Cameron Ogden still says it can be done. Despite the ongoing pessimism surrounding the air taxi model in Europe, Blink’s managing director says that it will work – but aircraft finance is holding them back.
The company that launched to great fanfare in 2008, aiming to “revolutionise” business aviation in Europe, has had a humbling few years. Blink’s first commercial flight took place just 10 weeks before Lehman Brothers filed and demand has not met the business plan.
“We admit we made mistakes,” says Cameron Ogden, CEO and co-founder of Blink. “Our plan was too bold, too fast, and at the wrong time.”
Co-founder Peter Leiman has left Blink, joining low-cost airline Air Asia, and Ogden has been forced to ask investors – who originally put in $30 million – for more cash.
“We have had one very unsatisfied investor, but all the investors are still on board,” says Ogden.
But, despite the problems, Ogden believes there is still a future for light jets. The company, now operating eight Cessna Citation Mustangs, hopes to break-even this year and it has had a good few months.
“The summer has been good. We’ve flown 75 hours per month, which is the equivalent of 560 hours per year,” he says. Summer tourism is important as one disadvantage of the Cessna Citation Mustang is that, unlike Embraer’s Phenom 100, it cannot carry skis.
“We’re focusing heavily on bringing the cost base down. We’ve relocated to London Blackbushe and consolidated all our aircraft and operations there. At Farnborough you pay £1000 to land a jet, at Blackbushe we pay £50.”
Despite doing everything he can to improve Blink’s margins, Ogden says there are issues they cannot control.
“The biggest problem is the asset finance market,” he says. “Financiers know these assets depreciate overnight.”
Blink manages two Mustangs and owns six from an original order of 30. All six of its aircraft have been financed by Cessna Finance Corporation. These were financed with a 50% loan-to-value and Ogden says this makes it hard to grow the fleet.
The original business plan relied on Blink selling most flights direct. Though direct sales remain important, the airline now works closely with brokers. Victor, a very recent entrant to the market, is introducing a per-seat model as a way of reducing the price of each individual’s charter.
“I’m a great fan of people who bring fresh ideas into the market,” says Ogden, “but I don’t see that model working. If you’re paying £750 for your seat on a private charter, you don’t want to be sat next to someone who smells bad or be waiting for a fellow passenger who’s running late.”
Ogden believes that consolidation among the air taxi firms could be a way of improving utilisation rates, as well as reducing significant overheads across the market. He revealed that there have been some serious discussions over possible mergers, though nothing was ever agreed.
“I think I’m a little more pragmatic than some in the industry, but you are also dealing with plenty of egos, including my own.”
Ogden says he genuinely believes air taxi will work and that they have learnt a lot in the last three years. “For now it might be a case of evolution rather then revolution. We have certainly changed the industry, and with the right finance conditions I believe this model will make private aviation affordable for many more customers.”