Flight training ripe for disruption

As a Boston-based firm we have grown up surrounded by educational institutions that have had a fair amount of success producing thought leaders and disruptive innovators. Harvard and MIT have spit out their fair share of companies that have brought innovation to sectors like technology, finance, retail and education. Like many of the companies in this region, we subscribe to a healthy does of what we call disruptive innovation, a term coined by Clayton Christensen, a Harvard Business School professor and thought leader on commercial innovation. (See a video of Christensen describing the concept.)

As Christensen puts it, disruption is an innovation that creates a new market by applying a different set of values, which ultimately (and unexpectedly) overtakes an existing market.  We can point to examples like Apple, Kickstarter, BirchBox, and Coursera (leader in Massive Open Online Courses or MOOC).

Few areas in flight training have been exposed to such innovation. Sure Garmin put out the G1000 and Cirrus produced the SR20 to increase safety, but both products were built at a higher price point that only the top tier of the industry could access. True disruptive innovation transforms a product that only a small portion of the market can access (due to affordability and expertise) and makes it available to the majority of the market.

The opportunity is that there are plenty of areas within flight training that are ripe for disruption.

Student Recruitment 

Both collegiate and for-profit academies struggle to communicate their value to today’s students, the millennial. As an example, Coursera, a driver behind the MOOC movement has focused on bringing world-class education to everyone. They have figured out a way to attract huge amounts of both professors and students onto their platform because of the value they provide. That value is learning at your own pace on your own terms, and having access to a huge community of other learners interested in the same things as you. For flight training, having ground school taught online could not only save the student some money but could also open up the pool of potential program applicants.

As an example, National Aviation Academy is working with Broward College to provide distance learning by having students take all their courses online through Broward College. That way they can complete their course work and flying without having to travel back and forth between campuses.

Student Lending

We all know the cost of education for a student pilot is substantial. I believe there are ways we can offset that cost with new forms of student lending. Take a look at what CommonBond is doing to connect alumni with students to provide financing at a lower rate. Why can’t this be done for aviation? Pilots are a tight-knit group that generally cares about the future of aviation and many are looking for a way to give back. For collegiate aviation it is easy. Alumni can invest through CommonBond and help an aviation student fund their education while earning a competitive return on their capital. Why not expand that same model to academy training?

Cost of aircraft

New aircraft are expensive. We heard at the Redbird Migration Conference a new Cessna 172 will be priced somewhere north of $400,000. As the prices continue to rise, the number of training programs and the number of students will continue to diminish. As an industry, we are squeezing out many organizations and preventing them access to equipment. The good news is that a handful of companies have started to take action and are working on putting a lower cost aircraft into the marketplace for flight training.

Accessibility of training equipment

Combine the cost of new with the average age of training aircraft in the market today (40-plus years old) and the problem of accessibility begins to grow. We get calls everyday from flight training programs that are looking for ways to upgrade their fleet of 1972 Piper Warriors or 1975 C 172s. Accessing replacement aircraft for these programs is a challenge because there just aren’t many options. Most programs have a certain margin stack that they need to fit all of the aircraft costs into in order to break even and not charge the student more money. From a leasing/financing perspective there are very few products that can do that effectively for the majority of the market.

A company that has had success in another industry is Zipcar. They were able to create a model that gave urbanites affordable access to vehicles on an as-needed basis that made more sense than owning the car outright. What if we could do that for flight training? What if we could give flight training programs the ability to “rent” aircraft hourly for one flat rate that included maintenance and insurance? Could that change the way aircraft are consumed?

So many other companies and industries have faced many of the same challenges flight training faces and have been able to innovate and change. As companies and individuals start to go after the opportunities in our industry all of flight training will benefit from the disruption. What other opportunities do you see?

–Nick Abate, director of marketing and analytics for Brown Aviation Lease