Plane Conversations

Next Generation Air Traffic Management represents a major evolution in ground based air traffic control to satellite based air traffic management; it also represents an opportunity for private aviation to deliver far more value to the communities that they serve.

In order to accomplish this, Social Flights is developing a unifying business method that accurately and reliably matches supply and demand for private transportation assets across several thousand airports in the United States. NextGen, combined with the Internet and social media, gives the private aviation industry a set of tools that were unimaginable 20 or 30 years ago when the private aviation market last shifted.

How will private travel evolve?

NextGen will use aviation-specific applications for existing, widely-used technologies such as GPS, Weather Forecasting, data networking, and digital communication. Not surprisingly, these applications will lead to new procedures and airport infrastructure.

Some of these changes may be quite predictable

To get an idea as to how these new technologies will impact aviation, it may be a simple matter to compare how these EXACT same technologies have changed social cooperation in general.  This prediction is valid because we all cooperate for our little piece of the sky.

Society has learned to cooperate in amazing ways as mobile devices, VOIP, GPS, Weather Reports, Traffic Reports, and non-corporate social organization become evermore commonplace.  New business models constantly form around the technology.   The result has been a profound shift in power and influence to those (for better or for worse) who can access and curate relevant information AND then share that information with people in their networks (and beyond).

Social Flights is taking the lead and calling on all private operators to join with us to build a common platform for private aircraft inventory and ground operations across the United States:   

• Where are your jets stationed?
• What inventory do you have available?
• Where are your empty legs going?
• Are you willing to share facilities or “code-share” with other operators?
• Are you willing to cooperate with the major airlines?
• If entrepreneurs in your community had access to the whole system, would this help you?
• If corporations and event planners had access to the whole system, would this help you?
• Are local hospitality and support services sharing information with you?

The New Technology Advantage

Since the late 1800’s America has replaced every single telephone pole with a new one every 50 years or so.  Today, every less developed country can simply build relatively few cellular towers and avoid that mess. For this reason, we can assume that airlines no longer have the advantage of vast hub infrastructure when together, we can just as easily sort people and planes with access to the right data shared across the right network.

Any number of b-school power plays will cite the competitive advantage necessary in hard economic times.  But how many people talk about the cooperative advantage?

Information is power

When the buyer has the same information as the seller, markets are more efficient.  The Internet has made information free and easy to transport.  So, understandably, any business that hopes to survive by restricting information will ultimately find competition from a start-up that does not.

The “equal information” playing field

This scenario plays out over and over as industries as diverse as newspapers to higher education to government to commercial aviation are forced into profound transformation by the availability of equal information.  True to conventional wisdom, good information creates more good information and bad information creates more bad information. For Social Flights, our best customer is the educated customer because they’ll educate each other.

Coming to an Airfield near you…

The true cost of flying private jets is one of the best-kept secrets in aviation.  Corporate Jets are a source of mystery, controversy, and symbolism. There are many reasons for suppressing true costs such as avoiding public disclosure of VIP expenditures,  or to protect profit margins enjoyed by charter brokers.

On the other hand, there are many important and legitimate reasons why some people should fly private instead of commercial. Social Flights believes that there are many situations where the true value of private flight greatly exceeds the cost of private flight for a large population of travelers. The problem is to find possibly millions of passengers who do not know that Social Flights applies to them.

Information Transparency

For this reason, it is essential that a baseline cost be established in a market so that everyone can use the same data to make educated decisions about how to travel efficiently.  It is essential that the market can eliminate price distortions, suppress arbitrage opportunities, and equalize asymmetric information.  The focus of the industry should be on expanding the market through transparency, not short term gain by hoarding the limited existing market.

Cooperation is the new market advantage

Social Flights has developed an instant flight quote feature that calculates a nominal estimate to fly a private aircraft from any airport in the US to any other airport in the US.  This establishes a baseline on the actual cost to fly.  From this baseline, jet operators can bid and win missions that are naturally most profitable to them. Or, operators can cooperate with each other by sharing legs in an abundant market rather than compete with each other for a constrained market.

