It’s time for an Uber of the skies

Airbnb changed the hotel industry. Uber changed ground transportation. So why can’t the same change happen for air travel?

Airlines are ready for disruption. With only four large airlines controlling more than 80 percent of domestic air travel, the industry is a classic oligopoly. Even the government, which is currently investigating airlines for collusion, seems to agree.

Air travelers, who complain of higher prices and fewer choices, say they’re ready for the next Uber to take flight. And now Congress is in a good position to actually encourage competition through smarter regulation. The latest Federal Aviation Administration reauthorization bill, now being drafted by lawmakers, could pave the way for a more competitive airline industry.

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“Competition is a great thing for consumers,” says ride-hailing-industry expert Harry Campbell. “American airline carriers have consistently been falling behind, compared to more robust international carriers, when it comes to price and experience.”

Campbell says applying the Uber model to aviation would improve the flying experience for everyone, even if you choose to fly on one of the four dominant carriers.

“It would further intensify the pressure on airline carriers to improve their product, lower their prices and become more efficient,” he says.

That’s already happened in the lodging sector, where Airbnb and vacation rental services such as HomeAway have kept rates competitive and forced large hotel chains to up their game by adding more services and amenities. It’s happened in ground transit, in which Uber and Lyft offer an often cheaper, more accessible alternative to taxis and limousines.

Chester Goad, a university administrator and Uber customer in Cookeville, Tenn., says he’s “excited” about having the same option for flying. What if, for example, an Uber for airlines could utilize smaller airports that are more conveniently located and offer direct flights to airports not traditionally served by large airlines?

“The bottom line for me, is if the fares were reasonable or offered conveniences not offered by other airlines, and if they were equally accessible, I’d definitely check it out,” he says. “Especially if I could avoid the hassles of a major airport.”

It’s easier said than done. Several travel start-ups have tried to follow the Uber model. Although they’re an option for business travelers, they’re still priced out of reach of most leisure travelers. For example, Rise, a private flight-sharing service in Dallas that launched this May, offers an “all-you-can-fly” option starting at $1,650 a month. It offers scheduled flights on King Air 350 eight-passenger twin-engine aircraft between Dallas, Houston, Austin and Midland, depending on demand, and has announced plans to expand domestically and fly London to Brussels in 2016.

Rise is interesting because it had to secure special approval from the Department of Transportation, which regulates air travel in the United States. More on that in a minute.

Industry experts say that in at least one sense, flight-sharing — or ride-sharing for planes — already exists. In private aviation, it’s referred to as the gray charter market. That’s where passengers pay for a flight with an aircraft operator that does not have the correct permissions to fly the trip commercially.

“This could be because the operator does not have an aircraft operator’s certificate, which is a license from the aviation authorities to operate commercially, or a gray charter could be more subtle, such as a European operator picking up an extra passenger within the States during an internal leg of an international schedule,” explains Adam Twidell, the chief executive of PrivateFly, an online marketplace for private aircraft charters.

So what would it take to make air travel as affordable, flexible and, of course, as controversial as Uber or Airbnb? How do you get from here — an industry in which only the elites can fly private and the rest of us have to contend with a consolidated industry where competition has been squeezed out — to a business in which you can fly as easily as you can drive, and for a reasonable price?

Timmy Wozniak, the chief executive of FreshJets, a site for booking discounted private jet travel, says the government can be an obstacle or an enabler.

“There has to be compromise on both sides,” he says. “Especially for concepts that involve smaller, recreational aircraft and pilots.” The smaller operators, he says, would need to step up and meet some safety requirements. But the government can also more clearly articulate what will and won’t be allowed, especially when it comes to charter operators being allowed to sell on a per-seat or per-aircraft basis.

A clearer statement “will have the biggest impact on our business and will determine truly whether the airline industry can be disrupted,” he adds.

All of which brings us to the FAA bill, which is now being drafted by the Republican-controlled Congress — Republicans who, time and again, have supported free markets and competition.

