The Business Aviation Charter Market showed positive signs throughout 2011, with increased flight activity in the US and continuously strong demand from Russia and Turkey driving the European market. This trend appears to have continued into 2012 with a steady demand increase. Seasonal patterns have continued as normal through the early part of 2012, despite changing consumption trends, which includes a general downgrade trend in the upper market sectors in the U.S. market and an increasing high end with a decreasing lower end in Europe where heavy jets are gaining favor as light jets are slowly beginning to descend from their peak.

Operational effectiveness, which measures the percentage of total flight distance that an aircraft spends empty, has also been seen to vary from region to region. Aircraft in the United States and Russia experience far less empty sectors then those in Europe where aircraft generally have to fly long stretches to pick up passengers. Due to the abundance of available aircraft across the United States aircraft generally have a lower percentage of empty legs, as it is unlikely that a client would need to source a flight from outside of their own region.  Russia, on the other hand, can attribute their low percentage of empty sectors to the vast distances of travel and the plethora of the aircraft near demand centers.

Of those regions compared, Europe has been found to be the least effective. This is due in part to the pull of demand from the East, where, in order to capture business, jets from Europe travel great distances to pick up passengers from Russia, the CIS, Ukraine, and Turkey. Another contributing factor in the low effectiveness score, is the fact that European operators more frequently tend bring their aircraft back to homebase after every mission, in contrast to operators from the United States who are more likely to float their fleets in order increase effectiveness.

With the EBAA showing increased interest in strengthening operational effectiveness in Europe it is important to address these discrepancies. Building on the lessons from more effective markets, it is easy to see that increased taxi time is not only more environmentally friendly, but leads to both increased revenue and an enhanced competitive edge against the commercial sector. In essence, with a higher percentage of passenger legs operators stand to make more money per hour, but spend less.

About Avinode
The Avinode Marketplace is the world’s leading tool for buying and selling air charter online. Over 6,000 aviation professionals use Avinode daily to buy and sell charter flights worldwide. More than 3000 aircraft are currently listed in the marketplace, which features online quoting, availability reports, integrated scheduling, empty leg reports, and safety data.Avinode also provides up-to-the-minute market data and trend reports for the charter aviation market through Avinode Business Intelligence. Avinode’s weekly Business Intelligence newsletter features trip demand, availability, and pricing indexes, as well as, popularity reports for the most requested aircraft models, most frequented airports and the most traveled routes.Corporate headquarters is in Gothenburg, Sweden with two sales offices in the Americas, Avinode Inc., in Miami, Florida, USA and Avinode Latin America in Belo Horizonte, Brazil. For more information, visit www.avinode.com

“Over the past 6 months we have completely rebuilt SchedAero to meet the needs of European market.” Says Niklas Berg, Managing Director of SchedAero. “We have over 100 customers in the US and we are really happy to be able to give Europeans the opportunity to take advantage of the software as well.”

As an online flight operations system, SchedAero is a new concept in the market. It allows the operators to manage their entire process online, from a broker’s trip request to the pilots filling in their flightlogs. SchedAero is also fully integrated with both the Avinode Marketplace and Wyvern making it easy for smaller operators to keep their workflow streamlined and ensure that they are always compliant.

”We introduced SchedAero to our flight operations in 2011, and quickly discovered the advantage of having a complete system that integrated our operations with customers, flight crew and sales brokers.” Says Mats Ferm, Flight Operations Manager at Bluelink Jets. “In an instant, all company personnel and customers involved in the operation could easily see the booking, the sales brokers all over the world could get quick quotes and we have received positive feedback from all regarding the system.”

The tool is built for smaller operators and has no upfront cost for installation, which makes it easy to get started. The system has also been updated to look and feel like Avinode and those with both Avinode and SchedAero memberships can easily switch between applications without having to login again.

“This is the next big thing for Avinode Group.” Says Niclas Wennerholm, CEO of the Avinode Group. “ We are not only committed to building a robust application, we are also committed to bring our clients the best service and support.  With offices in three time-zones, there should always be someone available to assist our members.”

