Empty leg selling

[starshiptrooper]

Thanks in advance for your comments. I'm doing a research project on the empty leg section of the private heli/turbo prop/jet market.

I know Avinode are the leaders in the jet market at the moment, but I would be interested and grateful to hear of any other companies who have tried to sell the empty/dead legs and failed/suceeded (who are they?) and for what reasons ?

Problem areas I see as follows :

1. If the already paid leg decides to cancel or change times considerable this could have implication on the empty leg if sold. What normally happens on these occasions ?

2. Do you sell the empty leg at the normal full price return journey or just the single leg price....if single leg what happens if problem 1 occurs ?


Thanks once again for you time.

Rgds

SST

[J32/41]

It doesn't really work that well due to the the 1st point you made.

If the original flight details change the empty leg just gets cancelled-simple as! The person who has bought the empty just gets refunded.

[Phil Brockwell]

I would disagree, the profits that come from combining 2 legs would more than cover the occasional loss of a principle leg that would be at least part covered by cancellation costs. I cannot think that of more than one operator who would drop a client because a front haul dropped off. Knock on delays are a natural risk of this type of op, but totally dumping a flight would be commercial suicide. I would be interested if you are aware of this happening, or if this simply an assumption?

Phil

[Suppers Ready]

When costing an ad hoc charter, empty legs are costed into the price.
Re selling the empty legs, it depends where it is going to. Generally you would sell empty legs cheaper than normal as they have already been paid for. It would be up to the empty leg buyer whether they took it one way or return
Re cancellation by the principal, it depends on the contract, how much is due when they cancel. Airlines will not run ad hoc charters unless they are making money on it. If the principal cancels and there is not enough money the whole thing will be cancelled. It would commercial suicide to run ad hoc charters at a loss. If the empty leg buyer could be persuaded to pay the price quoted to the original principal, the the flight would operate... then there would be more empty legs to sell!
FYi not alot of empty legs are sold - there is also a few websites for the sale of empty legs - just google it

hope this helps

SR

[Phil Brockwell]

SR, interesting to hear how your operation deals with one ways and back hauls, I guess we all do it differently. For my ops we price one ways at halfway the difference between the incremental cost of taking the charter and normal retail. This way the client gets a good price, I get good profits and can honour the flights on the occasional loss making flight if the principal falls apart.

In one month last year (August) we managed to sell 12 flights to the Med and gain 7 back hauls.

I assumed that everyone did it like this?

Phil

[starshiptrooper]

Thank very much for you comments so far.

The reason I ask is as follows. There is a company coming to the market in the next few months that offers the empty legs but with a very clever bit of software. The way is works is as such. Say an AOC is flying a one way Cardiff to Inverness then flying back empty. The AOC enters the empty leg on the online system (and his hourly rate cost of the particular aircraft), and other AOC's flying empty legs (hopefully) do the same all over UK.

Say Mr Rich Punter wants to go from Glasgow to Bristol, his broker would generally look for operators near either end of dest/dep to do this flight and Mr Rich Punter pays the whole return journey.

If the broker uses the system explained above the system automatically calculated the diversion costs of a suitable aircraft of all empty legs in the area to and from dep/dest airports and the system finds the one most suitable, if there are any. Negotiations then take place between broker and AOC of actual costs and who gets what. There is actually no reason to discount the leg as the Mr Punter knows no different, he gets an aircraft turn up and take him to where he wants to go. He gets his aircraft and the AOC and broker make more money and the company managing the matching system taked a fee.

If the original legs is cancelled the empty leg now pays for itsself and the AOC has another empty leg to sell.

Any thoughts ?

[Phil Brockwell]

Here we go again, similar things have been tried, there are a couple of points. Operating aircraft is complex and qualitative. The internet deals with transactions efficiently but fails to qualitate like for like products.

When people are looking for products that are not a like for like commodity they want to deal with a person with credibility that they can trust, using an operator that is safe and reliable is important.

I see this going down the same lines as onlineheartsurgery.com and engagementringsRus.com...there are some things peple will not buy on the net.

