Hi-tech help only goes so far
Adopting new technologies promises much. But just how revolutionary is the tech revolution?
IF THERE IS one thing many in the business jet community agree upon, it is that the sector is cripplingly slow to adopt new technology – particularly information technology. Speeding up the rate of uptake would help bring more customers into the market, help large operators become more efficient and improve their use of data, according to leading players in business aviation software. They agree that both operating and owning aircraft needs to be streamlined and that the way to achieve this is to digitise processes across the board. Doing so will bring a greater level of standardisation and transparency. It is safe to say, then, that there is room for disruption in the business jet market. However, this comes with its own set of challenges.
Corporate Jet Investor spoke to the heads of four companies trying to disrupt the way business is done in business aviation: Tim Ford, CEO of MyAirOps; Christopher Marich; CEO of MySky; Greg Jarret, co-founder of STACK.aero; and Paolo Sommariva, CEO of FL3XX. These people have several things in common – they know the business aviation market well and have seen firsthand the day-to-day challenges. And they are also united by a common goal: to make the business jet market more transparent and get data in the hands of clients quicker.
What is wrong with the market?
The first task when disrupting a market is identifying problems or weak points in the value chain. There needs to be a business case. If you can help either party save money or time at any stage in the process of owning or operating, they will be interested. With so many businesses still storing data across multiple pieces of software, across mounds of spreadsheets and across sheets of paper documents (Corporate Jet Investor not excluded), the time is more than ripe for tech companies to enter the market and come up with solutions to streamline the way we work.
“The spreadsheet is dead. Businesses have woken up to the fact that this does not give them the edge.” said Tim Ford, CEO of MyAirOps. Whether it be operators needing fast data on their fleets, owners wanting to know just how much they are spending at every step or even keeping pilots updated on everything behind the scenes, there is room for improvement in the ways that operations are run and in the ways that deals are done. The problems are apparent. Keeping track of every player at each stage of buying and operating, managing costs, managing crew and harnessing and utilising data effectively are among them. The question remains how do you solve them?
“The spreadsheet is dead. Businesses have woken up to the fact that this does not give them the edge.”
Blockchain is a decentralised digital ledger that makes a permanent and unalterable record of every change submitted.
Customer benefits
Let’s say you wanted to buy a car, you research models that suit your requirements within your budget, look at warranties and insurance, decide whether to buy new or old, find the right dealer, get the best price, test-drive and then put the money down. This is about the closest experience many who decide to buy a plane will have to the experience. So, when they have to choose where to register the aircraft, where to store it, who is going to service it, hire a pilot and even choose and engine-maintenance program, it is easy to be overwhelmed. This is a (by no means exhaustive) list of what you need to decide before you get the aircraft you want into your hands, but suffice to say that it is a long, daunting process. And many first-time buyers have little idea about what steps they need to take. The process lacks transparency and standardisation. Christopher Marich, CEO of MySky said: “Making jet ownership more transparent will benefit a lot of players. There are plenty people who say they would rather charter a jet 200 hours per year than get into the mess of owning an aircraft. I have also met owners who bought an aircraft and sold it after four months as the hassle of ownership was just getting out of control. “If I go to an owner and quote him a $45,000 repair for his right engine, he has no idea if this is a fair price, it will be based on intuition or whether he trusts me. There is no way he can tell if it is right or wrong.”
“Making jet ownership more transparent will benefit a lot of players.”
Ford agrees with this, noting simply: “There is a transparency problem in the business jet market.” Technologies such as Blockchain allow every single step of a transaction to be securely logged, without any fear of alteration. This allows all costs of owning, operating and maintaining an aircraft to be stored in one place for easy reference. “The only people who don’t benefit from standardisation and transparency are those making money from confusion,” says Ford.
Business benefits
In this age of instant billing, car ridehailing apps can, for example, give you a complete breakdown of price, distance travelled, and the ability to provide feedback instantly. It’s different in aviation -- when operating a jet there are a lot of hidden costs that are not immediately clear.
Keeping track of what everybody from the pilot to fuel supplier is doing is tricky and getting a message from one to the other is a convoluted process. “The main problem we solve is keeping everything on track in one single database.” said Paolo Sommariva, CEO of FL3XX. “We try to create a unified system to allow the manager to get a broad view of the operations in real time – something you cannot do with multiple CRMs and Excel spreadsheets.” The same can be said for managing transactions. Johan Seigring, cofounder of STACK.aero echoes a similar sentiment: “Having been in charge of IT systems at business jet companies in the past, there was just never a perfect system that could take care of it all. “But my goal was to try and build business operations systems that could take care of a transaction and build a workflow around that that takes you through the invoice and reporting and so on that will make your next transaction much better.”
The Luxury problem
Nowadays, you expect data on transactions to be at your fingertips as soon as you hit ‘buy’. You expect to track your order every step of the way and to have direct contact with everyone who handles your package. However, business aviation and getting an Amazon package delivered to your home or office are two different games. “A lot of people are coming in from the tech side trying to revolutionise the market. But their expecting to change things coming in from the outside strikes me as unrealistic,” said Marich. “It is a complex industry with lot of exceptions and a lot of different rules.” The challenge is just how you can disrupt the way business is done in a luxury market as highly regulated and as safety conscious as business aviation. Whilst business jet owners are getting younger and demand greater transparency and more streamlined buying processes, this could come at the cost of a lower quality of customer service than that which is required of a luxury market. Digitising the process eliminates the human element, it is almost in natural conflict with the very nature of business aviation. Greg Jarret, co-founder of STACK. aero: “The one thing worth noting is that, at the end of the day, we are in a luxury market. There is always a customer-service element here. Trying to do everything with technology is in natural conflict with providing good customer service.” This is the challenge disruptors face. The goal is finding the balance. Whilst all players may not agree on the answers, they think it is a question worth addressing and answering.
