Aviation Marketing Intelligence

Nothing makes one as smug as seeing news that you were right.

One of the benefits of aging is gaining that increased confidence of being able to smell trouble, point it out and know you’re right. When you make the right decisions, you get to avoid all the pain, headache and cost of those grander blunders you might have made in the past.

While mistakes cost us a lot, the key is surviving and learning from them. This is what makes the subject of Sentient facing liquidity problems so interesting. How could you be slow paying your vendors when you’ve already collected the money up front?

It might be because the mistake department was not sufficiently consulted before ambitions department started making sweeping changes how the money was spent.

Our firm gravitates towards folk who understand the importance of marketing, branding and scalable business models. Brokers (large ones especially) get it when it comes to finding and retaining customers. The question is, when you get all your money up front, make a fair margin per transaction, how can you then wreck the business? With solid financial backing, a strong brand and more MBAs than you might need, how…. how could you get it so wrong?

The only possible explanation is CKS a/k/a Captain Kirk Syndrome:

Go into areas you know nothing about, and don’t just do it… do it quickly, with lots and lots of money. Buy Part 135 certificates, aggregate as many disparate operators as possible under one roof, one brand, and then.. and then… What do you have?

A large group of jet owners on various certificates, who were all promised different things who gradually leave your certificate to go somewhere else. After all, nothing really keeps you prisoner when you are a jet owner. Let’s review some of the commandments of building a business, and see how breaching them can cost you.)

Charge more than your cost.

Yes, we’ll admit…. sometimes you must fly a trip at a loss, but you do this because it is the right thing to do and you see more money over the horizon with that one client by putting your client’s interests first. The rest of the time you are charging more than your cost.

Price is not a DIFFERENTIATOR

Don’t make your companies shining differentiator “the price.” Make it the experience, the sushi, the banter you’re so good at … ANYTHING,… but don’t make it about price. The largest retailer (NetJets) of private aviation services in the industry charges obscenely high prices. Think about that - the company with the largest market share in the private aviation industry is also the most expensive.

Cultivate a Cult (of Loyalty)

Apple does it and yes, NetJets does it. But we can agree, there isn’t much loyalty in the space outside of a select few customer groups. How do you build it? Start by sticking by your clients when it counts, they’ll remember that. And… if you’re a broker, pay your vendors quickly and without haggling over how the trip went. If you get a bit slow on paying your vendors… woe unto you.

Don’t Spend the Deposit

This is called pulling a “Flighttime.” They actually burned their vendors (those who flew the trips) then failed credit any money back to their customers, who had entrusted them with a token of their trust - a couple of hundred thousand dollars.

Flighttime faced many similar problems when they had the same “spend what you don’t have problem” in June 2002. (This was a free mistake department for Sentient to consult, incidentally. Sentient used to compete directly with them under the name Ebizjets in that era.)

A larger question might be: Why does this keep happening? And what conditions allow the growth of such brokers? And why is so much business in this space flowing through the hands of brokers?

The prototypical charter operator doesn’t have a big marketing budget, and frankly isn’t comfortable “investing” in one. It is seen as an expense, rather than a life line. When you aren’t prepared to make an investment, for your own pipeline of customers, you are left with one choice - getting all the work you want, at a discount rate, from a firm who controls the key relationship.

On any given day 50% to 90% of the revenue of the Part 135 industry flows through the hands of someone else, before it gets to the company that operates the airplane. Imagine that: An industry that may have more middlemen than actual providers.

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