Phil

[Monkey Boy]

In my experience these things tend to fall over because they rely on operators keeping the information current. Fact of the matter is, they don't and people who use the site lose faith in it and then stop using it.
As Mr Brockwell says, there are some things that simply shouldn't be bought on the internet.

[J32/41]

Totally agree with the above facts that Phil mentioned, its all been done before.

:hmm:

[Flintstone]

I see this going down the same lines as onlineheartsurgery.com and engagementringsRus.com...there are some things peple will not buy on the net.



Bugger.:sad:


Anyone want to buy a couple of domain names? Going cheap.:E

[Global Warrior]

Theres a company called BizJet Express trying to sell seats individually on empty legs which is a novel way for operators to earn free money. Ive been watching them for a while and will continue to do so. Good luck to them.

GW

Oh, pull the other one, you smarmy lad - you work for BizJet Express (your email attests to this) and are abusing this forum's facilities by trying to punt your product. You tried the same thing in December. :yuk: I'll be watching you; try it again & I'll retract your privileges. 4HP

[starshiptrooper]

Thanks very much for your time and comments. If anybody knows of anybody who has tried this I would much appreciate their details or pm if poss as would be very interested in having a chat.

Thanks once again

Good flying !!

[Flintstone]

Oh, pull the other one, you smarmy lad - you work for BizJet Express (your email attests to this) and are abusing this forum's facilities by trying to punt your product. You tried the same thing in December. I'll be watching you; try it again & I'll retract your privileges. 4HP
:O :D Makes me laugh. 'Pwned' is the phrase I believe?

[Global Warrior]

I dont work for them........... i own the domain which is rented to them!!!!!!

[Phil Brockwell]

Is that a growth business? renting domain names?

[Global Warrior]

actually, yes, so is selling them..... ive just sold another for $10,000 that i paid £24.00 for 3 years ago.......... but its off topic..... which was about empty legs and empty legs are an undesirable necessity in the aviation business and many companies are trying to find their niche in marketing, selling and profiting from the sales of empty legs........ google it and you will find many. The company that rent my domain are one of those companies trying to establish alternative lines of revenue for aircraft charter operators and good luck to them........... whatever the modertor thinks

GW

[Flintstone]

....whatever the moderator thinks....

I wonder exactly what he does think?

After all, calling him "muppet" on a forum in which you presumably wish to remain is hardly the smartest move;)

[Global Warrior]

i think posting the way he did with out getting his facts right was not the wise est move on his part either......... however, i immediately removed the comment knowing it wasn't the right thing to do on my part........... but again its hardly anything to do with the topic which is empty legs...........

[Flintstone]

Perhaps it might be better to declare any vested interests in future? While you might not work for the company concerned you clearly have links with them, perhaps more than you admit.

As for insulting a moderator or what they have to say about topics it's quite simple. This is their site. If you/we don't like rules such as non-advertising there's always the red box with the white cross in the top right hand corner.

Thanks Flintstone. I've been called worse than a muppet in my time, in many cases, probably deservably so. Nontheless I can't stand by & watch crud developing, hence my intervention. Can we get back to the topic, if there's any merit in it please? 4HP

[Epsilon minus]

"wise est" ? Why is spelling so poor these days. I would suggest that the author of such poor English is the "Muppet" and for that matter why is name "Muppet" considered to be an insult? 4p moderator please disqualify this man for bad English.

[AlanM]

Being a mere ATCO I have no shares or financial interest in this.

However, I too saw www.bizjetexpress.com the other day.

Sent to me from a mate in the bespoke corporate hospitality world. They seem keen, as they have blue chip companies who have events too big to use BJE, but are always looking for ways to spice up a "Club ticket for 2 to Paris tomorrow" for smaller clients.

So are they up and running....? Anyone used them?

[trainer too 2]

Avinode, Charter x etc all have this function already and I agree with Phil, only a good broker with a reasonable number of flights can make it work. To sell it by the seat is almost impossible.

The website that is actively free advertising is very pathetic as it seem to have only the same one ways available and always in the same direction :)

[mutt]

Looked at the BJE website for dates between 09th and 17th, they are offering seats from Riyadh to Doha on a G4 everyday, cost is UK548.90.

