BUSINESSWEEK ONLINE : NOVEMBER 20, 2000 ISSUE
SCIENCE & TECHNOLOGY

Taxi! Get Me to Nebraska


Richard Nobel gets his kicks from living on the edge. Ever since he was 6 years old, in 1952, he has dreamed of setting a new speed record for cars. ''The bug wouldn't leave me,'' he says. So in 1974, he decided ''it was time to have a go'' and chucked his job as a salesman. In 1977, Nobel trashed his first jet-powered car. But in 1983, he streaked across Nevada's Black Rock Desert in his new Thrust 2 car and set a world record: 633.5 mph.

The Scotsman wasn't content, though. For an encore, he wanted to break the sound barrier on land. In the fall of 1997, Nobel's team returned to Black Rock. Deeming himself too old to pilot the new ThrustSSC (for supersonic car), Nobel turned the wheel over to Captain Andrew Green, a Royal Air Force fighter pilot. On Oct. 15, Green fired up the car's two Rolls-Royce jets and, riding the equivalent of 110,000 horsepower, zoomed across the desert. On his first run, Green hit 759.3 mph--and 766.6 mph on the second. Both runs broke the sound barrier, and the official record of 763 mph still stands.

SHOESTRING. Then came a fateful encounter. To pay off some outstanding bills from the project, Nobel took to the lecture circuit, talking about how the ThrustSSC team was organized to innovate on a shoestring budget. Early in 1998, he was invited to a meeting of Dell Computer Corp.'s European managers. Afterward, Nobel was hobnobbing with several execs, including Chairman Michael S. Dell. When asked what he was going to do next, Nobel said he was working on an idea for a new business jet. That led to a discussion about Dell's mounting frustration with airline service. ''They told me they had tried using business jets, but those jets were just as hopeless because they used the same crowded airports as the big jets,'' recalls Nobel. ''That's how it started.''

''It'' is an air-taxi service that will use small airports, an Internet-based reservation service, the global positioning system (GPS), and the latest cockpit electronics. Combined, the result will be a small plane that's as safe as an airliner and more comfortable than today's executive jet. And travelers could summon it, like a taxi cab, to a nearby airport and fly straight to the local airport closest to their destination.

Nobel hatched the scheme after a little homework had unearthed some astounding facts: There are 2,071 airfields in Europe and 5,736 in North America. Only 3% are used by large commercial jets, and business jets are restricted to just 15%. So passengers often bounce through crowded hubs to get to their real destinations. Furthermore, for scheduled flights of less than 1,000 miles, the average speed is 325 mph or less. Thus, a plane that could land at small airports and fly at 350 mph would not only avoid big-airport congestion but also provide quicker service.

To create such a plane--a roomy five-seat prop-jet dubbed the F1--Nobel tapped engineers who had worked on the supersonic car, including William Brooks, head designer of ultralight planes at Pegasus Aviation in Marlborough, Wiltshire. Brooks had helped part-time with the ThrustSSC but left Pegasus to work full-time on the F1. As chief engineer, Nobel lured Nigel Bamber from Britain's Defense Evaluation & Research Agency. At DERA, Bamber was in charge of analyzing how well aircraft withstand the stresses of flight. Together with a handful of other engineers, this team set up shop in 1998 as Farnborough-Aircraft.com Ltd. in a building on the airstrip in Farnborough, Hampshire, home of the annual Farnborough International Air Show.

To help the startup make good on its scheme, Dell is furnishing high-end computers--and 18 other companies are providing goods and services to minimize Nobel's costs. For example, materials for the plane come from Cytec Fiberite Ltd. in Wrexham, England, and Obo-Werke & Co. in Stadthagen, Germany. Another booster is Unisys Corp., which processes 50% of world air reservations--and hosts Farnborough-Aircraft's Web site. The Blue Bell (Pa.) company is developing a new reservation system, and it will include the specific ability to handle the type of on-call air service that Nobel envisions on the Internet. ''This is out-of-the-box thinking--a whole new approach to airline congestion,'' says Dennis Christ, general manager of Unisys Global Transportation. ''I think [Nobel] has a real market--and a small-business aircraft that could take a lot of the market from existing business planes.''

Charles M. Stancil agrees. A transportation expert at Georgia Institute of Technology's Research Institute, he says: ''What this kind of Internet-based system brings is a utility that has never before existed in transportation.'' Business people will no longer have to travel at airlines' convenience, often wasting a day going to and from hubs. ''For business, this would be really good stuff,'' Stancil says.

LOW ALTITUDE. Much of America's East Coast is already ''wired'' for an air-taxi type of service, Stancil adds, with a GPS network that can guide takeoffs and landings at airports without control towers--and monitor flights over hundreds of miles. ''It was demonstrated during the Atlanta Olympics,'' he notes. ''We managed all low-altitude traffic in the Atlanta region using GPS technology.'' When Georgia Tech dug into the economics of a regional air-taxi service, Stancil notes, ''it turned out to be cost-competitive with first-class tickets.''

