In a previous post titled “Jets 1.0 vs. Buyers 3.0” we discussed the challenges and opportunities of the private aviation industry in light of the changing dynamics in today’s marketplace. In summary, because of old and inefficient business models charter buyers are paying more than they should and the investors are loosing money. How long can private aircraft operators continue with this model? Not long because the transparency of information and innovation fueled by technological change will increase competition.
The New Competitor: The Internet
In a short period of’ time, says Andy Grove, the previous chairman of Intel, all companies will be Internet companies, or they won’t be companies at all.
The Internet is helping companies to lower costs dramatically across their supply and demand chains, take their customer service into a different league, enter new markets, create additional revenue streams and redefine their business relationships.
What Mr Grove was really saying was that if in a few years’ time a company is not using the Internet to do some or all of these things, it will be destroyed by competitors who are. Mr. Groves comments about the internet was before the age of social technology which is accelerating the very things Mr. Groves proclaimed.
But We Sell, Maintain and Charter Jets….
Private aviation operators are a tough breed of business people. Most are entrepreneurs who love the affiliation with aircraft that are expensive and users who usually are wealthy. They recognize that maintaining, operating and selling aircraft services are specialized and 24/7 services that all have serious risk. One mistake can cost you your business and worst yet the lives of your employees and passengers.
Most aviation business leaders, and their affiliated associations, do not consider the internet as either a strategic benefit or threat to their business. Most wouldn’t know how to use Facebook, Linkedin or Google+ strategically or tactically. The internet, social media and all related tools are for the younger generation as most would likely say.
They would also say that private aviation is complicated and there are so many variables that influence price that buyers get confused easily. That is why many buyers use brokers. In fact CharterX/Avinode is an online software platform that lets brokers, not direct buyers, supposedly shop for the best deal for buyers. Operators pay monthly fee’s to list their aircraft inventory and availability while brokers pay a month fee to use the service to shop for aircraft for their clients. There really isn’t an Expedia, Travelocity or Orbitz to help buyers sift through the complicated options of private aviation….yet.
The New Private Aviation “Broker”
In an earlier headline we said “The New Competitor. The Internet” but it isn’t the internet rather it is new players that know of to use it. The reality is that while the internet is the enabler of competition the real competition is new players that know how to use the internet to dis-intermediate the information required for buyers to make decisions about choosing private aviation services and related prices.
The image in the beginning of this article depicts the new “Google Flights” with a few relevant menu items added. Google Flights currently aggregates all commercial airlines schedules, prices and displays them visually in a map. Now imagine all the relevant information from the private aviation industry displayed in the same manner. Said information could easily include:
- Scheduled flights, departures and arrivals as well as length of flight
- Type and make of aircraft with pictures and number of seats on aircraft
- Departure and destination airports
- Empty legs with #1 and #2 included
- Price for the flight as well as price per seat for both scheduled and non-scheduled flights
- Operator of aircraft as well as history and rating of operation performance
The interactions forms the basis for ongoing dialog which enhances the quality and visibility of the relationship.The more on-line interactions there are the higher the rankings you get on the search engines. In turn when buyers go to search for relevant information they will also find the people and firms who have provided the most valuable information.
Today private operators use of the internet is akin to passing out slick brochures. Buyers can easily cut through the BS and subsequently move on to a destination that affords valuable and interactive dialog. Google helps them do just that. Get it? Welcome to Jet 3.0