DayJet

Summary

DayJet is certainly the highest profile failure to create a mid-level semi-private jet travel company.  DayJet was formed in 2002 around the idea of becoming an air taxi service selling seats in very light private jets on a per seat  basis.  They spent five years doing market research before, raising $118 million to buy a fleet of Eclipse 500 jets and starting operations in 2007, starting with routes in Florida.  By 2008 they had laid off 100 employees and were floundering under the heavy overhead of their fleet.  Later in 2008, they ceased operations and began selling off their fleet.

They had placed a lot of emphasis on their super routing technologies, and after the collapse of the business the rolled that technology into a new company called DayJet Technologies.  That company was recently renamed  BoldIQ and the algorithms were re-purposed to serve any company with complex logistics.

Failure Analysis

DayJet clearly overestimated the size of the market and made capital investments far outside of the markets ability to support.  Actually, the market probably could support that size  of operation ultimately, but they started off with carrying costs based on the assumption that they could develop the market to a level to support those huge carrying costs.  Obviously, the grossly miscalculated.

They also mishandled the branding and positioning of their cost/benefits mix.  They focused on the ‘commuter’ aspect, using the smallest, most basic jets available and  positioning it as an air taxi–i.e. just a way to get back and forth.  This image is inconsistent with the premium price travelers must fly to get on these jets.  They also downplayed the social aspect, treating the fact that you are traveling with others as an inconvenient trade-off to be de-emphasized in their marketing story.

They tried to position themselves as an ‘airline’ that was all set up to provide convenient service at an affordable rate.  But the overhead of providing that complete infrastructure and system to deliver service on-demand to an undeveloped market was way to great.

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