Why Victor is winning the online jet charter debate
Three years after launching Victor, an online marketplace for business jet charter, Clive Jackson is still looking to shake up private jet charter. Now he has raised £5 million to speed up the disruption.
When Clive Jackson launched Victor, an online business jet charter site, in 2011 he thought he would get an angry reaction from the traditional brokers he was planning to compete against. He did not. They just dismissed his idea.
“It is all a waste of time,” said the sales director of one of the UK’s largest brokers in 2011. “No one will ever buy business jet charter on a web site.”
Three years later it is clear that the broker was wrong. Traditional charter brokers now see he is site as a real threat.
“Fly Victor was our third largest sole customer last year. To get to third in just three years is a really impressive achievement,” says Cameron Ogden, CEO of Blink, the UK air taxi operator. “They are really moving fast.”
Although it first launched in the UK, the site has also grown fast in continental Europe and Russia. One German operator adds: “The traditional brokers have not realised it yet, but sites like Victor are changing the market. They really are very important to us.”
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At the beginning, Victor targeted a lot of its advertising at people that have never flown on a jet, but many of its customers have actually switched from established brokers.
“Brokers probably think that their business is down purely because of the economy, but Victor has some really impressive customers and is hurting them,” says one business jet operator. “If you looked at Victor’s top five clients many of them were the top five clients of the top telephone brokers five years ago.” The operator says that these clients like the speed at which they can get quotes and the simplicity of booking flights with Victor.
Jackson says that many of Victor’s top 50 customers have switched from traditional brokers.
Blink’s Ogden adds: “If you think about it, at least with light jets, the online argument never really made sense. When you charter a light jet you are talking about paying about €4,000. The people who fly with us spend that much buying business class tickets on BA.com without thinking about it.”
The start of Victor
Jackson himself only started looking at private jet charter when airline BMI stopped flying between from London and Majorca, where he had a holiday home.
On the airline’s last flight back to London he realised that he was not the only passenger annoyed by the airline’s decision. When he got off the flight he had several business cards from passengers who said they would be interested in sharing a business jet.
Most people would have stopped there. But Jackson, a serial entrepreneur who has launched 12 companies, saw an opportunity to disrupt an entire industry.
“When I looked at the market closely I realised what an opaque service that charter brokers offer. You don’t see what aircraft you are necessarily flying, what commission they are charging,” says Jackson.
Victor, allows members (there is no charge for joining) to quickly source quotes, search available aircraft and book flights. When a member uses Victor they are guaranteed three live charter quotes within 60 minutes. The quotes include full details of the operator, its operating certificate and the actual aircraft that is being offered.
To be able to do this Victor had to sign partnership agreements with individual aircraft operators. It has done this with 114 operators – ranging from AC Aviation Charter to Zeptair – and now has more than 600 aircraft available.
Although charter brokers typically get quotes from Avinode, an online charter market place, they are not usually able to get back to requests as quickly as Victor (which also books through Victor). Victor’s partnerships with operators also allow it to give customers a lot if information on the operator and photographs of the actual aircraft that are available. Perhaps surprisingly, aircraft operator certificates and insurance certificates are some of the most visited pages.
“We as operators are having to learn to react faster,” says Blink’s Ogden. “But it is important that we do this as customers want this speed.”
Victor charges a 5 per cent fee on all business jet bookings (and 10 per cent on concierge services) and its quotes show this.
“We provide complete transparency. Members see exactly which aircraft they will fly on, who will fly it and how much commission they will pay Victor,” says Jackson. “This makes us very different to many traditional charter brokers.”
There is nothing to stop customers from taking the details and bypassing Victor to book direct with the operators. But they don’t. “We just don’t see this happening,” says Jackson. “We think this is because people trust the brand and because booking with us is very simple: Click, book, fly.”
“Our customers include 60 plus millionaires and extremely busy executive assistants who particularly appreciate the speed at which the site gets quotes back,” says Jackson.
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Victor’s original business plan has adapted. When it first launched, a lot of the focus was on allowing users to buy or sell single seats on aircraft and allow members to join together with other members to charter a flight (because of Jackson’s experience with BMI). Although members can book empty legs (flights where aircraft are empty as they fly back to their base airport or to another airport to pick up passengers), the business is now far more focused on more full aircraft charter with most customers booking an aircraft just for themselves.
Getting this far has taken significant investment. Jackson originally invested £1.1 million of his own. In February 2014, Victor went out and raised £5 million in Series A funding.
As well as the cash, Victor gained serious investors including Tim Richards (CEO and founder of Vue Entertainment, a UK cinema chain, and Andrew Pisker, a founding partner of Richmond Capital Partners and the former CEO of Dresdner Kleinwort Wasserstein.
“Raising the money was pretty straightforward,” and we did it fairly simply. Our Series B round may be more formal,” says Jackson. “The investors also sets us apart from some other start-ups whose lack of financial transparency and capital could put customers at risk.”
One of Jackson’s other companies is Global Beach, a web design firm, so Victor already has a strong site. But the cash from the funding round will be used to fund a new website, a mobile version and an app. Victor also plans to launch in the US in 2015.
Jackson adds: “I take the view that nothing we do is good enough so we are constantly working on a new range of tools. I am still a consumer at heart.”