In many ways, the 21st Century air-taxi industry is so new it hasn't had time to develop a lot of sacred cow molds. But if there was such a collection of molds, it would only be fair to say that FlyMiwok intends to break just about all of them once it begins revenue service throughout much of Southern California January 15.

FlyMiwok, whose name is derived from the Miwokan Native American language word for "people," intends to truly blend something old (circa 1920's short hops), something new (below airline coach-fare pricing), something borrowed (airline-inspired demand-driven rate setting) and two things totally blue sky -- franchising and socially networked flight booking -- into a new class of air-taxi service they hope to knit into a nationwide system within 36 months.

To find out what's about to take wing over the gridlocked freeways of America's automobile-loving epicenter, we talked to FlyMiwok CEO Gad Barnea, a technology entrepreneur, commercially-rated pilot and ex-Israeli Air Force air traffic controller .

AirTaxiFlights.com: Many people are surprised that it's taken this long for a major air-taxi operation to set up shop in Southern California. What did you see about this market that other operators may have missed?

Gad Barnea: I think in some cases it's a matter of how you view competition. We realize that our competitors are not the airlines, they're the cars.

The latest AAA statistics show that driving anything from a full sized sedan to an SUV or van costs between 62 and 69 cents a mile. So driving from downtown L.A. to downtown San Diego and back costs more than $150 and takes five to six hours. Flying AirMiwok could cost you about $240 in money and an hour and 15 minutes in time. The choice is really a no brainer.

Also, even though we aren't competing directly with the airlines it's interesting to note that the same trip booked through Expedia costs about $800 coach unless you want to waste half the day stopping at Phoenix or somewhere else. (Editor's note: As of 11/08/2008 Expedia's lowest cost ticket+taxes fare on this route was $795 for two-day-out travel.)

ATF: Most air-taxi operators promise to meet or beat scheduled airline first class and, sometimes, business class fares. As in the example you just gave, you're promising to undersell airline coach seats. How is that possible?

Gad Barnea: We've spent three years developing a model that would be quickly and consistently profitable while allowing us to offer fares that are often better than flying with the airlines and comparable, in many cases, to driving. What makes our system unique is that fares are demand-curve based. It's a unique hybrid of a typical air taxi model and the airline model.

Most air taxi services are based at a specific airport and operate within a certain radius around that airport. We call that the radius-around-the-point model. It's primarily based on aircraft capabilities and 99 percent of today's air taxi services use it.

The problem with that model is that it doesn't take demand curves into account. It doesn't account for the fact that you can't optimally price a flight between San Francisco and Los Angeles using the same criteria you use pricing a flight between Bakersfield and French Valley.

Trying to do that is nonsense. It's a lose-lose situation for both operators and travelers. The airlines obviously used to understand this. They became very focused on demand curves and deploying dynamic pricing systems in the late '70s. Recently, they've become less concerned with dynamic pricing than competitive pricing and we've all seen how well that shift in focus is working for them.

To get back to your question, one of the reasons we can keep prices down is that we don't work on a radius-around-the-point model. You can see that on our service map, which spreads out fanlike to encompasses the areas we expect to generate the most demand.


The reason our route map is drawn that way is because we defined our system by considering things like the main transportation requirements in various areas. We studied the highway maps and the traffic density on those highways. And we decided we really wanted the majority of our flights to be short hops under 45 minutes so we could be sure of consistently filling the airplane with paying passengers without having to kill time refueling at every stop.

ATF: What exactly do you mean by demand curve pricing?

Gad Barnea: Most air taxis are priced by the hour and by the plane, they're more a charter than a taxi. We're more like DayJet in that area because we sell the seat, rather than the plane. But unlike DayJet, we don't just sell the seat based on how long or far the flight is. We dynamically factor different demand curves into calculating the price we're charging for that seat.

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