NASA is promoting further deployment of GPS systems to aid pilots of small planes. As the infrastructure for air taxis spreads, Farnborough-Aircraft will face some stiff competition. Indeed, Bell Helicopter Textron, a division of Textron Inc., has a nine-passenger tilt-rotor aircraft, called the Bell/Augusta 609, that is scheduled to make its maiden flight next summer. It has two turbo-prop engines that swivel. Pointing up, the 609's oversize propellers enable it to land like a helicopter. With the engines rotated forward, the plane cruises at 300 mph. Bell says it has already booked 80 orders--vs. two for Farnborough--including a pair for a planned air-taxi service in Europe.

The first problem Farnborough-Aircraft faced when it opened its doors was money. To build three prototypes for test flights starting in 2002--and leading to airworthiness certification as early as 2004--Nobel figures he will need around $25 million.

He didn't even try to get the money from venture bankers. He knew from past experience with the ThrustSSC that they weren't interested in such long-term gambles. But the experience with three cars has honed a business model that skimps along on a day-by-day basis. To create the SSC, he enlisted 200-odd corporate sponsors, which picked up most of the project's $4.1 million tab, but individuals chipped in some 20%. When Nobel didn't have the cash to buy the 250,000 gallons of jet fuel needed for a big cargo plane to ferry the 60-foot-long, 10-ton car to Nevada, he issued an appeal on www.thrustssc.com. Racing buffs and Web site regulars bought all 250,000 gallons of fuel. For the way he exploited the Internet, Nobel won praise from William E. Fulmer, a senior fellow at Harvard Business School, in his book Shaping the Adaptive Organization, published last March.

Because of the response to his jet-fuel message, Nobel plans to rely on the Internet to raise almost 100% of his cash requirements. Since October, 1999, when shares were first offered on the Web site, 310 people have expressed interest--and 110 have actually coughed up money. ''The usual investment is about $6,000,'' says Nobel, ''and we've raised close to $1.5 million.'' Share prices will increase as Farnborough passes major milestones, so early investors will reap bigger payoffs. Nobel expects to live hand-to-mouth for the next four years. ''We'll probably never have more than six weeks' working capital,'' he says.

The second big problem, after funding, is wing design. Getting a fast prop jet in and out of small airports takes a special wing. One that performs efficiently at high speeds and altitudes can be a bear during landings and takeoffs. That's why most jets land ''hot''--at high speed--which means long runways.

Enter Gordon M. Robinson. As a researcher at Southampton University, Robinson pioneered an evolutionary approach to wing design, using so-called genetic algorithms. Combined with advanced optimization techniques, genetic algorithms breed progressively better designs by combining solutions to individual specifications in myriad ways--often coming up with results that human designers might never have considered. When Robinson mentioned all this to Nobel--Robinson had also worked on the ThrustSSC--he was promptly invited to climb down from his ivory tower ''and do this for real,'' as he tells it. Adds Nobel: ''We had wasted months going in the wrong direction. That changed when Gordon joined us''--in January, 1999.

Simulations of Robinson's wing design indicate that it generates lots of lift during landings, enabling the F1 to swoop into small airfields. And after takeoff, the plane can climb rapidly to avoid flying low over nearby houses, reaching 25,000 feet in just 8 minutes, compared with 14 minutes or more for rival business planes such as the Socata TBM 700. The wing design is now undergoing wind-tunnel tests.

Robinson also triggered a change in fuselage design, improving its ease of manufacture. Here, his model was the World War II Mosquito fighter-bomber, designed by de Havilland Aircraft Co. and made of wood. That was partly to reduce dependence on scarce aluminum but also to ramp up output rapidly--by farming out the production of the fuselage and wings to local homebuilders and boatbuilders. Now, Farnborough hopes to do the same with its fiber-reinforced composite airframe.

The plan worked for de Havilland. Between 1940 and 1945, it assembled nearly 8,000 ''Mossies,'' which flew faster and much farther than the original Spitfire. They also flew higher than any other plane in the early years of the war. Mossies shot down hundreds of Hitler's buzz-bombs and night bombers.

SPLICED. When Robinson picked the brains of two retired de Havilland engineers, he learned another trick: The Mossie's fuselage was built in two halves, split vertically down the center. That way, the cockpit instruments, cables, wires, and ducts could be easily installed before the halves were spliced together. ''That was very clever,'' says Robinson. ''Normally, fitting out all the internal systems takes a lot of time,'' because technicians have to crawl around in very cramped spaces.

If everything comes together as planned, Nobel boasts, the F1 will be a $1.9 million ''pilot's plane''--easy to fly, rugged, and very fuel-efficient. Indeed, he expects some airline pilots to give up their big-jet wings and buy F1s, just as many taxicabs are operated by owner-drivers. Nobel calculates the F1's total operating costs at roughly $400 per hour over 1,000 hours of flight time a year. If an owner-pilot charged $2 per mile and the plane averaged 345 mph, it would bring in revenues of $690,000--for a profit of $283,000, or double the salary of many airline pilots. ''I may fly one myself when I retire,'' says Nobel, who is an accomplished pilot.

The airlines think the solution to airport congestion is bigger planes and bigger airports, sniffs Nobel. ''That's precisely what passengers don't want,'' he asserts. ''We're coming the other way, offering point-to-point service that you schedule at your convenience.'' He's confident the concept will turn air travel on its ear--and validate the F1's nickname: the hub-buster.

By Otis Port in New York

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ILLUSTRATION: The F1 (left) and the British Mosquito (right)

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