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Dollars and Dreams

Friday, August 23rd, 2013


I see that Virgin Galactic has announced a 25% increase in the price of their suborbital flights, from $200,000 to $250,000. The close to 600 people who’ve already put down a deposit at the original price will not be assessed for any addition fees; this applies only to latecomers.

What’s interesting to me about this is that as a technology evolves, you’d expect prices to go down, not up. Now whatever else Sir Richard is or isn’t, I think we can all agree that he’s a savvy businessman. When he cut the deal with Rutan, Spaceship One was already flying. And from what I read, it got there for about $25 million. So the budgeting for Spaceship Two was not done in a vacuum.

The revenue from the tickets sold so far is $120 million. I’ve got no idea what it costs to fly Spaceship Two, but I sense that at $200k/ticket, there may be room to make a few bucks, or at least not operate at a desperate loss.

Of course, margins would be better at $250,000. And I think this is an example of an inelastic price; that is, there aren’t a whole lot of people who’d be wiling to plunk down 200 grand, but at 250 would say “No, that’s just too much.” So why not run the price up a bit?

I’m kind of hoping that this is a case where the price is set based on what the market will bear. And I’m also thinking that, once the first few flights take place and don’t end in a smoldering crater, there will be an uptick in demand, from the folks on the sidelines who have the means and desire but also have safety concerns. After all, you didn’t get to the point in life where you can casually drop a quarter of a million on a joy ride without at least a degree of prudence.

So you’re Sir Richard, and you’ve got this unique service that costs $X to provide, where $X is significantly under $250,000. You start at $250,000, and sell all the tickets you can at that price. When sales start getting soft, you drop the price to, say, $195,000, and pick up some marginal customers who were initially priced out. And you keep doing this until you reach $X plus some percentage, the amount you judge to be a worthwhile profit. Or put another way, the percentage below which you don’t want to be bothered with the hassles of running your own space program.

So once he’s flying regularly, I expect the price to drop. How much? Beats the hell out of me. But I’ve said here before, if it gets to the price of a decent car (~$25,000) , I’ll find some way to take the trip, though even at that price, it works out to about $1000 per minute of actual flight time.

A frivolous expense? Perhaps. But I suspect that a jaunt into space would be one of those experience that divides your life into a before and an after. And to me, that’s worth driving a junk car for a few years.


Life in the 21st Century

Monday, August 5th, 2013

I’d known about Heritage GardensDriving Our Dreams exhibit for a few months, but it wasn’t until yesterday that a house guest provided the excuse to head over for a look.

I’ve always had a weak spot for examining what the future looked like from the past. Give me a 1950’s Popular Mechanics magazine with an article about life in the 21stcentury and you’ll keep me busy for hours. So an opportunity to wander among spaceships like these


was not to be missed.

Doubtlessly these were built to attract attention. And they do. Whether that transforms into a desire to buy is less certain, at least to me. There is a claim that when Chevrolet sells a handful of $100,000+ Corvette ZR1 coupes, it drives sales of Cavaliers and Cruzes. Maybe. Or maybe not.

But as I walked among these glimpses of the past’s future, I couldn’t help but think that at that time we enjoyed a sense of optimism that somehow dissipated over the last two generations. These cars broadcast the idea that we’d be going faster, and in more comfort, and (possibly this last one is just me) to more interesting places.

Contrast that with the Toyota Prius. And without in any way diminishing the technical and business achievement of commercializing that drive system (and dominating that market segment), I don’t think anyone would look at one and think in terms of grandeur. Efficiency, sure. But not grandeur.

Ignore for a moment the question of which is more practical, or has a smaller environmental footprint, or would be easier to park. Think instead of which is more likely to quicken your pulse. This?


Or this?




Or this?


In general, our present direction may be inevitable, given the vagarities of the economy, fuel prices, highway congestion, and so forth.  But when the dust settles, I don’t mind paying a few bucks more to make the experience of getting from point A to point B more than, well, just getting from point A to point B. And I wonder whether, as this century unfolds, the auto makers, regulators, and so forth will share that desire.

And then I see something like this, from Scion, of all places, and realize there’s hope.



