There has been a lot of talk and action to consolidate Business Aviation over the last 10 years. M&A Teams have worked hard to create larger groups that aim for two major goals:
1. Creating a fleet large enough to create synergies across that fleet, thus reducing empty legs; and
2. Reducing the overall cost of aircraft operations by increasing the group’s buying power
Yet, there seems to be a new breed of aircraft operators just starting out that exactly aim for the opposite of what the large consolidators offer:
Small Fleet & Personalised Service
These ‘boutique operators’ promise a highly personalised service to their clients. They expressly aim to not grow to a large fleet nor growing quickly so they can offer the best service possible to their clients.
And with the consolidators seemingly having lost some momentum in the quest to swallow up more operators and revising down profit forecasts, I believe this new breed of operators is on to something.
Yet, I also believe they need to focus on two major trends in the industry, in order to stand out and pull away from the flock:
In Business Aviation, we have been somewhat reluctant to embrace new technologies that could make our business more efficient. Technology is not something that takes away jobs but merely allows us to automate repetitive, costly tasks and focus on what is truly important in our everyday roles: speaking to our clients and making them happy.
I would argue that even the larger players in this industry still have not fully embraced the technology that is available to them. If a boutique operator decides to build their operations on a strong technology backbone, it can truly find its way to the very front of the industry.
Buying Power through Group Purchasing
While I have heard the phrase ‘our clients do not really care about what their flights cost’ on numerous occasions, this is a concept that is very hard to grasp for me and I believe this could not be further from the truth. Our clients are the best of the best in the business world and it is not in their nature to pay more for a service than they should. They want value for their money.
This is exactly why I believe Group Purchasing in Business Aviation will become a pillar for smaller boutique operators. It offers them the ability to combine a highly personalised service to their clients with competitive operating costs, catapulting them into to the very front of the value offering to clients.
An unstoppable combination
If these boutique operators can fully embrace a combination of personalised service, technology-driven, streamlined operations & great operating costs, they will become unstoppable.
Group Purchasing may still be in its infancies but judging from the trends we are seeing in the industry, it is certainly a concept that is here to stay as it supports the very core of the industry: Boutique Operators.
Post written by Irena Deville
Co-founder & CEO