to reduce door-to-door travel time even across world-scale distances, solving the cab ride to Heathrow problem.
Didn't You Recently Write About Tunnels?
New aircraft technologies are complementary to tunnels. At first, tunnel systems will be local. In urban areas where landing space for VTOL taxis may not be available, they will be an effective and cheaper way to link to airports, small and large. Where population density cannot justify tunnels, space for VTOL taxis will be available.
Once tunnels start linking longer distance city pairs, possibly with technologies like HyperLoop, they will compete with 737s, not smaller aircraft. Tunnels and stations will be clustered on the densest routes like under interstates and linking to airports. VTOLs and 20-seat electric planes can connect hinterlands to the system. Removing the need for airplanes to connect hubs would increase airport capacity.
Over longer distances, supersonic planes would be faster, while HyperLoop would be cheaper. Ideally, many technologies will fill niches across a wide range of distances, prices, and route densities.
Impact on Traditional Airlines
Electric planes increase airline market size by competing with cars on short routes. They can also funnel passengers into larger airports more conveniently. Flight options from a general aviation airport near your house would include a wide range of non-stop regional destinations in addition to regular flights to a regional hub. Larger aircraft would constantly fly between the regional hubs, and you would take another small aircraft to arrive close to your final destination. You can expect airlines to fight hard to reduce the need for security re-screening when boarding large planes (since small planes can avoid TSA). The cost is the same or less for less hassle and faster travel times. Airlines want this future.
The risk to airlines is that air taxi fleet operators like NetJets keep expanding downmarket and eat the best customers. If technology similar to a Celera 500 exists, there will be no more first-class and business class tickets. More time-sensitive customers could afford to splurge for point-to-point travel.
If there were no electric planes, the airlines would get eviscerated by deteriorating margins and the need to cut routes, further lowering revenue potential. Electric planes can increase market size enough to make up for lost long-distance, premium customers. Traveling on a 20-seat electric plane to a city 200 miles away will be a similar experience to flying with an air taxi service, meaning airlines will be competitive on these routes with any passenger.
For long-distance service, airlines can shift to RyanAir or Frontier-like service. No frills, pay for every bag, drink, and inch of legroom. The experience would still be better than today because of more regional flight options and journeys starting and ending at smaller airports. Larger planes will slowly go electric, improving their hub-to-hub cost structure.
Obstacles
Reduction in door-to-door travel time is king. Public policy may not keep this in mind.
Airport Capacity
There is much more space in the air than on the airport tarmac. Our current hub and spoke system means some hub airports operate near runway capacity already. There isn't the capacity for an onslaught of small aircraft.
If electric short-haul flights increase the demand for long-haul flights by lowering travel times, cost, and hassle, the number of hubs can increase. Busy airports can decrease flights of some planes. The trend for more routes and more direct flights has led airlines to invest in large numbers of 70-100 seat regional jets. Higher demand and a system of regional hubs mean many of these can be removed from use at the busiest airports and replaced with larger aircraft like 737s. Travel through super hubs can also be reduced as more customers justify flights like Kansas City to Tucson that wouldn't exist otherwise. The electric, short-range planes feed demand to justify bigger hub-to-hub planes and spread utilization of airport tarmac.
Most of the other constraints are regulatory and public policy related. America has antiquated air traffic control systems that limit flights rates and safe aircraft spacing. The government has been slow to implement new technology, even though it would reduce travel times, improve safety, and reduce fuel consumption.
Risk Tolerance
Increases in flight rates could still run up against capacity constraints. At some point, regulators will need to consider that driving is dramatically more dangerous than flying. Taking some risks in moving to more single pilots, reducing aircraft landing and take-off spacing, liability reform, and making certification of new planes easier would save human lives. The FAA and other parts of the government have shown that they are rarely capable of making these tradeoffs.
Fly to the Future
Imagine living near a small town in Western Kansas. You want to go on a weekend trip to a small town in Western Colorado. Instead of driving 10 hours, you get picked up from your house by VTOL taxi and fly to the Hays-Munjor Regional Airport with HyperLoop access under I-70. You ride the HyperLoop until Denver International Airport, where you take a small electric plane to Telluride, CO. Your travel time might be under 2 hours at a cost less than driving. If you want to splurge, you could fly directly there on a long-range air taxi.
Fast and cheap transportation that spans our world has huge implications for where we live and work. Improved movement of people unlocks large amounts of economic growth. The combination of these technologies will radically increase the demand for air travel and allow people to live and work in places they wouldn't consider before. I would say it is inevitable, except our current regulatory regime significantly lowers the probability that these technologies come to fruition. Even if they do survive, they will arrive decades later than they could have. You'll have to set the RemindMe! on this post for 2030.