On achievements, and life

Tuesday, July 10th, 2012

A recent article from my old stomping grounds tells of a fellow who’s been driving a 1966 Volvo P1800S since it was new, and is just a few thousand miles from reaching the 3 million mile mark. Since 1966 isn’t particularly old for an airplane, that got me thinking about the comparison.

A very high-time Skyhawk from 1966 might have as much as 10,000 hours on the airframe. At 110 knots (optimist that I am), that would equate to about 1.2 million miles. A clear win for the Volvo. Working the math the other way, assuming an average road speed of 40 mph, that three million mile Volvo was on the road for 75,000 hours, or about 4.5 hours a day, every day for 46 years. Or in different units, 8.5 continuous years of driving.

I’m quite impressed by what Mr Gordon’s accomplished. But I’ve reached a point in my life where I realize that I don’t have an unlimited amount of time here, and using it optimally is important to me. So without in any way diminishing his achievement, I do find myself asking whether, of all the things he could have done with that 75,000 hours, was setting this record the most rewarding of all possibilities?


Sunday, April 22nd, 2012

After more than eight hours of flight, I found myself at Fort Lauderdale Executive airport, with a nice line guy handing me a cold bottle of water. Another delivered my rental car right to the proper side of the plane with the air conditioner already running, as is the Florida tradition.

Mostly, the trip was uneventful. But the third leg underscored for me what a good metaphor private aviation is for life. After stopping in Brunswick, Georgia to buy gas, I checked the local weather between there and our destination, only to find the area peppered with heavy rain and thunderstorms. A full-blown thunderstorm will chew up a small plane and spit it out in parts; surviving such an encounter is unusual. One option was to spend the night in Brunswick and depart early the next morning. But stepping back, I realized that I was in a situation similar to the one every new pilot is in when he starts flying. Take too many risks and you die. But take no risks at all, and you’ll spend your flying life never straying far from your home airport. So the problem becomes one not of risk minimization, but rather risk optimization. Where’s the sweet spot in the curve where you’re pushing new horizons but are still safe?

Its really no different from what we do with the rest of our lives. Personally, I tend to err on the side of caution. And I’m probably poorer for it, not so much financially (though maybe that, too), but in terms of life experience.

In the airplane, I’m fortunately equipped with some equipment that’s able to view weather radar, but with an image that’s not quite current. I’m also equipped with a device that can detect lightning strikes, but does nothing to detect dangerous storm system that aren’t yet at the lightning-making stage. During the trip, I was talking to an air traffic controller whose job was making sure that planes didn’t collide, but who was also able to provided some limited information about weather . She could help me avoid the storm cells, but she had her own agenda that came first.

So essentially, I was integrating my own observations with those of others, and with the needs of others. The penalty for doing badly was potentially very uncomfortable. It might have been easier to wait out the storm in Brunswick. But my though was that the problem was a manageable one, even if it ended with a stop somewhere in the middle, or a turn back to Brunswick.

We made it to Fort Lauderdale with a plane well washed by the rain but none the worse for wear. And I’m an incrementally more experienced pilot, with a incrementally better understanding of my own strengths and limitations. And that feels good.

I only wish I was better at taking the lesson back to real life.

Eclipsing a tradition

Monday, April 16th, 2012

This one’s been in the works for a while. Five years, at least. Over that time, it appears I’ve created something of a tradition. Around November, I decide that it would be a Great Idea to fly my own plane down to the Bahamas. This is not a particularly challenging flight aeronautically; basically you fly to Fort Lauderdale and make a left. It only becomes non-trivial when things like money and time become factors. In other words, in the Real World.

So at the appointed time, usually a bit before Thanksgiving, I continue the tradition by sending $10 off for the appropriate charts, after which I start drawing lines, looking at hotel rates, and adding up numbers. And then, after a while, I look at my bank account and my work schedule, and I quietly fold the chart up and put it on the shelf.

But last year, I decided to do something different. I set up an automatic monthly transfer to an unused bank account, and three months before the target date, I started informing my clients as to when I’d be out of town. So in principal, this should actually work. Two weeks, 2500 miles, two countries, six cities, ten airports, and at least one mouse (we’re stopping at Disney World on the way back). Doubtlessly there will be some anomalies along the way, but that’s okay – I’ve built a few extra days into the Master Plan.

More as it unfolds.