SchedAero is a wholly owned subsidiary of Avinode Group and will reveal all of its features at 14:00 on Monday May 14^th in the Avinode booth (#749).

About SchedAero
SchedAero is an online charter sales and operations management system and wholly owned subsidiary of Avinode. For more information, visit www.schedaero.com

When Avinode launched its website in 2002 business aviation was ripe for change. Decades of paper-based processes and phone-based sourcing methods had left the industry languishing in the 20^th century, but Avinode aimed to change all that.

“In 2002 the phone book and faxes were the best possible ways of finding an available airplane, but we had a hard time understanding why it should be so complicated,” Says Avinode Co-founder and Managing Director of Marketplace Americas, Per Marthinsson. “Avinode was founded with the conviction that this needed to change and that operators and brokers were waiting for an easier way to find each other.”

The idea behind Avinode was simple; make air charter available by bringing buyers and sellers together in a state-of-the-art online marketplace.

The project got off to a humble start in January of 2001, as the three co-founders began creating a system that would meet their bold vision. In September of 2002, after nearly two years of work, the system went live launching 45 brave companies into the 21^st century.

In the ten years since it opened, Avinode has grown from a clever aircraft search engine into the world’s leading system for sourcing private charter, spanning some 80% of the global charter market.

“The key to success has been Avinode´s long hard work establishing a truly global network of professional buyers and sellers by focusing on relationship-building,” says Avinode Co-founder and CEO, Niclas Wennerholm, “and by training clients to understand the advantages of doing business electronically. We are a technology company at heart but our products are driven by the real needs of real people.”

Early expansion of the system included a number features aimed at streamlining the overall workflow such as integrated quotation tools, a built-in message center, and tools to support direct integration with members’ fleet management systems.

At the same time the system saw the appearance of new products meant to help members expand their reach. Products like Avinode Link and, its descendants, the Avinode Web and Mobile App family, have helped to increase visibility for both marketplace member companies, and the industry as a whole, by enabling Avinode members to offer real-time search and request functionality, powered by the Avinode Marketplace, on their own websites.

In addition, Avinode also expanded its product offerings to data, with the creation of its Avinode Business Intelligence unit. This unit was initially geared towards providing data to Avinode members, but after only three years, Avinode BI has already succeeded beyond the company’s wildest dreams. Today it provides data not only to Avinode members, but also to aircraft manufacturers, FBOs, trade organizations, and press, education, and financial institutions.

Then in 2010, Avinode took another leap forward when it acquired the U.S.-based marketplace juggernaut, CharterX. This year’s New Marketplace launch marked the integration between the Avinode and CharterX systems, which has effectively brought the substantial U.S. and European business aviation markets onto the same platform for the first time in history.

“After 10 years, we are still only at the beginning of all the great things we can do to improve efficiency and profitability in the business aviation industry,” says Avinode Co-founder and SchedAero Managing Director, Niklas Berg. “I’m really excited about the future”

Join Avinode Co-founders Niclas Wennerholm and Niklas Berg, and the rest of the Avinode team in the Avinode booth (#749) at 5pm on day two of EBACE to join in the celebration.

When Avinode acquired CharterX in 2010 there was strong demand from the US market to fully integrate the two companies’ systems. After a thorough development process that demand has been both met and exceeded. The updated marketplace lays a solid foundation for future advancements in system technology.

”Two years of hard work has resulted in a faster system that will be of great advantage to all of Avinode´s users. The integration of CharterX into the new Avinode Marketplace has vastly increased the amount of information available, so it is now a one-stop-shop for the global market.” says Niclas Wennerholm, CEO of Avinode.

Among the exciting new features in the Avinode Marketplace is Trip Board, a product that serves to turn the buying and selling dynamic on its head. Trip Board allows users to post a requested itinerary and receive quotes straight from operators. When used in conjunction with Avinode’s powerful and accurate search tools it gives brokers even greater opportunities to easily find flights and helps operators take a more proactive stance in marketing their aircraft.

