Commercial airlines are not the only ones feeling the pain of $120 a barrel oil. DayJet Corp., the ambitious air taxi startup run by software veteran Ed Iacobucci, according to The Associated Press, is laying off 100 workers and scaling back its expansion plans barely six months after it launched its service.
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Delray Beach, Fla.-based DayJet took flight last October, offering service to five Florida cities using Eclipse 500 very-light jets. The company, which has already grown its fleet to 28 aircraft, initially planned to expand in the coming years to dozens of additional locations across the Southeast, including Alabama, Georgia, Mississippi, North Carolina, South Carolina and Tennessee.
Now, apparently, fuel costs are causing the company to rethink those aggressive expansion plans. DayJet has raised more than $200 million to date in both private equity and debt from undisclosed investors, including a $50 million equity round in 2007 that Raymond James Financial Inc. put together.
Though air taxi services like DayJet, which provide per-seat, on-demand service to and from smaller airports to customers who pay annual membership fees and per-mile fees, are surely being squeezed by fuel prices, there is still reason for hope. The company's niche customer are salesmen and other business travelers who need to go between smaller destinations not served nonstop by larger airlines and who are currently driving instead of flying commercial. As the price at the pump continues to climb, these customers may instead opt to fly -- assuming DayJet can keep its prices down.
DayJet just hope they don't stop traveling altogether due to higher costs and a recession. - Lou Whiteman
See TheDeal.com story on DayJet landing $50 million in financing
See Associated Press story on DayJet cutbacks
See TheDeal.com story on DayJet taking flight