But they arent offering ANY seats back? This doesnt make sense.....

Mutt

[Phil Brockwell]

Mutt,

I think that is the nature of one way selling, the other sector has already been sold.

Phil

[LB1985]

Looked at the BJE website for dates between 09th and 17th, they are offering seats from Riyadh to Doha on a G4 everyday, cost is UK548.90.

And are there really G4s positioning between RUH and DOH on each of those days?! Or the seemingly almost daily HKG-GLA service on a G550...

[mutt]

The concept of selling seats on the empty sector is easy to understand... But having only one way availability every single day doesnt make sense.

Mutt

[McHover]

Has anyone in Glasgow noticed the empty G550 that apparently visits Glasgow from Hong Kong four times a week?

If so I'm booking it just for the whizz... The seats are going for £825!!!

McHover

[starshiptrooper]

Going back to the thread.......if emptylegs selling is so unpopular why are the likes of avinode and charterx being successfull ? (I have absolutley nothing to do with these companies)

I do understand the problems with empty leg selling but someone is making money out of it.

[Phil Brockwell]

I don't think the empty leg selling is the main product of either charterx or avinode. What they do well is the recomendation of aircraft for a specific job. They sell out of position aircraft on a single day fairly well. They sell empty legs poorly, they simply list them so you can look through them.

The reason that avinode is so successful is that they have made it possible for people to do a basic level of charter broking without any real understanding of aircraft types and operations, they simply have an ability to generate enquiries and use avinode for the automation of what has traditionally been a skilled profession of sourcing the right aircraft for the job. It has split the market in 2. Operators who do a good job and work for the more skilled value added brokers, and cheap and cheerful operators who work for daft brokers (with some obvious crossovers).

So, to finally get to the point - Neither system is succesful based on selling empty legs, they are successful because they do an average job of finding aircraft for a specific job.

Phil

[rziola]

Chaps,
Has anyone actually used the company? Are they genuine? Not meaning to stir up a debate, but I do a fair bit of travelling into HK and there fare is cheaper than CX's from Lhr.

[J32/41]

It does seem very strange. I just can't believe there is a G550 that visits Glasgow from HK 4 times a week. :hmm: :hmm: :hmm:

[charterguy]

Are these guys for real ? BizjetExpress' domain has only been registered for 2 years, is hosted on a mass server alongside some other 2500 websites, and the legs offered are clearly not real. It shows empty legs in an Eclipse from Chartres to Fairoaks. Apart from the fact that Chartres is too short for jet traffic (even Cessna 310 twin piston cannot ops public transport out of Chartres), Eclipse has only just delivered a couple of aircraft, and none of them to Europe.
In my opinion this site has been set up by a dreamer. As Phil mentioned in an earlier post there are too many daft brokers. It's high time that the broker industry was regulated and bonded to ensure that the consumer is not at risk of losing his/her money. After all, carriers have to undergo a financial fitness check before they get their AOC and operating licence.
What frightens me most about Bizjet Express is the fact that you can actually buy one of these legs (they have a page that takes credit card payments). Scary !!! :=
CG

[Global Warrior]

Hi PPRuNers

BizJet Express has not officially launched yet. It has, however ,soft launched to start making the market aware of its existance. Yes i do have something to do with the site, even though PPRuNe promotes ANNONIMITY (4HP take note) but im not spamming as the moderator might think being as this is a thread about EMPTY LEGS. There is a thread about, for example GAMA and alleged employees of that company get to have their say without being called smarmy lads!!!!

BizJet Express IS BONDED. It is also in the process of securing distribution rights with the BIG 4.

All BJE are trying to do is find a way of marketing empty legs in a way that benefit A) the consumer, B) the Operator and LASTLY BizJet Express.

The business model is based on a free subscription for the operators to place their flights on the system. There is a 14 day credit facility in place whereby the operator that agrees to the terms and conditions of the site has to accept that they will not get paid earlier than 14 days AFTER the flight has taken place. THAT IS TO PROTECT THE CONSUMER.

The flights on the system at the moment may not be genuine, but i will pay a million quid to the first person that proves they have lost money based on the flights listed presently. They are there for people to get a grasp of what is possible and what may be available in the future. Basically its up to the operators if they feel this is a business model for them.

