Many technology companies seem content to ease off the disruption and innovation once the business has been acquired by another firm. But not Privatefly.

 

The latest product from the app-based charter brokerage – fixed-price charter between city pairs – may be its most disruptive yet. Although bought by Ken Ricci’s Directional Aviation last year, the company founded by Adam Twidell and Carol Cork in 2008, continues to innovate.

“Carol came from the travel industry, and her gut feeling is that one of the biggest objections people have to private aviation is the lack of certainty about pricing,” Twidell says. “When you book an airline seat you can get a price instantly, but with private aviation you have to wait for calculations to be made based on the amount of positioning time required. Carol wanted to see if we could increase demand if we offered people certainty of pricing.”

Last year, Privatefly tested fixed-price charters between London and Geneva for the winter season. The experiment was so successful that the concept has been extended to 10 city pairs this summer. Customers are able to book Nextant 400TIs to fly between, for example, London and Paris for a guaranteed flat rate of EUR4500, or Milan and Rome for EUR5000. The fee can represent a saving of up to 50% over peak summer prices.

The product is only possible, Twidell argues, because of the volume of business and the financial underpinning Privatefly now has as part of the Directional stable.

“Since the acquisition we are responsible for taking all of Flexjet and Sentient Jet’s customers in the U.S. and flying them in Europe,” he says. “With all of that extra demand we can now predict, with a lot of confidence, what days we expect higher demand, and how many flights we’re likely to have on these city-pair routings. So we’ve block-booked, in advance, a large number of hours for these trips.”

Twidell says the concept has been financially modelled to break even when all the block-booked hours are sold. The intention – and the expectation – is that extra capacity will have to be bought in.

“We’ll use the block-booked hours first, but on any day that we’re outside of the hours we’ve already bought, then we’ll go to the market to source [additional capacity],” he explains. “We don’t intend to increase the price – we intend to keep it flat. The more we sell, the more efficient we can be.”

The city-pairs promotion launched in April and take-up has been “fabulous,” according to Matt Barber, Privatefly’s director of European sales. Flights that are part of the deal currently account for 25% of all Privatefly’s bookings. “These [pairings] are based on some of our most popular summer destinations, so it’s not really a surprise,” he says.

“Our average flight is booked one week before it flies – but we’re solidly booked for the next three weeks,” Twidell says. “So we’re sourcing aircraft outside of the existing pre-booked hours for any other flights we’re selling in the next three weeks.”

The block bookings have been made with operators within the Directional group, but Privatefly does not enjoy preferential pricing.

“While we’re all under the umbrella of Directional Aviation, each company is entirely separate, and run as a separate entity,” Twidell says. “I’ve been able to get discounts, but only because I’ve committed Privatefly funds in advance. Whether we sell these trips or not, I will be paying a rather large bill to our sister companies, and our business relationship is exactly the same as any other aircraft operator.”

By the same logic, it follows that if a non-Directional operator were offering the most competitive product, Privatefly’s ownership status will not prevent the company getting the best deal for its customers.

“If a sister company is not offering the best rates we will drop them like a stone,” says Twidell. “Indeed, our top suppliers [across Privatefly’s charters as a whole] are not our sister companies. GlobeAir, Air Hamburg, Vistajet – they’re all very key partners, and will remain so. All of our key suppliers will be benefitting from the city-pair promotion.”

The promotion runs until October, though it is unlikely to end then – nor, Twidell believes, is it a type of product Privatefly will be the only company to offer.

“Why can’t we have this as a permanent fixture in the charter market?” Twidell says. “I really hope that our competitors and other aircraft operators follow. Because the more we, as an industry, can improve the ease of booking, the more customers we’ll all enjoy.”