JetSmarter - will it survive?

[Jetscream 32]

Free flying on corporate chariots that 90% of the time do not belong to the operator, and Jetsmarter buying empty legs at a good rate then selling them on a per seat basis....... Doesn't sound like a winning formulae to me?

Any drivers on here flying for operators on behalf of JS? Im sure it creates for some interesting passengers especially on the shuttles but really can't get my head around the numbers long term - and burning 50 / 100 mill USD will not take much time at all looking at the expansion plans plus a payroll of probably 500+ per month?

Anyone any experience?

[Global_Global]

Love the hype this creates each time that a new company sends out PR articles for this "NEW" idea....

Has never worked and never will work except for a crappy operator with an old clapped out cessna... But even they do this only once or twice until they have to deal with a "customer" that messes up his airplane or having to explain to these customers: sorry your plane will not be there as the owner changed the destination overnight and there is now actually no plane at your airport... Oh and the 50 quid you paid for your seat does not warrant a replacement aircraft

[Jetscream 32]

The marketing machine is definitely good, I'll give them that but just cannot seem to make it work, but clearly I'm missing something, and running "scheduled private jet services" / shuttles selling tickets per seat means they will be sailing close to the wind unless they have Bonds / ATOLS etc... A schedule is completely different ball game to running ad-hoc on demand.

My fear is the amount of new owners that may end up relying on the amount of hours they are giving to justify mitigating some of the costs..... and when they go belly up in a few months having run out of money.... some owners and managers / operators will be looking where they can make it up?? Still never a dull moment.

[ra4000]

My company run a bunch of schedule flights for jetsmart

[CEQforever]

I've looked at it twice now and still don't understand how it works or is supposed to work!

They pay a lump sum for an operator's empty-legs and market these to paying 'members'?

[ra4000]

I don't know the financial side works.
I think jetsmart paid for a bunch of hours,again not 100% sure.
What I know is they have a few routes that runs every week and even
with no passengers the airplane leaves.

[Jetscream 32]

Paying for flights with no one on them when you leave....... Yep guaranteed winner and excellent business plan..... sure here's another $50 million to burn I'm sure you know what your doing in this game being as your 27 and never operated a jet in your life, - but hey you've got some good friends in the Saudi's / Music business, and you've developed an "app" - absolutely stunning!

[CEQforever]

They all play with 'other people's money,' Jetsmarter, Fly Victor, Twitter, Politicians...

and if you've designed a new app, even better, you're sure to find 'investors!'

"Don't get cross, only be surprised"

[Bergkamp10]

Indeed, I have had three friends use a flight ZRH-LCY but I expect that that route will always have some empoty ferry flights. I.E. into STN/LCY/LTN/BQH area. thry paid GBP700 each.

I cannot really see how they make any profit margins. Do they use any of the OE AOC Management companies does anybody know?

[AfricanQueen236]

I am a member of JetSmarter and have used the service for a flight in the EU. The speed of communication through the app was incredible with all the paperwork being done through via the app. The JetSmarter concierge also made the relevant reservations for my business lunch and it was faster than using my Quintessentially service. I very much see this continuing to gain traction and as their database grows it will also spin out more customers for their ad-hoc model. I am certainly renewing my membership in November again.

[Fly4Business]

Will these business models survive is a big question. I am pretty sure they will if the business gets bigger. Right now it only works well in special case, but once the model is more widespread, benefit and stability becomes greater. Am I confident it will survive? No, aviation does face a lot of anti-lobbies and the outcome of that war is open.