“During the development process Avinode refined many of the most widely used system tools. We have also updated user models and permissions to give our users more control of their accounts. This new Marketplace is now truly a one-stop-shop for sourcing air charter worldwide, with the most accurate pricing and availability information in the industry,” says Oliver King, Managing Director of the Avinode Marketplace.

Step 1: Define your routes
The first thing you need to do is to define three routes from your home base area that you would like to use as your benchmark. Your best bet is to use your historical travel patterns to define this standard. If you don’t have an internal system for tracking then defer to your industry knowledge and go with what you feel is best.

Magnus recommends: Use at least 3 routes traveling in opposite directions, because the competitive landscape changes depending on your direction of travel.

Step 2: Identify your competition
The second step before performing your searches would be to define your top three competitors for each route. Use the same methodology as you did for defining your routes. In other words, if you have historical data on your biggest competition for each route you should use those operators. If not, then defer to your industry knowledge and go with your gut.

Step 3: Fire up Excel
Once your routes and competitors are defined, open up an excel file and add three sheets, one for each route. Then add three trip types on each sheet, one-way, round-trip with same day return and round-trip with a return two days after departure.  Add the following columns for each route and trip type:

Once the excel structure is built you’re ready to log into Avinode to make use of the full power of Avinode Search.

Step 4: Log in to Avinode
Once inside the system go to Aircraft Search and begin performing your searches.  Perform the searches route-by-route starting with the one-way search. Set the departure date 3 days from the current date then put in your specific route, departure time, and aircraft category. Then hit search. Scroll through the search results and add all the information into your excel spreadsheet.

Next, perform the round trip search with same day return and add that data to your excel file. Finally, perform the round trip search with return 2 days after departure and add the data. Then start over with your second route and so on.

Step 5: Analyze the data
When all your searches are done and the data collected it’s time to start analyzing.  I’d recommend that you calculate the percent difference between your top tail and the other tails you’ve gathered data from for all your routes and trip types.  Also, make sure to calculate the difference in total flight time and positioning time.

Step 6: Optimize Your Performance
If you’re in top 5-10 search results, with a relatively small price difference in comparison to those around you, then you probably don’t need to take any action. On the other hand, if your fleet is far down in the results listing you should probably review your settings. I would recommend taking a walk through your pricing parameters to see if there are any areas where you might have some wiggle room on price.

Consider the following:

• If you fall behind on routes where you have shorter positioning time than your competitors you should probably take a look at your hourly rates and fuel surcharges, along with your start-up and landing fees
• If you fall behind on routes where you have equal to or longer positioning time than your competitors it would be best to try lowering your positioning cost, if possible
• If you fall behind on routes with multiple take-offs and landings, then review your start-up & landing fees in conjunction with your hourly rates
• If you fall behind on routes that include overnight stops, you may need to review your night stop fee

Magnus Recommends: Stay on top of your system performance by doing at least one benchmark analysis a month (or more often for better results). Adjust your pricing after each analysis, to keep your fleet inline with the current market movements and, most importantly, to ensure you are properly quoted in the system, make sure your availability information is always up to date!

That’s it for our quick tutorial. You should now be ready to do some quick and dirty analysis with the power of Avinode Search.

If you would like to get even more data and analysis to give your fleet that competitive edge give Avinode Business Intelligence a call. With a tailored data solution from Avinode BI you can harness the full power of the world’s largest marketplace for air charter. Check out this sample pricing report to get a small taste of what Avinode Business Intelligence can deliver.

Send us an email at bi@avinode.com to find out what we can do for you!

Let me start out by saying this: Going from 6 feet above sea level in Miami to 5,280 feet above sea level in Denver is no joke! …unless you were watching me climb up one flight of stairs completely out of breath or trying to work out how to de-ice my rental car that did not come equipped with either an ice scraper or de-icer for in the freezing, sleet-filled mornings. I imagine that was pretty funny.

