At the forefront
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Posted Date: 01/03/2008
Issue: Executive & VIP Aviation International March 2008
Publication: Executive & VIP Aviation International
“We are standing at the forefront of a revolution,” insists Peter Leiman, Managing Director and co-founder of Blink. He and his co-founder – Cameron Ogden – use words like “pioneering” and “innovative” as they enthuse about their impending launch as a Mustang charter operator.
“Our core value proposition is that you blink and you’re there,” comments Leiman, explaining the branding. They rejected names that included words like “jet”, “executive” or “bird” because they wanted their name to explain the experience of private jet travel by VLJ rather than describe the process. Essentially, Leiman and Ogden have taken everything about the low cost carrier market that they perceive to be effective and applied this to their blank sheet of paper for the private jet market – which is, they say, highly fragmented and lacking in consistency of service, product or assets employed.
Leiman and Ogden are hardly veterans of the air transport business and yet they have put themselves squarely in a market that is entrenched in traditional values and comfortable methods of execution; a market that is not always receptive to change. They are Harvard Business School graduates with investment banker backgrounds who undertook a private travel proof of concept study for a Fortune 500 company and, so convinced were they by this research, that they decided to plug the gaps in the European executive air travel market themselves. Perhaps their corporate rather than aviation backgrounds allow them to see clearly what is lacking in terms of corporate air travel services. Time will tell.
For the last 18 months, they have operated under the radar, during which time they successfully completed a $30 million round of equity funding with European investors. Unlike some US players in the air taxi field, Blink has not spent time and money on building elaborate IT systems or seeking an air operator’s certificate (AOC); the $30 million is to accommodate the firm orders for 30 Mustangs that will come on stream at a rate of about one a month from May.
Blink’s imperative
With so many aircraft arriving over a two and a half year period, anyone else might be fazed by the path ahead, but Leiman and Ogden are confident their business plan is unshakeable. Perhaps key to their confidence is their partnership with charter and services company TAG Aviation (UK). TAG will operate the Mustangs on its own AOC throughout the 800 airport destination network the business plan will ultimately support.And the IT systems will come – Ogden assures us – but with one aircraft arriving each month, it is going to take time to build up an operation with enough scale to warrant elaborate systems and, when the scale is there, the IT requirements will speak for themselves and will be accommodated accordingly. After all, this is a “per plane” charter plan and not “per seat”, reinforces Ogden; this reduces much complexity from the operation.
Leiman insists this is what corporate Europe is waiting for. He says Blink will save on corporate travel budgets, save time, make travelling time productive and also accommodate a lower level of employee when it comes to private – as opposed to commercial – corporate travel. But why Europe? With private jet travel so mature and so accepted in the US, why launch Blink’s blueprint in Europe and not the US? Leiman points to the population densities of Europe, the range of the aircraft, the negative airport experience in Europe and Leiman’s and Ogden’s desire to be continental rather than regional players. Launching in Europe was a no brainer. “This is a tool,” reinforces Leiman. He says Blink will be quality of life improving and will increase productivity; and all this without having to pay more. Pricing will be half what a corporate would expect to pay today for a private flight; in fact the four seat travel opportunity will be priced comparably with four business class fares. For Blink, the race is on to be first to market and May cannot come soon enough.
Fleet selection
Anyone considering launching an air taxi operation in today’s environment has – compared with a low cost carrier – significant asset choice available to him and yet, for Ogden, the Mustang was the obvious pick of the bunch. “We are talking 80 years of proven technology,” he states. This is where established reputations and longevity can clinch a deal in today’s market. Ogden points to Cessna’s ability to stay afloat and the serviceability of the aircraft it manufactures. There are 12 Cessna service centres available to Blink as the aircraft require maintenance and this affords huge comfort to Blink as it embarks on its first forays as a charter operator.
Also, the operating economics of the Mustangs meet Leiman and Ogden’s approval and the short landing distance of the aircraft means it has access to a large number of European airports. This is important as Blink’s plan is to develop a primary and secondary hub system within identified European regions. So, for example, the first base will be Farnborough Airport – as you would expect with TAG as a partner – which will support secondary hubs within the region over time. The model will be replicated around Europe and perhaps beyond if the demand is there. Given that it will take time to build this fleet of Mustangs, Leiman is aware that although the brand should be heralded loudly, the management of the fleet as it is built requires a firm hand. “We need to introduce constraint into this network,” he says emphatically. After all, too much ambition in terms of locations too early on and the business could spiral to Blink’s future disadvantage.
Leiman and Ogden are clear they are going to have to manage demand. “We want to ensure we can deliver,” is their joint message. Blink is very much about providing a customised solution to corporate customers – in effect, they will operate, especially in the early days, as an outsourced corporate flight department. So with Blink the proud achiever of $30 million in equity and holder of 30 firm orders for Mustangs, is the company any more than an asset manager? The implication in this question is swiftly batted away. Leiman stresses that not only does Blink own the equity and the aircraft, it also has control of the customers. The partnership with TAG is very much like that between Air Foyle and easyJet in the early days of this low cost carrier’s operation, but the business is most definitely Blink’s.
Horizons
Anyone moving into the air taxi market is entering uncharted waters and yet the business imperatives are compelling and the mood buoyant. The challenges lie perhaps in the hangaring of so many assets, the training of so many pilots in an already scarce market and the dependence on the corporate world continuing to deliver shareholder value through enhancing private as opposed to commercial air travel.
Lieman and Ogden are up for the challenge.
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