Lessons To Learn From Failed Jet Charter Start-Ups
Transparency is vital for survival in the jet charter business.
Having read the industry comments and posts regarding the state of the private jet charter industry, I am concerned. The general private aviation industry needs to shape up to a future that has and will continue to be influenced by past events, where many new ventures have collapsed, some in spectacular fashion and amplified by questionable practices. Such practises leave many – customers, investors, peers – struggling to make sense of the underlying economics and of a business model that may seem like it's too good to be truly sustainable.
In a matter of half a dozen years, I have seen jet charter providers including DayJet, GreenJet, Social Flights, BlackJet, Beacon, Ubair, and, late last year, Dutch all-you-can-fly start-up Jetwise all go down. This is a sorry and extremely sad state of affairs. Whilst most owner-founders believe that their ‘new model’ will revolutionise the industry, ultimately the evidence tends to suggest that it’s the customer that ends up losing serious money. This, in turn, causes the private aviation sector to lose huge credibility.
Several of the above companies were driven by the kinds of membership schemes promising the flier an ‘all you can eat’ service; others were based on the notion that you could ‘take out’ more than was put in. I have long held concerns around the logic of taking and spending someone else’s money before they have delivered back on the service originally promoted and promised.
Reportedly, that money is, in part, being spent with operators who, lured by the prospect of highly lucrative contracts, are making it harder for other industry providers to access their fleet. I have no doubt that should the flow of dollars stop, then an equilibrium will be restored. I suspect that several charter brokers are already finding successful ways around these day-to-day challenges. And will continue to form relationships with a wide variety of suppliers. We will see.
Most importantly, what we all must never lose sight of, regardless of our particular business model, is the simple truth that we all serve the most discerning customer group in the world; this, and the fact that customer service and experience is the only thing that counts. Get the underlying business economics right and your business will thrive.
Of course, people who charter want a good deal - who wouldn't? More than this, however, they want value. And value needs to be contextualised. In an industry long dominated by opaque ‘old world’ brokers and confused, today, by a bewildering array of ‘gym membership’-style models (many unclear in terms of what they’re actually offering…) value is often hard for the cash rich, time-poor frequent private flier to find. To them I say read the small print – is what you are being promised revocable? Also ask yourself the question – do you believe in the promise of a free lunch?
Victor’s user proposition is, on the other hand, simple and easy to understand. We are a ‘free to use, free to choose’ marketplace. There are no joining fees, no annual subscriptions and no concerns around restrictive conditions - with Victor, you fly ‘as you go’… on demand.
Transparency remains vital. Most importantly, if you can provide accurate, detailed charter quotes with information like the aircraft age, key features and tail number, you’re putting the flier in control, and allowing them to effectively research charter options, compare and tailor before booking the best flight option (quickly, easily) that totally suits their needs.
Transparency also extends to the guarantee of flight ‘protection’ charter providers should offer. The money customers give Victor for each and every charter is held in a client trust account with one of the world’s largest banks, so the financial protection is second to none. Add in robust aircraft and crew replacement guarantees, and high-touch customer support (24-7, global) and you, as the private traveller, know exactly where you stand – or fly. That’s a powerful thing.
As a serial entrepreneur with over 30 years’ experience, I recognise that trust is earned and not bought. When I launched Victor – my 14th company - in August 2011 it was in the principle belief that if, as an occasional jet charterer, I was going to reinvent the entire charter process, then trust and transparency needed to be top of the list. Other more frequent fliers whom I spoke to said the same thing.
Can a successful charter business afford to give stuff away or do ‘free lunches’? To my mind they need to combine a level of peerless service and private jet experience that, over time, builds a far stronger relationship with customers. Where frequent fliers are able to fly (and not fly) flexibly, and enjoy productive two-way dialogue with a charter provider then they are far more likely to trust that service and keep coming back.
Victor, for one, can’t sit still. Recently confirmed as an ARGUS Certified charter provider owing to the quality, integrity and effectiveness of our proposition, we continue to expand our geography and develop our technology platforms, all whilst deepening our commitment to the kind of responsible travel that genuinely improves lives and livelihoods.
Yes, I am saddened, then, when I read about customers that are voicing genuine concerns with our industry, and how they are being treated. I urge all within the private aviation community who may have a similar concern or grievance to air it but be responsible about what they communicate in public domain. We all have a right to ply our trade and voice an opinion but ultimately we should be thinking about how best to support our industry.
Following on from that, we need to think hard about who will eventually end up paying the price for the so-called ‘free lunch’. So, the question is, can you really afford to fly without complete transparency?
Clive Jackson is the founder and CEO of Victor (www.flyvictor.com), innovating global, on demand private jet charter through transparency, technology and tailored customer care.