It is a truism that the best ideas are often the simplest ones. The sort of concept that makes you smack your forehead and ask "Why didn't I come up with that?" Victor falls squarely into that category. Variously described as online business-jet aircraft brokerage, a seat-trading platform or private jet customer aggregation website, there's an element of truth in all these. But a better way of expressing what it does is to think of it as bringing to business-jet users the sort of consumer choice and transparency price-comparison websites brought to the insurance market.
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© Victor Jet Victor allows customers to trade their business-jet seats with a pre-vetted web community |
Jet charter was previously a slightly opaque affair. Assuming you wanted an aircraft for a specific trip, you would contact a broker and they would get in touch with an operator and come back to you with a price including, more often than not, a hefty commission. But if you're a party of two people and all you are offered is a six-seat aircraft, you are paying to transport four-seats-worth of empty space. However, if you are happy to share the flight, Victor allows you to trade those seats with a pre-vetted web community, reducing your overall cost. The other side of the coin is that if you need a place on a business jet to a specific location, there is suddenly potential availability of single seats.
SERIAL ENTREPRENEUR
The man behind the company, chief executive Clive Jackson, is a serial internet entrepreneur, with a number of successful start-up businesses under his belt. And, as he is keen to stress, he has absolutely no connection with any aspect of aviation and therefore is not encumbered by a love of expensive metal.
Jackson's idea for Victor came when struggling airline BMI axed its London Heathrow to Palma de Mallorca service. With one home in Berkshire and another on the Balearic island - and a limited choice of alternatives - that presented him with a problem.
Chatting to fellow passengers on the final flight, Jackson found there was an appetite to share regular jet services from London to Palma. Frustrated by the existing charter market, Jackson saw an opportunity to bring his marketing savvy to the sector. This would simplify the whole affair, potentially cutting costs for existing private jet users while attracting a new set of consumers. It is, says Jackson, "bringing a new target audience to private air travel". Indeed, his research suggests that by bringing the cost of business jet travel down to a similar price to that of a business- or first-class airline ticket, the potential market for private-jet customers across Europe rises from 25,000 to 2.5 million.
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© Victor Jet Clive Jackson saw an opportunity to bring his marketing savvy to the business jet sector |
However, to bid on seats or to offer them to the market requires membership. Victor has 960 members, up from about 180 at full launch. At the moment membership is skewed towards seat buyers rather than those chartering aircraft, but Jackson is keen to point out the advantages it can offer to that section of the market, arguing Victor is "bringing a more attractive proposition to the charter perspective". Part of that is its flat fee of 5%, more important is Victor's underlying rationale.
"Our instinct is to aggregate user demand. That runs counter to where traditional [jet] brokers sit where, regardless of how competitive they are with their commission, by and large they will want to charter a jet per customer. We always look to aggregate. It gives those who want to be able to share their aircraft an opportunity to offset the cost and recoup their money."
The majority of customers come from the spot-buying broker market, Jackson says, pointing out they would have a time-consuming job of playing the field to research the best price available (with the equally time-consuming need to play different operators off against one another). Victor brings all that together. "It offers a much more transparent view of what is genuinely in the marketplace and therefore [customers] can make their own decision. It's completely transparent."
That transparency extends to revealing the exact details of aircraft that are available. Jet operators who have signed up to Victor - via a stringent vetting process and agreement with a binding set of terms and conditions - make their fleet lists available, including information on an aircraft's age. While not important to every consumer, there are clearly those who would prefer to travel on a newer jet. Jackson prefers to allow the individual to make their own decision, rather than taking it for them.
During beta testing of the site last year, Victor had 12 aircraft on its books. That number now stands at 220. "It's a good indication that operators are getting behind Victor," says Jackson. Expansion into the German-speaking market followed in early 2012. It is Victor's first foray outside the UK and since this part of the operation went live at the end of January membership has risen by 200.
It has also started to change the make-up of its membership. At launch this was drawn predominantly from the UK, but Jackson believes that by the end of the year this will have swung towards Europe; about 34% of its members are now German-speakers, he notes. Support for other languages will be added if there is demand, he adds.
EXPANSION PLAN
The expansion plan benefits from Jackson's experience with his Autotorq digital marketing business for the automotive sector, which was rolled out across 40 countries in Europe. North America will be next, followed by South America and then "shortly after or in parallel" the Asia-Pacific region.
With every airframer chasing business in the fast-growing Asian market, Jackson realises speed is of the essence: "It doesn't have [sufficient] aircraft at the moment but that will change. We need to be there in around 18 months [from January 2012] to put all the groundwork in place.
My job is to build a sustainable business to compete on a global stage. It's not just about having a good idea, but building a team that can put that idea into action."
To bankroll this growth, Victor successfully raised £1.5 million ($2.4 million) earlier this year via a private-placement, rather than venture capital or private equity. The placement was massively oversubscribed, says Jackson, and was completed in less than eight weeks which, he says, is a "major endorsement" of Victor. "The majority of investors are members or users of Victor and absolutely see why and how it's scaling [up] and decided to buy in," says Jackson. A second round of fund-raising may follow in the fourth quarter of this year, depending on how fast the business grows. It is currently tracking "about 20% ahead of target" based on a number of metrics, he adds.
Although there is a long list of potential winners who have benefited from Victor's launch, when you are introducing a "disruptive model", as Jackson describes it, to a market, there are bound to be losers too. "We are just taking what's out there and breaking down some of the barriers and shortening the process to cut out the inefficiency," he says.
"I think consumers and [aircraft] operators will be the winners, without question. If it is structured correctly it connects A with B. In that case, the winners are the consumers and suppliers and the middleman is squeezed, and that's your traditional broker."
Those brokers providing a "high-level of service" will remain, but as time goes by there will be a "rebalancing" of the sector, Jackson argues. However, he points out that Victor - and those products that will follow in its wake - will benefit the overall market by adding jet consumers. "This will drive up the number of aircraft in the sky," he says.
"In three years' time, existing charter operators will be flying more regularly because more people will be choosing to use private jets because they can buy by the seat.
However, Jackson adds that: "Just because I can afford to hire the whole aircraft doesn't mean that I should."
Source: Flight International
