Fancy flying off somewhere glamorous this weekend in your own private jet? Although for most of us a seat on BA or easyJet is more familiar, the world of private aviation is changing with new players – many of them SMEs – disrupting the business models of this hitherto very discreet world and offering seats at lower prices than ever before.
One of these is PrivateFly, a company that compares live pricing and availability for over 7,000 aircrafts worldwide via its own technology. Over the last few years as the world has moved out of recession, the private aviation market has grown rapidly with business people and leisure travellers taking advantage of the fall in charter fares.
Co-founder and CEO Adam Twidell began his career in the Royal Air Force, serving ten years as a pilot, where he saw active service with the UK Special Forces. He then joined the well established private jet company NetJets during a time of European expansion.
When he left NetJets he spotted an opportunity at RAF Northolt in north west London to set up a private jet hub, and launched a bid for this Ministry of Defence contract. But he soon realised that the MOD would be reluctant to offer such a high profile piece of work to a startup company so he took his venture to London City Airport where he led a joint bid that was ultimately successful.
This enabled Twidell able to see the industry from all perspectives – pilot, passenger, airport and handling agent. He soon identified the major inefficiencies in what was a fragmented market – 40 per cent of aircrafts were flying empty, repositioning themselves for their next flight. Speaking to customers, aircraft operators and airports, he saw the opportunity for a disruptive, technology-driven model.
“I had a lot of negative feedback from within the industry in the early days. I was told that ‘no-one will ever book a private jet online,’” he recalled.
“But as consumers, we were all increasingly using online price comparison technology to book other travel products, so why should private jets be any different? As a successful and profitable business model now, and with other start-ups entering the market, I am delighted to prove them wrong.”
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He remembers a “light bulb” moment. “I was in Nice, after flying passengers from London City Airport. I was due to fly the aircraft empty back to London, to reposition for another flight later that afternoon. I got chatting to a captain from another company who was preparing to start his flight, taking his passengers to London City. Both sets of passengers were paying twice as much as they needed to. It struck me then how our industry could become so much better at matching up supply and demand.”
He reflected on this situation for some time and eventually developed a business model that involved unifying the highly fragmented charter industry into one network, linking private jet customers directly to available aircraft and integrating the industry supply chain.
Twidell and his wife sold their home to raise capital for the new business. Luckily for the couple when they the company launched during the recession of 2008, already a new private jet customer was emerging – one that was both more cost-conscious and increasingly tech-savvy. As had been the case with the mainstream aviation market over previous decades, PrivateFly set out to offer greater accessibility, speed and transparency.
Today PrivateFly operates a very different business model to the traditional broker and is growing rapidly, doubling its turnover and bookings each year, for the last two years. It still offers an expert 24-hour team, but with significantly enhanced efficiency via technology.
In September 2011, it secured investment funding of £2m from angel investors, enabling it to expand. Since then the business has grown by 75 per cent each year, moving into new markets and developing its technology and marketing.
Meanwhile, a US expansion accounts for 20 per cent of its flight sales. A big break came in 2013, though. “It was a $500,000 multi-leg from the Middle East to Europe and the customer used our app,” said Twidell. “Here was undeniable proof that today's private jet customer is comfortable using PrivateFly’s technology – and when booking such a big flight.”
Since its launch in 2008, the business has grown rapidly and now operates internationally via web and app platforms, and in multiple languages. PrivateFly also operates B2B, distributing its services through corporate and luxury partners including Addison Lee, lastminute.com, Ten Lifestyle and Manchester Airports Group.
Last January, Twidell launched a dedicated US business and in May 2014 he was named by Aviation Week as one of the Top 10 Leaders of European Business Aviation, as the judges describing him a an “internet Pioneer”.
In December, PrivateFly announced that it was seeking second round of investment fundraising of £6m for further US expansion and technology development.
Although it has become more widely available, the private aviation market still appeals to a certain type of demanding customer.
“One owner was very concerned about their dog being nervous on the flight,” revealed Twidell. “So we received a long list of written instructions beforehand. This included pronouncing the dog’s name in a very specific way and always making eye contact and smiling broadly at it. Of course we were happy to oblige.”