Avinode: Don’t you step on my green Converse shoes

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avinode at nbaa 2014

The Avinode exhibit at NBAA 2014 was one of the most eye-catching at the show.

If you have ever attended the National Business Aviation Association’s annual US convention and exhibition, you’ll know that it can be exhausting. For three days, you’re rarely off your feet, walking from one conference hall to another, taking the bus to the static display on the other side of town – whether it is Las Vegas or Orlando – and cramming in as many meetings and cocktail receptions as possible.

Everything begins to blend together – the long days, the aircraft and the rows of exhibition booths filled with everything from fabric samples to $50 million business jets.

Fresh new thinking

It’s virtually impossible not to notice the Avinode staff; most of them are young (and Scandinavian), but it is the lime-green Converse sneakers that make them stand out. If you’re lucky, you might even find one of their branded micro scooters to make your commute around the show a whole lot easier.

In 2002, Avinode launched an online marketplace for buying and selling private air charter. It provided real-time pricing, trip-specific aircraft matches and availability information provided by operators. Avinode has seen tremendous growth in the 12 years since it launched, but the company remains committed to bucking business aviation trends.

“Avinode was a disruptor of the traditional way of booking a corporate flight,” says Oliver King, managing director, who as a curly-haired Englishman, is not a typical Avinode employee. “We are a young company. We are a set of people that have grown up with technology; we have not grown up on Airbus or Boeing.”

By the company’s own admittance, Avinode does not have the same marketing budget as the aircraft manufacturers that tend to dominate air shows. But the company worked around this by buying a large display area and sub-letting small ‘pods’ to some of its members.

Whether you think the company’s savvy approach to branding is game-changing or simply gaudy, it is an example of what Oliver King, managing director, describes as the company’s “fresh new thinking.”

Selling data

While the suits and sneakers might look at odds with each other, Avinode’s business plan is far from cobbled together. The sneakers – each of which are emblazoned with ‘Proud Noder’ – are the product of a contract with Converse that has seen the manufacturers make over 200 pairs of shoes for Avinode; it is part of an effort to balance personality with professionalism (“we do still want them wearing suits,” says King).

All of this is part of a very deliberate campaign to make people excited about a product that is otherwise very difficult to conceptualise and, as King concedes, something that can seem a little dull.

“Our product is data,” says King. “At shows like this, the metal is always what people find interesting.”

By bringing together their partners together onto one literal platform, the Avinode exhibit cleverly doubles-up as a visual representation of its online marketplace, while at the same time looking like a futuristic wine bar. Once potential clients have been enticed in by the bright lights, the colourful outfits and the chic networking booths, they can then be shown the workings of Avinode’s system on large monitors.

King points out a young Avinode employee who has taken time out from his job as a programmer in Portland, Oregon (where, like his colleagues, he wears a t-shirt with the ‘Proud Nerder’ slogan) to help man the NBAA exhibit as part of the company’s commitment to getting staff to spend face-to-face time with customers.

“He looks pretty terrified right now,” says King. “But he’s learning about what our customers want.”

The online booking revolution

The system was and still is a B2B platform, but it paved the way for online portals like Victor and Jetsmarter, which use Avinode’s system to support online booking to private jet users.

Other B2C platforms like PrivateFly and Stratajet, however, are independent of Avinode. PrivateFly’s bespoke software integrates directly with the aircraft operator’s scheduling and pricing software; including Air Ops, Leon and BoldIQ.

“When we launched, we wanted to be the Amadeus, not Expedia of business aviation,” says King. “We work behind the scenes, but everybody can have a part of the puzzle.”

Business aviation has been much slower than commercial aviation to adopt online booking and there has been a lot of talk about the ‘online charter debate,’ with traditionalists insisting that a private jet flight is simply too costly – and complex – to book online.

ALSO READ: Why Victor is winning the online jet charter debate

For King, this is a non-issue. “It is happening, there is no debate,” he says. Firmly believing that the cultural shift towards online booking has already happened, King says it will take a combination of technology (namely, a much needed improvement in manual processing) and product alterations (such as pricing and terms and conditions) before business aviation users hang up their telephones for good and move online.

Although he concedes that booking a private jet flight is still very different to booking a hotel room, King believes the business aviation industry is well poised to benefit from what he describes as a third digital revolution, following the original dot-com boom and subsequent online experiments, which were eventually stilted by the economic downturn. “The third time is the charm,” he says hopefully.

Bedroom brokers

Avinode offers two main products: Avinode Trip Manager allows charter brokers to receive online charter quotes and send invoices, while Sched Aero has been designed principally for aircraft operators to manage flights.

The company proudly considers itself as a disruptor of business aviation, but the fiercest critics of Avinode say that its efforts to “level the playing field” have an adverse effect on the industry. While King understands the argument that Avinode makes it possible for amateur “bedroom brokers” to market charter flights, he believes the £500-per-month subscription fee is enough to ensure that Avinode’s members are at least serious about their business (likewise, Avinode will only work with operators holding an air operator’s certificate or Part 135 certificate).

“When we started, we were disrupting companies like Air Partner, but now they’re a good user of Avinode,” says King.

If anything, the problems that may or may not exist with Avinode and ones that are industry-wide. King falls short of saying that he wants to see more regulation for charter brokers, but he says Avinode would support the instatement of something similar to the International Air Transport Association, if only to educate the industry and encourage more transparency.

Worldwide presence

Avinode currently employs around 75 people. The number has actually been reduced after the sale of Wyvern Consulting, an aircraft safety business it acquired when it bought Charter X, in order to streamline its air charter operations. King says the company’s system now includes over 1,000 aircraft in Europe and 3,000 aircraft in the US – and sees an average of 200,000 charter requests per month.

Most of the company’s activities are split between the US and Sweden, but it has four bases in Gothenburg, Miami, Portland and Belo Horizonte in Brazil.

Charter forecast

While it kept relatively quiet at NBAA 2014, Avinode released a forecast for the US and European charter market in 2015, predicting a 3.5 per cent increase for US flights and a “modest growth” of 1.6 per cent in Europe.

“The US is experiencing its strongest run for six of seven years for Part 135 flights, which is much stronger than the fractional market,” says King.

But as the figures show, European aircraft operators are not performing as well as their American counterparts. “Over the last two years, we have forecasted growth for Europe,” says King. “Unfortunately, we have been too optimistic, as we have actually seen negative growth.” This year, Avinode is once again forecasting growth in Europe, but by slimmer margins.

King believes the “Russian risk” is having a definite increase on movements in Europe, with operators not flying to the same degree.

“The core economies have all had good traffic growth,” King says more optimistically. “Spain and Italy have also had positive movements.”

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