With oil prices nearing $110 a barrel as of early March, 2008, it’s reasonable to ask which segments of the passenger air transportation industry will be hardest hit by the inevitable avgas price hikes — scheduled airlines, charter companies, or VLJ air-taxi services. Though actual numbers are impossible to calculate because of the effect of gross weight, speed, wind and a dozen or so other factors on fuel flow, the simple answer is probably this: If every carrier filled every available seat on every possible flight, the net effect of skyrocketing fuel costs would probably be about the same for all of them.

Or, to put it another way, every carrier’s energy costs would rise by roughly the same percent, forcing each to either raise passenger fares (or in the case of charter operators, hourly rates), trim costs in other areas, or operate at significantly lower profit and return on investment rates.

Sadly, unless you happen to be one of the millions of airline passengers who enjoys being able to spread yourself, your iPod, your laptop and the rest of your carry-on rubble across three seats, no passenger carrier of any kind can operate at full capacity 100 percent of the time. In fact, very few carriers operate at full capacity any of the time … flights taking off with empty seats vastly outnumber those which leave 1, 10, or 100 excess passengers behind to battle about the value of their denied boarding compensation.

Realistically, scheduled airlines will be hardest hit by increased fuel costs. Unlike charter and air taxi operators, they can’t just leave their aircraft in the hanger when there’s no business. They have to (at least in theory, though bogus flight cancellations for “technical difficulties” are hardly unknown) burn black gold from Point A to Point B regardless of whether their 737-200 is hauling 120 passengers or 12.

And, thanks to deregulation and despite the industry’s many mergers, the still massive competition in the airline industry makes implementing major fare increases difficult, particularly for those carriers teetering on the brink of bankruptcy anyway.

As Northwest Airlines CEO Doug Steenland put it “if oil remains above $100 a barrel, it will cost Northwest $1.7 billion more than it planned for” in 2008 and “will again create a difficult financial challenge for the airline.”

Lest anyone misunderstand what Steenland means by “difficult financial challenge” again, we should remember that Northwest has only been out of its last bankruptcy for less than ten months.

Where Steenland is gloomy about energy price increases, his opposite number at Delta Airlines, which is frequently cited as a potential merger partner for Northwest, is a bit bellicose.

Keynoting an FAA conference in early March, Delta Chief Executive Richard Anderson lambasted the federal government for doing little or nothing to cap fuel prices.

“We don’t have an energy policy in this country,” Anderson said. “We really don’t have any conservation measures in place … jawboning OPEC is not an energy policy.”

While it’s hard to dispute Anderson’s premise that the U.S. lacks a coherent overall energy policy, it is easy (and correct) to argue that he obviously wasn’t thinking about VLJ air-taxi service when he said we don’t “have any conservation measures” in place, at least as far as air travel goes.

Simply put, a VLJ flying at partial capacity — say two out of four seats filled — uses far less fuel per passenger mile than an airliner with 60 of 120 seats filled.

One factor is design age. Back when today’s generation of jetliners and light jets such as the Lear and the Gulfstream were incubating, fuel economy, pollution, even — to some extent noise — were not major engineering considerations. The design gods were maximum payload, speed and range. Over the decades priorities have changed and those designs — particularly in regards to engines and control surfaces have been substantially improved. Current generation 737-500s, for example, are far more fuel efficient and “green” than the 737-100s which rolled out of Boeing’s Seattle fab shop in the late 1960s.

But upgrades can’t compete with ground-up designs in areas like materials and aerodynamics. Using lightweight composites unavailable to earlier generations of jet designers, Computational Fluid Dynamics modeling and open-jet wind tunnels, VLJ engineers have created fuel-efficient, environmentally friendly aircraft that virtually ensure that their operators will suffer less from escalating fuel prices than competitors using yesterday’s aircraft for short- and mid-range point-to-point transportation.

Better still, from the POV of all us end-users, the inherently more efficient nature of VLJs should bring the cost of a fly-on-demand air-taxi trip even closer to a first- or business-class airline ticket in the future than it is today.

