{"id":192,"date":"2013-05-29T14:06:53","date_gmt":"2013-05-29T12:06:53","guid":{"rendered":"http:\/\/www.aviationadvocacy.aero\/blog\/?p=192"},"modified":"2019-07-23T11:50:17","modified_gmt":"2019-07-23T09:50:17","slug":"can-it-reshape-business-aviation-apples-and-oranges","status":"publish","type":"post","link":"https:\/\/www.aviationadvocacy.aero\/blog\/?p=192","title":{"rendered":"Can IT reshape business aviation: Apples and Oranges?"},"content":{"rendered":"Aviation Advocacy much enjoyed moderating the EBAA\u2019s seminar on IT tools in business aviation, and specifically, the potential for such tools to change the shape of the way in which we sell and organise business aviation services. It was an appropriate session for the 13th edition of EBACE; all the indicators are that the European business aviation industry needs some serious reshaping.\r\nOn our panel we had a number of leading IT providers, ranging from Avinode (Oliver King), which has been in the market for than 10 years, to the Air Club (Christian Hatje), which has only just set out its intention to offer an online B2C channel. In between, PrivateFly (Adam Twidell) has pioneered the private jet\u2019s consumer portal for 5 years, Victor (Clive Jackson) is hot on the heels, FL3XX (Paolo Sommariva) has successfully pioneered the industry\u00b4s first schedule optimizer, and Stratajet (Jonny Nicol) is on the brink of launching flight tracking and pricing software following a 12 month beta cycle.\r\nThese competing and contrasting suppliers certainly lack no courage. It may not strike someone from outside the business aviation industry as unusual to have online access to searching and purchasing flights. But within the industry, as Avinode attests, the initial proposal that operators, brokers and users start to switch from, or at least combine, telephone sales and internet searches receives a puzzled and sometimes hostile audience.\r\nThe same was probably true at the vanguard of e commerce channels for hotels, holidays and airline flights a decade ago, now long overcome by mass adoption of B2C and B2B online platforms. But the inertia in business aviation is particularly strong. After all, these are some of the most expensive and often complex arrangements available to purchase. That\u2019s why \u2018offline\u2019 brokers continue to thrive, and the biggest brokers simply don\u2019t see B2C models as a risk to their telephone-centric businesses.\r\nSo they\u2019re brave, and in the case of Avinode, adept enough to find an application which brings the efficiency of an online market place without taking on the traditional ecosystem through which flights are marketed and priced. As such, Avinode is now an accepted member of the status quo, and to an extent, it is being challenged as a vested interest by our other panellists, whose business models can only work if the traditional format is disrupted.\r\nAs PrivateFly made clear at the outset of our debate, its aim is to address the problematic fragmentation of the industry\u2019s distribution network. Why problematic? Because customers, whose experience of procuring as well as flying business jets ultimately determine the industry\u2019s prosperity (this is often forgotten in our sector). And fragmentation serves to provide these customers with a procurement process which is slow, expensive and inconsistent.\r\nAvinode get this problem of course; its platform consolidates myriad operators\u2019 fleets and provides at least a stamp of standardisation on a market place which any subscribing broker can quickly navigate. But crucially they did not and have not yet addressed the \u2018black box\u2019 within which customers and brokers fix a deal.\r\nFor it\u2019s within this black box that the perceived value of business aviation is won or lost; undoubtedly there are some brokers who play a valuable role in linking up customer to aircraft quickly and cost-effectively. Even if it\u2019s all arranged by phone, and in fact often only because it\u2019s all arranged by phone. But in most cases, incomplete knowledge and manual processes lead to delays and encourage hefty commissions.\r\nIt\u2019s arguable that Avinode have exacerbated the problem, lowering the barrier for brokers and magnifying the bottleneck between operator and customer. Both parties are frustrated as a result. But then again both are innately conservative and it will take time before they are willing to try out alternatives like PrivateFly or Victor in large numbers. Knowing the market will eventually tend towards a B2C platform, Avinode nevertheless need to start developing a plan B. That seems to be where Air Club fit in.\r\nOf course Air Club protest that their proprietary B2C interface, to be powered by Avinode, is not intended to destabilise relationships between member operators and \u2018our good friends in the broker industry\u2019. However it is more than obviously disingenuous to claim that the Air Club\u2019s direct sales are complementary to pre-existing broker channels. Perhaps they have in mind some sort of customer carve-up between the big broker beasts like Air Partner and leading operators like LEA, with the mass market of small brokers left to fall through the gap. Difficult to see that suiting Avinode though.\r\nStratajet and FL3XX make interesting counterpoints to the B2B versus B2C debate. Theirs are not so much e commerce solutions as fleet management hubs. Their contention is that online sales channels, on their own, are little more than catchy websites. They may improve the marketing of some operators over others, but ultimately they simply redistribute market share, rather than reshaping inventory distribution, or, more fundamentally, improving the business aviation product.\r\nThe proposition from Stratajet and FL3XX (whose services may be directly competitive in the way that PrivateFly and Victor are) is that only by optimising the many tasks and processes which coordinate flight allocation and management can operators wring out efficiencies and be more competitive. With an integrated operations hub, which makes the most intelligent decision in response to each customer request, operators have a genuine pre-requisite to make a difference with e commerce.\r\nThis of course requires a much bigger bite at the cherry; operators have to be persuaded to drop multiple legacy planning platforms to make way for the induction of a single 3rd party\u2019s planning hub. But clearly someone believes in them, for both have raised several million during a protracted software development and beta launch. And to be fair, Avinode have long seen the importance of bringing their operators standardised fleet management and pricing tools.\r\nThe flaw for Avinode is that the precision of aircraft designation and pricing is completely lost once in the hands of the broker which intermediates between their platform and the customer. By contrast, Stratajet claim to have the data and technology in place to mirror-image operators\u2019 pricing and pass it on with complete transparency directly to end users. This is the sort of \u2018super broker\u2019 approach which threatens to displace traditional brokerage altogether.\r\nWe finished our session by asking the panel to forecast the importance of IT tools for EBACE in 2016. Naturally all agreed on progress. The majority agreed that several solutions would start to work in parallel. Air Club is convinced it will break the mould fastest, and who knows, it may provide the tipping point for operators to coalesce; no one likes being outside the club.\r\nBut for the geeks to get more show-time than John Travolta, it\u2019s pretty clear they can\u2019t do it alone. Simply adding an online veneer to the status quo won\u2019t do much for the customer. The challenge is to harness efficiencies in the operators\u2019 engine room and ally that to effective e commerce. If that\u2019s cracked, the traditional distribution network will simply subside, as it has done in the many comparable industries from which business aviation should now take a leaf or two.","protected":false},"excerpt":{"rendered":"<p>Aviation Advocacy much enjoyed moderating the EBAA\u2019s seminar on IT tools in business aviation, and specifically, the potential for such tools to change the shape of the way in which we sell and organise business aviation services. It was an appropriate session for the 13th edition of EBACE; all the indicators are that the European [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[8],"class_list":["post-192","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-richard-koe-business-aviation"],"_links":{"self":[{"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/posts\/192","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=192"}],"version-history":[{"count":5,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/posts\/192\/revisions"}],"predecessor-version":[{"id":866,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=\/wp\/v2\/posts\/192\/revisions\/866"}],"wp:attachment":[{"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=192"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=192"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.aviationadvocacy.aero\/blog\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=192"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}