Over the past 25 years, the commercial aviation industry has seen significant change thanks to the introduction of what are known as ‘open skies’ agreements. They have deregulated the industry, allowed for increased competition on routes and thereby reduced prices. In contrast, private aviation is still stuck in an era where charter prices aren’t usually displayed on a broker’s website and when a rate is given it is up to the customer to find out whether all costs are included and who the operator is. The problem is magnified by the bewildering array of aircraft ranging from size and seats to speed and range. Fittingly, it isn’t governments that are opening the industry to competition, but the private sector, and one company is leading the way.
The current number of turbo-prop and private jet journeys taken to, from and within Europe is over 600,000 per year. Only three of the top 20 city pairs in Europe are pure leisure routes – 17 of these are dedicated to business travel. The company is Victor, and transparency is the hallmark of its online private jet charter service. It is a pioneer in a number of ways. Crucially, Victor does away with the middleman and connects customers with the aircraft operators. Clive Jackson, the company’s CEO, is championing transparency and regulations in the air charter broker industry. But rather than simply wait for legislation to come, he has elected to lead by example.
Transparency and pricing
Membership of Victor is free and no prepayments are required. Members get access to over 600 aircraft, which operate from 40,000 airports worldwide. But the company’s scale is just the start. The really unique trick that fuels Victor’s system is the pricing structure. There are no hidden charges and quotes give an all-inclusive price, along with actual photographs and age of the aircraft being booked. Members can compare quotes from leading, named operators, book and pay online.
This transparency puts power back in the hands of private aviation customers
This transparency puts power back in the hands of private aviation customers. This creates a price-point that is driven by supply and demand. Not only can members see the supplier, they can see how many suppliers are available to offer them a jet, to fly from A to B at any point in time. If there are several, they can expect to pay a good price, and if there are only a few, they can expect to pay a premium. In contrast, the usual business model can be used to maximise profit for the intermediary as commissions can vary widely.
“The way private jet charter is sold is unregulated. This is not financial services,” says company CEO Jackson. “There is no regulation about the amount of commission you can make, there is no regulation about the disclosure that you have to make as to how much commission you’re adding on or creaming off, and in fact there is no disclosure or obligation to say that you can’t get commission from the client and then also commission from the supplier.”
With Victor, buyers complete their purchase online and the cost comes to no more than five percent over the cost of the jet charter, rising to 10 percent with a bespoke travel planning service. That’s all made absolutely clear upfront to the customer. And customers aren’t the only ones who benefit from this unique company. Typically, when single journey legs are booked through brokers, the plane returns from its destination empty, unless customers have been found who want to travel on the returning aircraft. In this case it has always been necessary to charter the whole aircraft, but through Victor, members can also buy empty legs and offset their charter costs.
It is hardly surprising that many owners of private planes are concerned about reducing the running costs of their aircraft, particularly in the current uncertain economic climate, and as a result list their jets on Victor’s website. “Our clients are often highly educated individuals with successful track records in business, many of whom have created wealth by making sensible investments and business decisions. At the same time, nobody wants to feel taken advantage of,” says Jackson. In fact, it is this line of thinking which led to him coming up with the idea for Victor.
Jackson has the polished look you would expect from a frequent private jet traveller. He is a serial entrepreneur in the online space and in 1993 founded digital marketing agency Global Beach. It became one of the leaders in its sector, working with many Fortune 500 and FTSE 250 companies including Bentley, Canon, HP and Unilever. In 2001, he spun out AutoTorq.com, a new business providing bespoke dealer marketing and services to car manufacturers and their dealer networks, across 53 countries.
Victor offers access to:
Like many good ideas, the company was borne out of personal need. Jackson owns a second home in Mallorca and used to travel between there and London on BMI. The service was cancelled in 2009 and on the last flight he sowed the seed that became Victor. Frustrated that the airline was closing the route, he quickly polled his fellow business-class passengers to see how they intended to get to Mallorca in future. He left the flight with eight business cards and the idea of setting up a service which coordinated jet charterers on the island in order to offer a more luxurious way to travel there.
He was driven by the mantra of enabling customers to get more hours out of their day through the flexibility of private aviation. The service was initially offered through his website flyingmajorca.com but by the end of 2010, the destinations had expanded well beyond one island, and a name change was due.
Victor may sound like an unlikely choice but, in fact, the name is closely connected with the aviation industry. It is part of the NATO phonetic alphabet, but that isn’t the whole story. It is a name that works in 23 different languages and means the same thing. It really personifies the type of member that’s using the company’s service. The company recently secured a further £5m of Series A funding, with the main cornerstone investor being Jackson. His presence, along with the strength of the core product and plan, led to the funding drive being over-subscribed. Additional investors are understood to include a cross section of high-net-worth individuals, leading entrepreneurs and businessmen, investment bankers and hedge fund owners.
The company plans to use the funds to grow its team, invest in the technology behind its platform and expand the business beyond Victor’s original territories of the UK and continental Europe to Russia and the US.
“Europe, Russia, CIS and US are our priority markets for now,” says Jackson. “We recently joined the Russian United Business Aviation Association and signed a Russian cooperation agreement with Dexter (strategic partner of Vistajet in Russia), paving the way to launch our jet charter services on the Russian mainland.”
The company is also noticing a surge in the number of aircraft in Africa, so this may also provide opportunities for growth over the next five to 10 years. To take advantage of this, and fuel further international expansion, a Series B fund raising is planned within the next 18 to 24 months.
Up and running
More than 4,400 members – including large corporates and governments, live event customers, high-net-worth individuals and the who’s who of the entrepreneurial and sporting world – are currently using the company’s services. In just 24 months, Victor has generated in excess of 1,000 jet charter bookings and was ahead of forecast growth for 2013.
42 percent of genuine quote requests result in a booking, and 50 percent of all first time jet charterers book again within 90 days
42 percent of genuine quote requests result in a booking, and 50 percent of all first time jet charterers book again within 90 days, unseen in any element of e-commerce before. This is no exaggeration, as the typical conversion rate – the proportion of visitors who make a purchase – is reportedly only thought to be between four and eight percent for an internet giant like Amazon.
To further drive sales, the company is capitalising on the flexibility of private aviation by operating pop up services for travellers attending events like the World Economic Forum, the TEFAF art fair and Lamborghini’s Super Trofeo – the world’s fastest one-make motor racing series. Victor has also been confirmed as the private aircraft partner to Ryder Cup Travel Services for the 2014 Ryder Cup in Gleneagles, 23-28 September.
Unsurprisingly, these services allow travellers to pop up at the destination, often at very short notice, without having to divert from the fastest route or spend a night in a hotel. It suits the company to a tee and gives the traveller more time to enjoy the event.
In an unregulated private aviation industry, this impressive company is setting the benchmark for creating a fast, transparent and trustworthy service that challenges the status quo of the existing broker monopoly.