A new model is emerging for buying private charter. It is informed, transparent, market-driven and technology-enabled. We have seen a number of platforms emerge – from airlines, pilots, air taxi operators and others – to assist with the procurement of private charter and address the empty leg conundrum; but now a technology entrepreneur has entered the arena who has personal experience, a full IT toolkit and the wisdom to put Victor at the centre of charter buying. Jo Murray met Clive Jackson, founder and Chief Executive Officer of Victor
Remember those halcyon days for private jet travel when the privileged and elite simply called their broker, accepted their advice, jumped on board and paid a bill? Since then, charter companies have striven to unbundle their billing, been at pains to demonstrate their airworthiness and made efforts to make available both their documentation and their fleets for inspection. But one cannot help but wonder whether the charter buyer is still a little in the dark.
This is a surprising phenomenon since in all other areas of our lives the market is taking a lead over suppliers. Now the community approach to buying and selling is filtering upwards, and Victor is a prime example.
Victor is what Jackson calls a “private jetshare community”. At its heart lies a simple to use and highly visual website, which hides a whole host of programming and algorithms that deliver what the charter buyer is looking for at the price he or she is willing to pay. Victor acts as the pivot between its members – a community of charter buyers and, crucially, seat buyers – and its partners – a host of charter companies who sign up to Victor’s terms and conditions to deliver consistency of supply.
The members are much like Jackson himself – buyers of air travel who are regularly let down by the airline community, are willing to pay to travel privately but are turned off by the upfront costs associated with outright aircraft purchase, leasing, fractional shares and jet cards. This leaves them buying flights from the charter market with all its diversity and complexity. And this is what prompted this highly successful technology entrepreneur to launch Victor in order to deliver a price comparison, booking and (importantly) payment platform to enable charter buyers to charter private jets on any route at any time at a cost they can happily bear and within an airframe that meets their expectations. “I came at Victor from the consumer perspective. I took the hope out of procurement,” comments Jackson.
The really clever bit comes from the ability the charter buyer is delivered (if desired) to sell surplus seats – on flights booked by him or her – to other Victor members. Thus, the cost of whole jet charter is dramatically reduced as more members buy seats and whole aircraft charter pricing is spread between more parties. In essence, demand is aggregated through Victor – not just in terms of definitive decisions to buy seats but also in terms of registering a desire to buy a seat on a specific flight at a certain price point. The market is now truly dictating the terms of procurement. Of course none of this detracts from the ability to procure whole aircraft charter – that is the simplest form of procurement through Victor.
Although this is all price-oriented, Victor is not a tool to beat the profitability out of private charter supplier – it is simply opening up the market to air travellers who might otherwise have sat on the tarmac for hours, waiting for an airliner to take off. Whole aircraft charter pricing is set by the charter company at a level with which it is comfortable. The value comes from marketing and filling more seats on that flight if desired. Partner operators should win through the use of Victor too – their revenues are set to shift upwards as their fleets enter a phase of higher utilisation.
Jackson is no newcomer to this way of thinking. He pioneered digital marketing with the establishment of Global Beach in 1993 and then cured the automotive industry of its inventory woes
through the launch of autotorq.com. Despite his previous success, Jackson has entered the private jet fray gently through a soft launch in March and full market entry in August 2011. To date, 335 members have already signed up. About one-third of these members were already flying privately, but they wanted to buy their charter flights through a more effective and transparent model. The other two-thirds are coming over from the airline community. Importantly, there is no membership fee.
The private jet fleet to which members have access through the partnership network currently comprises about 130 aircraft but that is rapidly headed towards 200 by the end of September. A 5% flat fee is charged on each transaction, and Victor will rebate 70% of all seat sale revenue to the original charterer, only delivering a return for Victor investment if it generates seat sales.
The aim is for the membership to leap up to 1,500 within 12 months. Jackson points out that Victor is doubling the rate of bookings every 90 days and there is a very high closure rate on quotes. In addition, if Victor senses a high demand for flights to accommodate a certain route on a specific date, Victor itself will put a chartered aircraft on standby which will shift to confirmed status once the demand reaches a critical level. By the fourth quarter of 2011, Victor will have a German operation in place. Next will come a North American operation and China and India are sure to follow.
What is delightful about Victor is not just that it is a new concept in a market sector that needs new ideas; it is that it will drive traffic. We all know that more charter hours mean more aircraft available for private charter – either through aircraft management contracts or through fleet procurement – and this means brighter prospects for manufacturing.