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It’s generally agreed that the VLJ air-taxi revolution will change the way many business and professional travelers live. But will it also change where they live? According to Chuck McLaughlan of Innosight, a team of consultants who help companies develop, manage and cope with “disruptive” technologies, the answer is “yes.”

Full deployment of VLJ air-taxi service throughout the U.S. will not only be deeply disruptive to the traditional airline business, McLaughlan says, it will also “have implications for many other industries (such as) residential housing, because economical custom air travel may change where people choose to live relative to their workplaces.”

Just think about that for a moment. Could Very Light Jets eventually provide some of the same kind of release from geographic slavery that the internet has? The iNet, after all, has enabled untold numbers of people — so-called telecommuters — to live cities, states or even countries away from their employer’s headquarters. Could VLJ air-taxis free others from the tyranny of having to reside within commuting distance of a major airport?

In other words, is Chuck McLaughlin right?

We think he is.

Consider, for example, the aforementioned telecommuters. For every one of them lucky enough to be able to spend 365 days a year sitting with their laptop on the beach at Rio, there are hundreds who must spend several days in the company’s physical office every two or four weeks. Though all these people can, in theory, live wherever they want, reality requires they either live within convenient driving distance of the office or somewhere with relatively easy access to a commercial airport.

A robust, cost-effective air-taxi industry would change that reality. It would, as Chuck McLaughlin might say, disrupt it. It would give all those people vastly greater residential options.

Then there are those thousands and thousands of corporate sales and field force executives who leave their homes for the nearest international airport at 4:30 a.m. every Monday morning and don’t return until after midnight on Friday. Once again, the realities of their careers binds them to a home located a relatively straight-freeway shot from a major hub.

A fully developed VLJ air-taxi network would change that, too. For true road warriors, actually, the effect might be even greater. The elimination of endless rush-hour commutes to a major airport and 90-minute advance check-in requirements from their work week might even allow them to spend — courtesy of a convenient air taxi flight to a no-stress community airport — an occasional mid-week night at home.

How’s that for putting a positive spin on the word “disruptive?”

Plus there are other ramifications. Such as being able to add a quick $250,000 or $500,000 to your retirement fund by selling your 40-year-old, $1.7 million Santa Monica home down the road from LAX and relocating to a bigger, better, newer $750,000 home five minutes away from the Klamath Falls Municipal Airport.

And if VLJs are going to ease geographical constraints for individuals, they will surely have the same pleasantly disruptive effect on many corporations.

IBM’s relocation of many significant operating divisions from Southern California to Boulder, Colorado made business news headlines in the latter part of the 20th Century. The reasons for the moves were impeccable — lower real estate costs and corporate taxes, a more business-friendly political environment and a lower cost, better quality of life for employees.

What didn’t change much was the travel protocol for Big Blue’s middle-management executives. Where they had previously driven for an hour or so and flown out of L.A. or Burbank, they now drove for about 45 minutes and flew out of Denver. (Upper management’s situation didn’t change much either, instead of getting on a corporate jet in Van Nuys, they boarded at Boulder.)

The fact was that in trying to get out of the smog and second-rate public schools belt, IBM had to go to Boulder or someplace like it. They had far too many people in the air on a regular basis to locate more than 60 or 70 minutes from a commercial airport (no Fortune 500 company spends money to send a production manager to visit a factory on a Gulfstream or corporate 727.)

By about 2015, however, expanded VLJ air-taxi services will give companies planning to do an “IBM” out of L.A., Chicago or Manhattan a much richer selection of locations to choose from.

Or forget 2015. In some areas, companies have that choice right now. Take Florida. Thanks to DayJet, many firms thinking of relocating to the Sunshine State are no longer faced with the unappetizing choice between the equally gridlocked and expensive cities of Orlando, Miami and Tampa.

Disruptive?

Yes, the development of the VLJ air taxi industry can certainly be described as that. But it is a positive disruption. A productive disruption. A necessary disruption. A disruption reminiscent in some small way of another disruptive event that was all about freedom and choices — the American Revolution.

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