Yet the FAA, as a matter of policy, has made Uberization difficult, say industry observers. Operators say the certification process is cumbersome and favors large, well-established airlines with deep pockets — in other words, it ensures the same four carriers will continue to dominate the industry. An FAA official told me the agency is just upholding national and international laws that require commercial air transportation providers to hold a certificate and meet requirements for training and maintenance, among other things. The FAA is also working to “streamline” the certification process.

Maybe it can do more. A good start would be to rethink the current regulations on small aircraft — called “Part 135” aircraft, which are named after the section of the Code of Federal Regulations that gives them the authority to operate. Operators of these commuter aircraft should be able to fly “as frequently as they like between cities, as long as operational standards required to fly safely are met,” says Wade Eyerly, the chief executive of Beacon, a subscription-based all-you-can-fly private plane service that is launching in September with flights between Boston and New York.

Imagine being able to fly anywhere safely at a fraction of the cost of a private jet. It’s something the government can clear for takeoff now – if it wants to.

23 thoughts on “It’s time for an Uber of the skies

  1. A lot of fresh thinking in this article. I think there’s a real market for the kind of thing you’re promoting here, if someone can figure out how to do it. Obviously with Uber and airbnb, the standards for entry aren’t very rigorous – lots of people can and do get in without the kind of extensive training, testing and certification needed to be a pilot. The requirements for operating aircraft between cities need to be much more exacting for a host of reasons. But yes, I’d like to see the Congress and FAA look closely at how to improve competition and free markets in air travel – safely.

  2. “But the government can also more clearly articulate what will and won’t be allowed, especially when it comes to charter operators being allowed to sell on a per-seat or per-aircraft basis.”

    The government is QUITE clear about what is and is not allowed for per-seat fares or per-aircraft rentals. In fact, the Federal Aviation Regulations go into rather exhaustive detail about this.

    The big difference between this and Uber is that Uber has been able to muscle in to many of their markets by operating in a “damn the fines” manner, and then daring the local governments to take action. This works because the regulatory structure really isn’t meant to block a new entrant with deep pockets; it’s designed to discourage individual drivers from deciding to run their own taxi service without a license.

    The FAA doesn’t *bleep!* around; an operator that decides to try and bulldoze their way past the rules will have a mighty hammer lowered upon them, their pilots, and probably their aircraft.

    And the regulations are not some sort of airline-consolidation conspiracy; the appropriate rules go back decades.

  3. An Uber-style structure where any schmuck with a car and a driver’s license can transport passengers after a cursory background check is a non-starter.

    Private Pilots (those with the aviation equivalent of a basic Driver’s License) have a per-hour fatal accident rate of about 1 in 100,000. (Which is 82 times worse than airlines.) One fatal accident per 100,000 operating hours is totally outside the bounds of what is considered acceptable for commercial transport. (Cars have a fatality rate approx. 10x less.)

    Of course, the rates improve dramatically once you have a pilot with a Commercial license, and an aircraft rated for the commercial transport of passengers, but that’s little different from what we have already. I’m pretty sure there are already platforms (if not apps) for passengers to put a flight charter out for bid.

  4. I would be VERY interested to know more about these companies & what they offer. I now spend more than $20,000.00 a year on air travel so we are not far off at $1,600.00 – $2,000.00 a month……This would serve the existing airlines the notice it really needs but I can assure that if the private service is up to par, frequent travellers will never return to the likes of United, American or Delta!!!

  5. If you spend that much why don’t you just invest in your own airplane and either a) get your own private pilot or b) get your license yourself.

  6. actually, it is not like you can travel any date, any time, any two cities. They are selling off deadhead flights for these prices (have clients who liked the concept). It is not the same as a regular private flight.

  7. One other problem no one considers is that yes, there may be smaller airports out there, but are they really even able to HANDLE new commercial traffic? Most cannot, so not a viable option.

  8. Uber (and the like) are quite successful in high-density markets. Then they expanded to become the big players that there are today

    Think NYC, DC, or Chicago with capacity controlled airports. Do we now want to clog those skies with uber-aircraft?

    I understand that there are smaller airports outside of those cities, But once you land, you need to get from the airport to wherever. Maybe another uber car? But some of those airports don’t have car rental counters and other elements necessary for travel.

