I have rediscovered this summer the excellent book of Clayton Christensen, Seeing What’s Next, about innovation in industry. In his book, the author describes how Graham Bell, after prototyping the telephone in 1876, tried to sell his patent for $100’000 to Western Union, a leader in telegraph business.
Legend says Western Union’s executives, seeing no future in that invention refused Graham Bell’s offer. A few know that the story is a bit different.
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We’re currently on track for a nice deal with several Boeing aircraft, but in the course of the negotiations, a flock of intermediates have popped up into the picture and asked for fees (you know the story, a friend of a friend was kind enough to introduce someone to someone else, etc.)… I have personally a great deal of experience of dealing with go-betweens, and for sure, that’s generally not a big issue. However, that’s an intensive practice in the aircraft business and anyone’s building up a project with commercial aircraft must consider this issue very early in the deal process.
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As we’re building up a strong team (lack of human resources is becoming hard to stand) for our next challenges (we have just now validated three additional nice operating lease projects, considering six aircraft – A320s and B737s –), one recurrent question that comes up again is: don’t we need money first, then it should be easier to harvest the marketplace for aircraft, pouring money resources (means: mostly in form of a refundable deposit) to capture then sign aircraft deals?
For me, answer is definitely no.
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Last week, Bernard (our non-executive Chairman), told me “what you’re suggesting is not a current practice in the aircraft business”. Bernard is great, and he was actually not complaining, but was just surprised that we can think out-of-the-box and find solutions to somewhat desperate issues.
I would say: we MUST think out-of-the-box. Everyday. It’s vital. It’s where innovation lies.
Of course, it’s demanding, uncomfortable and it requires perseverance. It’s an endless process of “tests and errors”, but it’s rewarding. Okay, that does not learn a lot to you. Where it becomes interesting is thinking boldness as a systematic learning process. At The Green Airliner, we have implemented a dynamic process flow of doing differently. I was (amazingly) surprised that this process (a stuff often synonym to “rigid”) has led to original ideas, making eventually our marginal profit.
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I was recently invited to meet some representatives of a large, famous Wall Street investment bank interested in our development. I must confess that I like meeting smart individuals, and these bankers were really bright.
So beyond the pleasure of having some good words about our aircraft business, the question of business growth was central. I must say that it’s my daily obsession. We’re reaching today a tipping point that requires additional, substantial funds.
But wait a minute: growth is still in itself a question of money? Isn’t that first a question of team size, evolution of our practices, business tools and capabilities to properly serve a customer? Would we still be able to properly execute our commitments? Or develop our ability to adapt our mutual expectations to each other in a different, larger environment?
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After the fourth year of The Green Airliner’s operations, this becomes something less and less surprising to me: everyday I’m directly called by Mr X, who knows Mr Y, who knows someone I know (my good friend Mr Z 
)
Mr X seems to be a good man, but he’s making promises. And the less I know about Mr X, the more I hear overpromises.
A veteran of aircraft business (so my good friend Mr Z) has explained to me that it’s current practice in the aircraft business (but not in satellite business I practiced for nearly twenty years). But does this kind of introduction make necessarily good business deals?
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Variable fuel costs. Increased regulatory demands. One thing’s for sure – operating a profitable airline isn’t getting any easier.
Unfortunately, there is another crisis looming on the horizon. The current fleet of aircraft is
getting older. We know that roughly 7,000 commercial aircraft will be decommissioned by the
year 2020. Our guess is that one day, large airlines will develop real profit centers to manage
their aging birds – but for now, it’s chaos. Today, market players turn over their decommissioned craft on the secondhand market or hide them in places where they can be forgotten (for now). Neither is a very attractive option. Airline companies benefit from cheap, upfront money, but huge risks remain.
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fly•col•o•gy – n. Any human interaction or business decision that simultaneously
increases asset profitability, improves aviation safety and protects the environment.
Eco-friendliness isn’t a phrase that is typically associated with the airline industry. Thousands of
aircraft crisscrossing the sky with trails of smoke and fuel emissions make it difficult to refer to
planes and green business processes in the same sentence.
But all that is changing with something the Green Airliner like to call, “flycology”.
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