Expert Risk Articles

Very Light Jet Insurance

Jet speed, flexibility and costs less than a house in London. Will the very light jet remake aviation? AGCS provides insights to very light jet insurance.

Depending on who is talking, the very light jet, or VLJ, is either going to change the way travelers fly, or it's going to fall short of its backers' lofty projections and merely become the new entry-level personal jet.

The concept of a very small business/personal jet dates back to the late 1970s, when Tony Fox, an American entrepreneur, began promoting his idea for the twin engine Foxjet. In the late 1990s, other entrepreneurs and aviation companies began to come around to his way of thinking, evolving a new category of small jet that offers about half a dozen seats for less than $1 million.

A new kind of plane

It has been a long road, but earlier in 2007, Eclipse Aviation began delivering the first FAA-certified VLJs. They represent the first real step toward confounding the many critics of this new form of personal travel. Veteran observers in the sector now give reasonable odds for success to about half a dozen contenders in the field.

Industry giant Cessna was actually first to fully certify a VLJ (its Citation Mustang), but did not rush into deliveries after certification. Other companies developing VLJs for certification and production include Spectrum, Adam, Cirrus, Diamond and Embraer. Honda also sees a market for small jets and is in the ring.

Spectrum also did not rush to be first, but is committed with its Independence S-33 and is enthusiastic about the future of the VLJ.

"I think it will do for personal air travel what cellular technology did for telephones or the Internet has done for information," explains Stefano Sturlese, European CEO of Spectrum Aeronautics. "You don't need to rely on huge infrastructure, but rather can go virtually from point to point at a much larger range of destinations at increasingly lower costs."


The prototype Spectrum VLJ in 2007

It remains to be seen whether hordes of VLJs will darken the skies carrying regional passengers in an air taxi role, but would-be operators of VLJ fleets in the United States and Europe are convinced they can make the economics of such services work, and that the travelling public will embrace this alternative to driving and the ever more inconvenient airline experience, even though it will mean flying with strangers in close quarters, often without a lavatory.

DayJet, an American firm, will be first to take to the skies with its "per-seat, on-demand" air taxi service. The name neatly conveys its mission: turn trips that would normally require a hotel night into one-day out-and-return itineraries.

The price of a ticket will vary with the degree of scheduling flexibility the traveler is willing to accept — the more flexible the departure and return times, the cheaper the fare. Complex software will handle the crewing and scheduling and keep enough seats filled for DayJet to function and make a profit, insists founder and CEO Ed Iacobucci.

A new set of challenges

Other related issues that have generated lively discussion during the gestation of the VLJs include pilot skills, training and insurance coverage. Professional crews of full-size business jets and jetliners have expressed concern about sharing the stratosphere with owner-pilots who might have previously only flown piston airplanes.

All VLJ developers emphasize that they recognize the importance of the quality and suitability of the training their customers will receive. Cessna signed up with FlightSafety, and has distanced itself from the term VLJ, preferring to call the Mustang its "entry-level jet."

One school of thought in the United States holds that the VLJ developers' rosy predictions have fuelled the airline-led movement toward funding aviation's infrastructure with user fees, since the forecast hordes of these small machines will need airspace and runway slots that are already alleged to be in short supply.

General aviation operators counter that the argument is bogus, because VLJs—like business jets—will operate mostly from fringe airports and not from the clogged major-city hubs that are the root cause of much of America's current airline congestion woes.

Even if the per-seat, on-demand model falls short of some expectations, the VLJ has a bright future as a more affordable ticket to jet operations for existing aircraft owners for whom buying a new personal or business jet has been out of reach thus far.

Download "Global Risk Dialogue" fall 2007 (1 MB)