    More moving parts than just cars and empty hotel rooms.

  9. It would be nice, but if the airports are united now in keeping Uber from picking up and dropping off passengers at the airport, can you imagine the fight that they’d put up regarding the “Uber of the Air” operating out of the airport? In some respects, it’s still possible to get lower fares in the current environment (no luggage, no fear of cancellation, no need for even a cup of coffee with peanuts, etc.), but it would be nice to see a competitor of the Majors buck the trend, and provide what the airlines used to provide even 5 years ago, and not make us accept conditions that existed for Galley slaves.

  10. There are already airlines (Spirit, RyanAir, etc.) that service smaller airports. In both cases with airlines like these, you get what you pay for. If you add up the total “optional” charges for these bare bones airlines, it will cost you about the same as flying with the majors.

  11. “What if, for example, an Uber for airlines could utilize smaller
    airports that are more conveniently located and offer direct flights to
    airports not traditionally served by large airlines?”

    Isn’t that what Southwest did when they started?

    That model can only get you so far, as you can see with Southwest’s current expansion being mainly into the larger airports they used to avoid. Also, there just are not that many airports out there that are not served today that have enough passengers or enough landing slots to make it worthwhile.

  12. it already happens everywhere. Catch22 in USA is FAA wants to get involved & should stay out of peoples lives. USA seems tob e turning into the nanny state that Australia is turning into.
    On another matter, has anyone ever used now called turo, which is the Uber of private car rental. Guess used cars are very cheap in USA & if we want a 4wd in Colorado for 2 weeks, it’s much cheaper than renting from big boys. Saw a Suburban for less than $200 a week. SO it’s not less than 12 months old. Big deal.

  13. I saw a pitch on one of those Shark Tank-style business shows where the guy flat-out admitted his model relied on using brand new pilots trying to build up flight hours. It’s frightening. Imagine a large scale, nationwide operation like that traveling in inclement weather. You think a full plane of people wanting to get home for the holidays is going to take well to hearing the pilot wants to abort the trip? There’d be huge pressure on the company and pilots to fly no matter what. Just a disaster waiting to happen.

  14. Not to mention that when the FAA brings down the hammer, it would be the pilots who would bear the brunt of the punishment, probably losing their licenses en masse when the FAA subpoenaed the records of the operation.

  15. Our local airport is literally begging for someone to come in and provide commercial air service, despite two different companies trying the EAS route, and failing. An unscheduled service might make sense here.

  16. I heard or read an article about this the other day, it actually mentioned Uber in connection with using drones for private air travel. This would be amazing.

  17. No need to be scared. Any such system would have safeguards built in. You can’t compare private aircraft with the drones that would be used for a system like this. Think “driverless car” rather than “private airplane”. That is a better analogy.

  18. Agreed, and there are Charter Airlines out there that do just this. But the models I have seen have used pilots as low as private pilots to do such operation.

  19. I should mention that I am a FAA Certified Flight Instructor and Airline Transport Pilot. I also have a degree in Aviation and have volunteered in the FAASTeam.

  20. Competition is good for the ECONOMY (and that includes consumers, workers, tax payers, and everybody else including competing companies including their CEO’s). But lack of competition only benefits CEO’s compensation.
    As to “shared economy” – it is a temporary scheme to make money out of thin air. There is not much innovation in that. If taxi or hotel companies were smart they would have organized into the global taxi and hotel service long time ago. Hotel chains were close to it but they were too greedy.
    Uber like service is a second income option for those who do not have first income, or are in a failing economy. Normal taxi companies will simply sign-up into Uber and provide the same service – only better. Of course there always will be exceptions to the rule e.g. suburban taxi service is largely nonexistent in the USA – Uber will flourish there. In many cities in France there is no competitive taxi service and Uber was outlawed – this did not help anybody. Uber or not – when the service is lacking or is priced out of market – anything helps. Uber just provided communication between unemployed driving public with public needing to be driven. Uber did not do it alone – internet and cell networks did it.

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