With Ebace coming up and the travel distribution summit following, BizJet Express are in a position to take advantage of the momentum and announce whatever achievements they have made.

The thread is about empty leg selling. So far no one appears to have come up with a panacea for that but people will keep striving to do so and i want BJE to be there with the rest, striving to pioneer empty leg selling successfully.

I appreciate all of the input, both good and bad and i also appreciate the moderators point of view. I accept that being as this is new people will have differing opinions about it. I fly virtually everyday during my rotation. A lot of those flights are positioning flights. Its a huge waste of a resource but we are not an AOC operator so i cant list our flights on there, sadly.

PPRuNe has never been a marketing tool for BizJet Express. 1 posts in 5 months, before this thread would prove that. But the thread is about empty legs so i do feel i have a forum to answer to based on the feedback from this thread.

There is a very small group of people trying to market a segment of the industry that is proving hard to market. I hope they succeed.

I can be contacted either via PM or the website.

Whatever position you take. thanks for taking the time to read this far.

Regards

GW

[charterguy]

BizJet Express IS BONDED. It is also in the process of securing distribution rights with the BIG 4.

Is that right ? How exactly are you bonded? Your company's name does not feature on the CAA site. Maybe you are a foreign national and are confusing the word 'bonded' with 'bondage' ? Two entirely different things :}

And who are the BIG 4 ? Are you talking about brokers here or are your talking about the BIG 4 (UK tour operators). If so, they are about to become the BIG 2 (4 companies merging into 2). If you a referring to the tour operators, I cannot see how they could possibly be interested in your empty legs.

Explain.

CG

[Global Warrior]

Dealing with aircraft of less than 19 seats BJE is exempt from having an ATOL. However, because it is selling tickets, the credit card processing company has stipulated compulsory bonding with a Financial Failure insurance company, the same as any tour operator has to do. Its not voluntry its compulsory.

The big 4 being Sabre, Amadeus, Worldspan and Galileo

May i ask that if you need to know more, please PM me because i really don't want to A) Hijack a thread about empty legs and B) be seen to be promoting something on this site which is against the sites rules. I do feel however that i have the right to reply.

All the best

GW

[Phil Brockwell]

And the operators are going to want to give 14 days credit to a start-up company with no credit history...I think not.
Phil

[Global Warrior]

we will see ;-)

meanwhile back at the empty leg ranch............ does anyone have innovitive thoughts about how to market empty legs in such a way that they can become productive and profitable............ other than charging the client for the empty leg and not earning additional revenue?

[charterguy]

As I said in a earlier post, you guys are dreamers. You are trying to dabble in a market you do not understand. This is illustrated by the fact that you are talking about distributing ‘empty legs’ via the 4 big GDSs. If a booking is made via a GDS you need to guarantee the availability which means reprotecting the passenger(s) if the flight is cancelled. And guess what, the GDSs will collect the payment from the travel agent and you’ll be waiting 3 months to get paid. I have yet to find an aircraft operator happy to extend 3 months credit to an internet start-up.

Empty legs work best for brokers and operators who have regular clients, and who have credit facilities with the carriers. Many of the empty legs are sold ‘last minute’, with little time to collect payment ‘prior departure’. We wouldn’t dream of selling an empty leg 3 weeks ahead of time, unless the operator had been paid in full. If the principal client needs to change his/her travel plans it would leave the ‘empty leg’ client without a flight.
You guys have obviously covered this in your terms and conditions of business. Your website states: -

8.5 In the event that Bizjet is unable to fulfil the Schedule, the Client will be entitled to a full refund on production of their receipt.

Reminds me of the terms and conditions of a certain Irish LCC. What about the ‘£1000 a night’ hotel suite in Cannes and the chauffeur driven limo that the customer might have booked and paid for ? Will you be refunding that to the client too, if his flight is cancelled ?

Your business model is flawed. If you want be in the aviation business and use the Internet to earn some money, why not collect and sell airline sick bags on EBay ?

‘Soft launching’ a website like BizJet Express gives the industry a bad name and makes the website owners look incompetent.

