A South Florida company plans to launch an air-taxi service to fly customers on small jets between secondary cities in regional markets.
Piloting the Delray Beach-based DayJet is Edward Iacobucci, best known for cofounding and leading Fort Lauderdale software company Citrix Systems before abruptly quitting in 2000. He expects DayJet will begin flying by the summer of next year.
If the idea for a taxi service in the sky sounds familiar, it is. Three years ago, a Hollywood company unveiled plans for a nationwide service with 1,000 small jets made by the same manufacturer that will build DayJet's aircraft. But that business never got off the ground.
Iacobucci, 51, hatched the idea for DayJet around the same time and has spent the last three years ironing out the kinks associated with air travel to cities that lack major airports.
''DayJet is going to set the standard for a new class of transportation that will result in significant productivity and quality-of-life improvements for people living in secondary markets,'' Iacobucci said.
Options for people traveling between secondary cities are less than desirable, Iacobucci noted. Flying commercial often means catching a connecting flight and can be expensive. Charter flights are even more costly. And driving is time consuming.
While DayJet has yet to hammer out the costs to fly, it estimates it will charge anywhere from a 25 percent to 75 percent premium to a full-fare coach ticket. A customer with a flexible schedule would pay less than someone with a more rigid schedule.
DayJet's business model revolves around amassing a fleet of inexpensive jets and tapping technology to find the most cost-effective ways of flying passengers between cities, Iacobucci explained.
''The core decision that makes or breaks this business is how you schedule these airplanes,'' Iacobucci said. Charter services historically have manually matched passengers with flights, a method Iacobucci dismissed as impractical.
So Iacobucci hired a team of scientists, mathematicians, demographers, software engineers and flight-operation specialists to develop a model for defining regional travel behavior patterns. That model will allow DayJet to determine the best travel methods, he added.
''What Ed has done that appears to be unique is he's gone a lot further in addressing and resolving operating issues,'' said Gerald Bernstein, an aviation analyst with the Velocity Group in San Francisco who is familiar with DayJet's plans. ''As a result, he should be able to operate at a lower cost than if he were doing things manually'' or in comparison to what competitors are doing.
DayJet passengers won't have to catch a connecting flight, though one stop may be required on a flight leg.
''The key is not finding passengers that are traveling to your destination; it's other passengers heading in the same direction,'' said John W. Staten, DayJet's chief financial officer.
DayJet needs just 1.3 passengers per flight to break even, Iacobucci insisted.
Why so low?
DayJet will operate a fleet of Eclipse 500 aircraft, light-weight jets that will cost about $1.2 million each -- at least a quarter of the cost of the least expensive charter airplanes, he said. Each jet will seat three passengers and two pilots.
DayJet will have 300 aircraft and generate revenue topping $500 million in its first couple of years of operation, he said.
Manufacturer Eclipse Aviation of Albuquerque, N.M., is now testing the jet. It anticipates obtaining Federal Aviation Administration certification next March.
Dottie Hall, Eclipse's vice president of marketing, credited DayJet with validating the market for a ''per-seat, on-demand'' jet service.
''They are the first company that has truly understood and embraced how complex and ambitious this business is, and they have made the investment needed in order to take advantage of the opportunity,'' she said.
DayJet has funded operations with $18 million from investors. It expects to raise an additional $15 million later this year. Separately, it's working on financing to buy the jets.
DayJet isn't the only company in the space. POGO Jet of Stratford, Conn., plans to begin flying with 100 airplanes in the Northeast next year, as well. Its management team includes the founder of People Express, a one-time low-cost airline, and former American Airlines CEO Robert Crandall.
''I think the market is big enough for many companies,'' said POGO CEO Donald Burr, the People Express founder. ''Once we prove the model is useful and profitable, I expect lots of competitors.''
Ilia Lekach, Fort Lauderdale-based Parlux Fragrances' chairman and chief executive, unsuccessfully tried to start an air-taxi service with a Hollywood company called Nimbus Group. The effort never took off, but Lekach hasn't lost his enthusiasm for the concept.
''I think it's an extremely good idea,'' he said. ''There is a tremendous need for a jet taxi.''
After 11 years helping build Citrix into South Florida's most successful home-grown technology company, Iacobucci intended to ease into retirement in 2000. But he grew restless and formed a jet-charter business, Wingedfoot Services, with his wife. That led him to create DayJet.
''I like to build things and take risks,'' Iacobucci said. ''Deep inside I'm an entrepreneur.''