Business aviation’s paper ticket moment
Business aircraft charter is still reliant on brokers. In a guest blog for Corporate Jet Investor, Richard Koe and Andrew Charlton of Aviation Advocacy argue that the industry needs to be bold and change the way all flights are sold.
Speaking at the World Air Traffic Management Congress in Madrid In February, Tony Tyler director general of IATA, the airline trade body, threw down the gauntlet to the air traffic controllers. He said they need “a paper ticket” moment. The commercial airlines’ 100% conversion to electronic ticketing was hard, but has saved billions. What could air navigation service providers do to match that?
It is a good question. And it is a good question not just for the ATM industry. Commercial aviation´s business jet sibling, recession-prone for the last four years, could do with a comparable fillip. What is the business aviation industry’s paper ticket moment?
The challenge cannot be taken too literally. Business aviation passengers have never needed to brandish tickets to board their aircraft. Turning up at the terminal and in many cases driving up to the aircraft, embarking without any of the tiresome preliminaries of scheduled aviation, is a primary benefit of paying to fly private. The supporting coterie of assistants, brokers, operators, and ground handling agents are still faxing, scanning and enveloping the admin trail. The standardisation of scheduled airline ticketing is completely lacking but the volumes are tiny and passenger flow is unaffected.
To identify the business aviation’s paper-ticket moment, we need to think more broadly. Is there a singular achievement or initiative which would signify business aviation ‘coming of age?’ It might not save billions, and at this stage, where business aviation is only properly established in two continents, it would not bring global standards. What this sector needs is something more prosaic, intangible in terms of a single event, but recognisable in the general swell of opinion. In short, business aviation needs to be taken seriously beyond the confines of its own industry.
Being taken seriously means being taken at one’s word. According to its representative trade associations, this should inform us that business aviation provides an essential complementary air transport network to businesses and individuals. The arguments are well-versed, the evidence familiar, the lobbying energetic.
Yet the industry has not been given the benefit of the doubt. It is not yet taken seriously: the public view it as a rich man’s toy; governments see it as an easy luxury-tax generator; European regulators see it as ´general aviation´ and lump it into aviation only for want of a better pigeon hole.
Over the last decade, a number of trends have helped move the industry out of its niche. There is growth in Eastern European markets and increasing demand for very light jets and ultra-long range jets. The industry is much larger than it was ten years ago, not just in European and US mature markets, but in emerging regions in the Middle East and Asia.
Arguably, the rise of the BRICs works in the opposite direction. Newly minted super rich are snapping up $50m jets for cash, good news for salesmen but only reinforcing the ´wrong´ impression of what flying privately is about. At the other end of the fleet, the emergence of very light jets is positive. With price tags and operating costs at least 30% less than most light jets, VLJs introduced new price points for chartering aircraft.
Back in 2007, the air taxi revolution promised a turning point for business aviation. But it could not deliver in the ensuing recession. The early air taxi investors were unable to extend their credit sufficiently to establish large fleets. Without an extensive network, the taxi economics have not yet been put into practice. But pioneers like Day Jet have blazed the trail, and as the economy finally recovers, their successors will use economies of scale to offer private jet pricing at something approaching commercial business class. That will undoubtedly be a ´paper ticket´ moment for business aviation.
What is frustrating is that business aviation should not have to wait for the adoption of low cost air taxis to show that it´s business friendly. It is already primarily a business tool. The EBAA and NBBA´s claims should be demonstrable. What´s missing is the cast-iron evidence, and an engaging marketing effort. The evidence is out there; every business aviation flight is recorded and a snapshot of routes shows clearly that the majority are one day returns to distinctly non-vacation small airfields.
Every few years, market studies are commissioned, but the message is lost. These reports capture the macro picture but not the company-level argument. The data and technology available could be better put to work. Imagine a real time interface that captured all on-going business aviation movements and allowed easily demonstrable KPIs to counter the claim that business aviation does no heavy lifting. This would be a paper-ticket moment.
Even Commercial Aviation’s paper ticket era benefited for several decades from the pioneering computer reservation systems that later evolved into Global Distribution Systems (GDS). Business Aviation is yet to establish its own standardised GDS. Or even a GDS interface. Without one, retail ‘ticket’ purchasing needs the intermediation of many brokers, competing to negotiate specific terms and availability from individual operators. The launch of Avinode a decade ago has done a great deal to facilitate the brokers’ task. They aspire to being the GDS but are some way from centralising real-time available fleet inventory.
Moreover, whilst Avinode has facilitated flight brokerage, it hasn’t addressed the major bottleneck in the distribution channel: how can passengers more easily search, compare and book business jet trips online.
From the user’s perspective, business aviation is stuck in a different era to commercial aviation; airlines prompt complete travel options directly to their customers’ smart phones, whilst business jet operators wait for the phone to ring, then most need half a day to work out if the aircraft is available.
The good news is that the EBAA and others are thinking about these issues. This year, EBACE will include a session to discuss issues around distribution, moderated by Richard Koe, of Aviation Advocacy. He has been advocating work on a distribution system for some years and it seems there might be some traction. Adam Twidell from PrivateFly, Christian Hatje of Air Club, Clive Jackson of Fly Victor, Jonny Nicol of Stratajet, Oliver King of Avinode and Paolo Sommariva of FL3XX will be on the panel. All of them are deeply involved in these issues. It promises to be worth a listen.
Private jet flights aren’t commodities. The customised experience of flying non-scheduled is what the passengers pay for. But that doesn’t mean that every flight’s organisation requires an expensive, off-line concierge. In any case, e-commerce interfaces address complex and expensive variables in other service industries. There are now a number of charter platforms aspiring to do the same for business aviation. When they succeed, they will promote the real benefits of business aviation, currently invisible to 90% of the addressable market. Of all the near-term paper ticket moments for business aviation, this is likely to be the most significant.
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