[vikingarmike]

CEQforever, Fly Victor book real on demand charter at the going rates without subsidy using an App or Web online backed by a dedicated professional customer and flight support team. Ask any of the operators that provide aircraft to the on demand charter market. They also disclose the names of the Operators at the quotation stage to provide a transparent offering to the Booker by naming the Operator at quotation stage. How many brokers do this ? You would not book a hotel without knowing the name of the hotel would you? so why book a Citation Excel without knowing the name of the Operator and which Aviation Authority it complies with? It is bringing the way of booking aircraft in to the 21st Century negating the need to sign a paper charter contract every time you fly, by contracting online and bringing value to the market. Mike Ryan (declaring a vested interest as Commercial and Ops Director at Victor)

[Jetscream 32]

Surely every broker just like Victor has to make money and its not like anyone has reinvented the wheel here....
1. charter request from punter to broker
2. broker goes to operator marketplace to see who will offer best deal
3. broker goes back to punter with price plus a margin unless its already part of the quote from the operator.
4. punter is either window shopping or books
5 .not really rocket science

So is the jetsmarter model a threat to Victor Mike? what will be next???

Technology and the ability to put bums on seats is the only game for a broker... survival of the fittest no matter how big the marketing machine....

Meanwhile we'll keep drilling holes in the sky with the same punters in the back being booked from different brokers racing to the bottom in profitably just to get a client..

Love it

[Global_Global]

Meanwhile we'll keep drilling holes in the sky with the same punters in the back being booked from different brokers racing to the bottom in profitably just to get a client..

Love it

Spot on!

[fly22]

Apps are good marketing tools but doubt they will ever really work in the pj market. Too many variables for an app to deal with, crew duty, FET in USA never included on quotes normally, out of hours charges, parking restrictions, and it does not know if the aircraft will need a permit to fly (US operator departing Europe PART 135).

Jetsmarter buys their data from Avinode and their app makes the information look good. They do the same as all brokers do. Although Jetsmarter say they are not a broker that's exactly what they are just have an app. They go out for quotes through Avinode as all operators will have seen.

If you search a flight from Europe to USA for the next day on the Jetsmarter app at least 4 of the options are aircraft in US so no chance they could fly over and leave the next morning. App does not understand crew rest.

US operators are restricted on crew duty 10 hours flying so need heavy crew for a Europe to West Coast again the app does not know that.

Fly Victor also buys the data from Avinode so neither company is really reinventing the wheel just rebranding Avinode and that is never that accurate anyway.........

Jetsmarter are $52m USD in the game now which is not an insignificant amount of money - might take a while to get that back! Believe XO Jet are the largest benefactor on their purchase of empty legs in the US. Not many European operators have gone with their deal due to the terms of the contract. There are penalties if the operator pulls an empty leg. I am sure if operators wanted too they could be selective on what empty legs they offer Jetsmarter.

Jetsmarter are putting up their initial fee perhaps shareholders asking when the return is coming.

Will be interesting to see if they raise some more cash in the near future.

[mutt]

They are also operated a scheduled service from Jeddah - Riyadh at least twice a day, with weekend trips between Dubai and Kuwait.
With this type of service i wonder how long it will take them to burn through $50m

[Monkey Boy]

Apps are good marketing tools but doubt they will ever really work in the pj market. Too many variables for an app to deal with, crew duty, FET in USA never included on quotes normally, out of hours charges, parking restrictions, and it does not know if the aircraft will need a permit to fly (US operator departing Europe PART 135).

Jetsmarter buys their data from Avinode and their app makes the information look good. They do the same as all brokers do. Although Jetsmarter say they are not a broker that's exactly what they are just have an app. They go out for quotes through Avinode as all operators will have seen.

If you search a flight from Europe to USA for the next day on the Jetsmarter app at least 4 of the options are aircraft in US so no chance they could fly over and leave the next morning. App does not understand crew rest.

US operators are restricted on crew duty 10 hours flying so need heavy crew for a Europe to West Coast again the app does not know that.

Fly Victor also buys the data from Avinode so neither company is really reinventing the wheel just rebranding Avinode and that is never that accurate anyway.........

Jetsmarter are $52m USD in the game now which is not an insignificant amount of money - might take a while to get that back! Believe XO Jet are the largest benefactor on their purchase of empty legs in the US. Not many European operators have gone with their deal due to the terms of the contract. There are penalties if the operator pulls an empty leg. I am sure if operators wanted too they could be selective on what empty legs they offer Jetsmarter.

Jetsmarter are putting up their initial fee perhaps shareholders asking when the return is coming.