This was a unique time to visit our members. Considering that we had just merged the CharterX and Avinode Marketplaces, I spent a big part of my meetings showing our members how to get the most out of the New Avinode Marketplace. I discovered that many of our members had picked and chosen what parts of the system they wanted to use and understand. However, after an in depth demo on how to navigate the search engine, the clear majority saw the Avinode system in a completely different light.

With the merger being so fresh, I also had the chance to receive first-hand, candid yet constructive feedback. Much of the feedback consisted of various features that users missed from the old CharterX system. However, the dominant feedback: Bring back location search!

Avinode has since taken all of the feedback they’ve received and made tweaks to the Marketplace to incorporate the things our members were asking for, including Location Search. As I mentioned to our members in Denver, the Avinode system will never be static; we are always looking to improve the technology and functionality. Overall, everyone was very receptive of the new Avinode platform being born and they look forward to its growth.

After my many meetings, I found some time to take advantage of my surroundings and hit the ski slopes in Vail. I hadn’t skied for 9 years but it was like riding a bike again. It was such an awesome feeling!

….until I wiped out on a blue slope and a random 5 year old skied up to me and asked, “Need help mister???”

It is clear from this week that business aviation is now poised to take off in China. At least 20 aircraft were sold during the show. With each one pulling in around 30m USD these aircraft mark a significant confidence boost for the industry. When Magnus Henriksson, Business Director of Avinode BI, and I attended the Corporate Jet and Helicopter Finance conference in London last February the OEM predictions for growth in China sounded an awful lot like wishful thinking. Now in the spring sun of Shanghai it feels real and tangible.

While exciting, these numbers need to be put into perspective. With the recent registration of Jackie Chan’s Embraer Legacy the Chinese registry now has exactly 200 aircraft on the books. This number includes helicopters and piston aircraft, in addition to jet aircraft. Business jets, in fact, account for around only 130 of those aircraft. If we compare this to the US the equivalent number would be over 13,000. Over the next 5 years China expects approximately 120 aircraft deliveries. At this rate it is clearly going to take some time for the market to become established.

For the OEMs new deliveries is the headline story and it is a good story. Chinese buyers are not edging their way into the market with mid-sized options. They are jumping in at the top end with heavy and VIP segment. These purchases are the luxury yachts of the air and reflect the newly established individual and corporate wealth in the region. Finance is therefore not an issue. While capital remains a constraint for growth in other parts of the world it is not currently an issue in China.

So should the industry be celebrating? Let me take a step back before I answer this. To have a sustainable and a viable industry in China there will have to growth and luxury toys will need to be flown more hours. Infrastructure will need to be developed, airspace opened up, and the regulatory environment shaped to meet the demands of clients. This will take time, but in China, where the 5-year state plan remains the tool of economic growth, it will happen and dizzyingly fast. It will happen at a rate that will surprise anyone who has not watched a skyscraper go up in Shanghai.

Where does charter fit into this? At the moment charter plays a restricted role. At best it is a limited segment, with the limited number of aircraft. At present charter is constrained by two factors, availability and demand. That may feel like a contradictory statement, but it is not as the two are linked. Limited availability means that for established players in the region, like Deer Jet, charter is not yet an interesting enough option, which is reflected in both pricing and organization.

For newer players such a Hong Kong Jet and Lilly Jet it is a small but potentially profitable business segment. International demand is there for lift in China, but domestic demand has yet to emerge. This is perhaps not terribly surprising. Commercial aviation in China has really proliferated over the last 20 years. Awareness that an aircraft can be chartered for private or corporate use takes time to become established. International brokerages such as Chapman Freeborn are in market expanding operations and doing their part to raise awareness, so it is certain that demand will come.

So should the industry be celebrating ABACE 2012? Yes, is undoubtedly the answer. The NBAA should be congratulated for organizing a business aviation show that is likely to be remembered as the start of business aviation in China. Aircraft sales lay the foundations for business aviation in the region. Hong Kong, Singapore and Bangkok will continue to play an important role in the region, but it is the dragon that needs to stir and in Shanghai, this week, the scales groaned.