The world of charter booking has been changing over the past few years and remains a hotbed of start-up activity for IT entreprenuers who see private aviation as a potential goldmine. Disruptive business models are all the rage, and at the end of the proverbial rainbow are business aircraft that are undeniably underutilized.
One of those believing it has spotted an opportunty is Cheltenham, UK-based Returnjet (Booth D065). AIN spoke with Steve Westlake, aviation director of Returnjet, only a couple weeks after a comprehensive briefing from competitor Stratajet, which also claims it is about to shake business aviation up forever by allowing online, real-time firm quoting.
Westlake said that Returnjet is different, more of a competitor for Avinode; in fact, he said it will be better than Avinode in the end. First, three-year-old Returnjet is free for users, consisting primarily of brokers (it has around 650 registered so far), whereas Stratajet seeks to supplant brokers and connect end-user passengers directly to operators.
“Charter operators can market their aircraft to more than 1,500 brokers,” said Westlake, a former helicopter pilot who later spent five years “helping NetJets resell blocks of hours.” He became a private jet consultant in 2012 before starting to think “the next step was to develop a global platform similar to Avinode, but free to use. Avinode is getting expensive.” At that point he met Mark Blanchfield, an IT entrepreneur who had started Returnjet (he is the CEO). But “it was focused on empty legs,” said Westlake. “I said, ‘You can’t run a platform just for empty legs.’ But he had the platform and had invested £500,000 [around $700,000] in it already. I said, ‘You need to make it free and user friendly, and then the brokers will use it.’” He said revenue comes from advertising from FBOs and other companies, rather than user fees.
“We have a tech team based in Romania,” he explained, “and they have turned our crude empty-leg site into a pretty good alternative to Avinode.” This has taken “probably another £1 million [$1.6 million] of investment,” he added.
The Returnjet Mechanism
Westlake said, “With our system, the broker will put its search in with all their criteria, and get a list of available aircraft. The system scans from the home base then outwards until it has 30 possible aircraft. The broker can select the ones he wants to consider and the system automatically sends out quote requests. “Then we have a team following up–most operators now have people on call 24 hours.” This level of availability, he suggested, had been stimulated by Avinode publishing operator response times.
“Through our platform we have a Skype channel where brokers can request documents etc. There’s no need for e-mails. Then a PDF presentation document is sent that the broker can send to the client as a proposal. You can do it all in a couple of hours.” He said that most operators could now provide quotes “within minutes.”
So with Returnjet all operators are available. “Avinode’s weakness is that you only have the operators that pay to be listed,” explained Westlake. He admitted however that “it’s hard getting through to the operators,” but once they use it once, they tend to use it a lot. Some even leave Avinode, he claimed. “Our big message is that Returnjet is free to operators and brokers.”
On a final note, Westlake said that Returnjet linked up with Argus to “launch our broker awards.” There are prizes every three months, one in the U.S. and one in Europe, for the broker booking the most flights using Returnjet.
Market Dynamics
Asked whether the market was getting a little crowded with online platforms, Returnjet aviation director Steve Westlake replied confidently that the broker platforms were all “competing for the end user” rather than just providing a database for brokers. “Stratajet, Victor, Privatefly etc…they’re all competing. And they have platforms they want operators to participate in, so there is a lot of demand on operators to give their availability to everyone. The hungry ones like LEA are happy to do it. But the downside is operators are bombarded.” He suggested that they usually got the same request from several brokers and platforms and “probably just give the same quote to all of them.”
He noted that in the U.S. there is CharterPad, “a competitor of ours and Avinode…and then you have JetHunter, which has some traction in the U.S. and is looking to come to Europe, and Stellar too…so with us there are probably five.”
So what is Returnjet doing here at EBACE? “We’re announcing a free-to-use API for brokers. It’s very simple, we give them the code and a search widget box for their website.” He added, “We hope that Victor PrivateFly and others will also use this and realize they don’t actually need to go to the operators themselves.
“Then about two months after EBACE, we will launch a fully-functioning app that brokers can offer their customers. They will even be able to brand it as their own. For example, Air Partner could do it, with our back end.” Could Avinode respond and start doing the same? Westlake admitted there was a risk; “Unless Avinode is prepared to give its data and technology away for free, we’re hopng we’ll be the go-to platform.”
One long-term goal, he said, is that all the players vying for bookings and providing new technology could stimulate demand, and perhaps create a whole new genre of business aircraft user. “Absolutely,” said Westlake.
He said that private clients could also register on Returnjet and seach for empty legs–it is not exclusive to brokers. ReturnJet spent a lot of time and effort developing its “empty-leg corridor technology,” he added. “It took us about a year to get it right, but if there is a New York-London empty leg and someone wants to go from Washington to Paris,” the NY-LON flight would come up and prompt a request to the operator to get a quote to use the aircraft. “We worked out that even a diversion to Iceland [to pick up paying passengers] would be cheaper [than going back empty].”
But he ended on a philosophical note regarding an oncoming juggernaut. In the end, Westlake believes that Stellar, a U.S. company “owned by two billionaires,” has the most potential in the online private aircraft booking arena. It can make deals with major travel sites such as Expedia and others and stimulate a new market for business jet access. “I think that further down the line someone like Stellar will [take over] the whole thing.” But in the meantime he believes there will be a few years when the also-rans can fill their pots with gold.
The opportunity that one big entity could take up, believes Westlake, is to “click and buy” from the operator, with no mark-up. “But we’re not there yet. The end user still can’t get the price [for free] from the operator. To do that, the quote would have to use the operator’s system,...so it would need to be flight-planning software.”
He sees the future centered with mobile devices; “Eventually it will be high-net-worth individuals on their mobile phone doing a search, and they’ll click and pay there and then. But it’s probably a few years until we get there. You’ve got to have the tech to give a fixed price the operators are also happy with.” He noted that operators can sometimes make very good profits from one-offs, and will be wary of losing out on the occasion when they are the only ones that can fulfil a particular mission.