Will be interesting to see if they raise some more cash in the near future.

I think there's a lot more that goes on behind the scenes than relying solely on Avinode.

[HyFlyer]

There is a way of doing this...but it isn't magic, and doesn't hurt the operators long-term.
No free ride.
The new 'mass-marketing' capability via Apps and mobile phones is an opportunity, but you really do need to understand where the empty legs come from, who pays for them, and the needs of the owners and operators and the cost base of the industry before leaping in here. Fancy marketing is one thing, but careful, structured development of a reasonable service....offering a new concept to a new class of user, whilst respecting and acknowledging the needs and requirements of the current users doesn't make great copy...as it's a wee tad complicated to explain in a sound bite or headline phrase.

June....let's wait and see. Some are already involved here I suspect.

[Jetscream 32]

oh great .. another one coming in June - is that the stellar one?

IMHO there is not many operators that will allow a 3rd party app or company to decide where and when they fly. So matching empty legs to a requirement only comes together if the world is looking in the same place as a community and the empty sector doesn't interfere with original requirement either inbound or outbound. Currently all fairly achievable through avinode or return jet

Trying to build a business or an app on empty legs is utter fantasy and works for a very few people and certainly not the masses, and thinking there is a new market of unknown people is also a bit far fetched. High net worth individuals get their wealth typically through good business decisions and most start from zero and make their way up. Along the way because they are good at what they do, they meet others who have experienced private jets and then sometimes use them - thinking that private jets can now be operated en-masse for £200 a seat is pie in the sky. In the last 20 years, all I've seen is the same process:

1. New guy charters - hmmmm this is nice
2. Charters again next week.... hmmmm this is really nice
3. Speaks to us the following week down route on landing asking about costs of ownership / running etc.
4. Decides he's going to buy one but only if he can mitigate some costs of his own use through charter.
5. Gives to management company
6. Brokers start giving flights / timings and dates always change
7. Business aircraft are "time machines" they are a tool of flexibility and not schedules, the typical person that sits in the back is often time constrained and not flexible in their time - thats why you are flying them, when they are ready then we will try and sort with every trick in the trade to accommodate and get airborne.
8. Any new company that can read the minds of charterers and understand the dynamic schedule changes for flights before and after due to slippage in schedule or change of plan, along with crew rest, owners release, mx issues and the french striking then wow you must be close to god on that one!
9. The divorce papers are filed between him and operator due to lack of hours promised, additional costs he knew nothing about and a bunch of brokers trying to screw the operators whilst he is trying to balance the books of keeping the aircraft on its AOC and retaining crew that are paid a below par salary for the job they do, that is more valuable on the ground dealing with issues and CFMU often more than what is happening in the air, happy to be dicked around like a circus chimp, with talentless and useless management teams that are worse than double glazing salesman all the time expecting us to hurry up and wait.

Yep I can see that your new company in June is going to solve all this overnight.... yipppeeeeeee
But not trying to pour scorn on what you might be doing - no offence intended

[Booglebox]

Originally Posted by Jetscream

Trying to build a business or an app on empty legs is utter fantasy and works for a very few people

I disagree with your first point but agree with the second. I once worked with a company which used various unorthodox tactics to sell charter flights - they would put an imaginary empty leg on Avinode, sell it, and then sell the empty leg of the empty leg, and so on. They had a couple of talented chaps who seemed to be familiar with certain routes and could almost predict demand with uncanny accuracy.

A large factor in their success was that they didn't have to ask the aircraft owners to approve each trip; the owners provided their schedule in advance and the aircraft were free to be sold the rest of the time.

However, the entire thing mostly fell apart due to the reasons listed in your very well-put and entirely correct paragraphs #8 and #9.

In general, I think off-market charter can be a good way to keep aircraft owners, brokers, and charter passengers happy, while sticking it to inept management companies...

fly22, you make good points but I think the idea of the app is perhaps not to be a precise tool but instead to give the customer a general idea and then get him in touch with the sales team, who can then do the required sweet-talking. This is not a bad thing, as often customers have no idea what they want.