Start collecting sick bags.

CG

[Global Warrior]

Hi CG

Your post makes interesting reading but im going to first send my reply to 4HP to make sure he is happy with it and will get back to you.

All the best

GW

[Global Warrior]

Hi CG
Your posts make interesting reading and promotes a good healthy discussion.

Empty legs are usually generated and advertised at the last minute and in your opinion ……..

“Empty legs work best for brokers and operators who have regular clients, and who have credit facilities with the carriers”

By this very statement I’m assuming you are saying that the empty leg is advertised to the brokers to try and sell on behalf of the operator. So, for example if a Luton based operator takes a client to Geneva to drop him off, all things being equal, that operator will return to Luton……..empty.

The Geneva Luton sector has already been paid for by the guy that went from Luton to Geneva in the first place. So, currently, the operators advertise their empty leg to a selection of brokers, avinode and their own clients, to try to sell a one way Geneva Luton and if possible make yet more money by effectively being paid twice for the Geneva Luton sector.

Therefore an operator will say that he wants, lets say, £2,500 for the return sector. If the brokers sell it, brilliant! But if they don’t, the plane goes home………. Empty! Still, can’t complain too much because the operator charged a return price in the first place, so the leg was in fact paid for.

The possibility also exists that the next flight for the said operator is actually a Lyon Luton, so a quick pop over the hill and he is now in Lyon, laughing all the way to the bank because he has charged a Luton Lyon Luton but is only flying Lyon Luton. Yipee! More money. Less flying. If he is really slick he may even try and sell the Geneva Lyon leg as well, but if he doesn’t, the plane again…………………… flies empty.

So in the above examples, the operator is advertising his empty legs. He would be daft to advertise the Geneva Luton leg if he wasn’t reasonably confident that he was going to fly it. So he must be reasonably sure that the flight will take place but if the broker doesn’t sell it, he flies empty, an empty leg gone to waste. If the operator advertises the empty leg and a broker sells it and then the operator cancels it because the outbound leg passenger cancels, well thats just not good for buiness, so why did he advertise it in the first place? As the operator is going to get a short notice cancellation fee anyway, and probably 100%, he could just do the flight to keep he broker happy that sold the return and the operator also has an option to try and resell the outbound leg as well if he's quick, via whatever method he chooses.

The concept behind the formation of BizJet Express is that presumably, the operator would be happier selling 6 seats at £xxx one way, than holding out for £2,500 from one person / broker and not getting it and going home empty. So if he is going to advertise his empty leg anyway, why not do it on BJE as well?

The whole point of BizJet Express is that it provides a secure area on its website where operators that sign up can go and put their empty legs and sell seats on them. All of the flights that appear on the system once it is fully launched, will be the flights that the operators themselves are trying to sell, presumably the same flights they are contacting the brokers about above. Presumably the same flights they are reasonably confident they are going to actually perform, otherwise why advertise them in the first place?

BizJet Express does NOT GENERATE ANY flights. It is merely an additional facility for operators to try and market their own flights. The same flights they are asking the brokers to market. By offering the option of selling by the seat, BizJet Express is opening up the world of private jet travel to a far wider audience, if the operator chooses to go down that route. So the 14 days credit facility is actually for the additional income for a flight that actually has already been paid for. BizJet can’t distribute the funds back to the operator until the flight has been flown and for a period of time thereafter, in case of cancellations and the operator being slow to return the money to BJE which then just annoys the passenger who presumably doesn’t come back and help make the operators wealthier by buying another ticket.

When an operator puts a flight on the system, an e-mail is generated and sent back to BizJet Express alerting them to the fact that the trip has been generated. BizJet Express then markets that flight to its section of the community, a different section of the community, possibly that the brokers market flights to. So not only does BizJet provide a facility for listing flights for an operator. It actually helps to market them as well and it doesn’t cost the operator a penny, until a sale is made. And so in the above example, it is quite reasonable to assume that the Lyon Geneva flight is more likely to generate a by the seat sale than a one way sale from a broker, in my humble opinion.

All the best

GW

[Blissedup]

I was always led to believe that you couldn't sell seats individually, but that the charter had to be to one "entity".