While there is so much going on with private aviation these days after the pandemic, some new strategies have emerged. We are proud to be part of that by being the architects of innovative ideas that are helping our clients see record growth. We would like to share 6 innovative ways to market private jets or for that matter any aircraft.
As many in this industry know, there have been a fair number of corporate failures recently. Part of it is just bad, risky business models. If your business has you relying on selling cards/clubs, taking on investors, borrowing money to operate or running continuing losses, then you have a bad business model.
Look no further at one of the largest in the private jet charter business, Wheels Up. Faced with a possible bankruptcy filing, it received a lifeline from Delta Airlines and two other investors to the tune of about $500 million. But remember it has over $800M in prepaid deposits for jet card owners, just mortgaged the majority of its 1,500 aircraft and has never operated at a profit. Yikes !
AIRCRAFT SALES:
And when we talk about marketing, let’s also talk about aircraft sales. This is actually becoming more like the automotive industry. It’s a seller’s market but sometimes sellers are not making the right choices.
For those looking to buy new aircraft, the lead times are still long. The supply chain issues of the pandemic are now only starting to get back to normal. But there is still a big backlog of new orders. And let’s not forget depreciation. Used aircraft still remain a better value.
And as far as the used aircraft market is concerned, not a lot of good quality inventory at fair prices. If you want to overpay, there’s plenty of aircraft. But few people are biting, especially with high interest rates.
Now back to the sellers. Believe it or not, if you are in a position to donate your aircraft, this is definitely a viable option. You’ll get the appraised value or selling price, whatever is higher. But the other big news is if you are the broker trying to sell the aircraft, and convince your client to donate, you can earn even more commission.
A Florida-based charity, Dads for Boys, will accept the aircraft and immediately relist it with you for a higher commission. And if the aircraft sells independently, you’ll still get 10%. A win win.
AIRCRAFT CHARTERS:
The air charter business can be very lucrative if the right business model is followed. Clearly a number of the larger companies are not doing it correctly because they continue to lose money. They are beyond just cutting some costs and/or raising prices. On demand prices are now at a level where there are fewer new customers.
A recent startup company is trying to combat that by using smaller aircraft, reducing commissions to brokers, and having longer lead times for flights. Clearly this will be a failure at some point.
We have found working with clients that there are a couple of business models that are not only thriving but growing at a record pace. What didn’t work before in some cases is now working and we have uncovered new strategies that are changing the game.
Here are 6 successful proven growth strategies that are working in today’s marketplace:
- Target your most profitable clients, not one size fits all.
- Get away from dependence on the jet card / club business unless you can do it regionally with aircraft properly positioned. Otherwise it could potentially put your balance sheet into insolvency.
- Develop a separate procedural practice for handling corporate vs individual clients (big money here).
- Develop an overall boutique process. (This is a new secret sauce we figured out).
- Separate your charter, sales, and maintenance businesses. This is very important from a marketing perspective.
- Develop loyalty programs with affiliate complimentary services (this will attract new customers and reduce retention costs). There are household name corporations looking for partnerships. We just did one with a major player. And we have more…
If you really want to get ahead, we can help. Remember we’ve been doing this for over 40 years. Don’t become the next failure or give up control of your company. Send us an email at hello@blueislanddigital.com and let’s set up a call.