Event planners, corporate executives, travel agents, economic development agencies, and travelers of every type now have the information that allows them to access private aviation inventory for businesses and the magnificent value that it brings to communities.  That is the new market advantage.

People are accusing Google of using it’s vast coverage and near universal brand to take unfair advantage of the “search and sell” industrial complex.  When people type in; “San Diego to Charlotte Flights”, Google instantly provides the cheapest  flights for that search criteria.

Google also provides a handy link for “more Google results…”  After that, lesser aggregators such as Expedia and Kayak appear lower on the page. Of course, the vanquished can pay Google a fee for the benefits that any advertiser would gain…

Who is anti-competitive against whom?

So is Google engaging in anti-competitive behavior, after all, they are both the judge and the jury on who shows up where on your screens? Well, maybe not, all they are doing is “intercepting” general search inquiries with their own products.  It’s awkward, but not necessarily illegal or anti-competitive since Google provides links directly to the airline site and does not book the seats on their own site like Expedia or Orbitz.

On the other hand, airlines pay travel sites 11 dollars for a booking that would otherwise cost them only 1 dollar through their own site – they prefer the Google hit over the travel site hit.  Furthermore, travel booking sites rely on Google for 20% of their business so any slide in ranking means real money is sliding down with it – so they hate it.  The airlines love it because it gets the traveler off the third party sites where stickiness is a rumor at best. All of this friction is worth 17 billion dollars per year – friction removed from a system is obviously in the best interest of the consumer, Right?

Ref Google’s Flight Search Sparks Antitrust Fears |.

The thing that everyone is missing is that none of the current players in online travel agency businesses are aware of a significant opportunity within the private aviation space.  The Google quotations are made on a dollar ranking not a “Time/Service” metric.  It remains extremely easy for an airline to game the ranking by hiding fees outside the fare quotation.  It is also easy for the airline to underprice a few seats to pull the customer on to their site where they block out the better seats.

So, what is the opportunity are we talking about in private aviation at Social Flights?

1. Aggregating open seats available on more than 15,000 private aircraft flying everywhere
2. Making these seats available and transparent to the public for purchase as an alternative to the broken and anti-social commercial air service
3. Enabling fliers to self aggregate and for direct flights from communities with no service to destinations they have in common
4. Lowering the cost of private aviation by selling unused or under utilized assets, open seats

Google Search for the term "Jet Charter"

Google Think Insights is an amazing resource for looking at who is searching on certain terms, and from where.  This post shows two search categories and related terms from which we can draw several general ideas about private air travel.  These data demonstrates that an increasing amount of people are searching on terms such as private jet, jet charter, VIP travel, etc.

Another curious trend is the term “Jet Charter Cost” is also increasing significantly as people seek to find the value threshold for private air travel vs commercial air travel.

Recession or transition?

These data all refer to a date range between the dates of january 2008 and December 2011 corresponding to the greatest economic downturn in the US since the Depression.  There are likely many forces acting on the market including the pullout of commercial aviation from minor market, few travel alternatives,  increased usage of internet search technology, increased business travel needs, and upper class growth rates.

The increase in terms related to cost may suggest that even the most wealthy are becoming cost conscious, more people want to fly private, more businesses need to fly private in order to access their market, and more VIP travel is required.

It is not surprising that the term “business aviation” has a similar location density to the term “Jet Charter”.  This reinforces the suggestion that corporations increasingly need to send their executives on travel outings.

Social Flights is in the business of social organization too:

It is likely that wherever executives go, so too will managers and lower level employees.  Social Flights has long suggested that there is an opportunity to increase private charter shuttle service between key locations.  Likewise, there are opportunities for companies to share private aircraft scheduled to fly between regions.

Next we looked at the term “VIP Travel” and identified the following locations where the terms were searched.  We found a similar increase in VIP Travel related terms as we did for terms related to jet charter costs, except related to supporting services such as reservation, booking, schedules, and services.

This suggests that the door-to-door experience is underserved and that an air transportation service that is able to connect the dots would hold a true value advantage over one that just drops the passenger off at a hub airport.

Search terms are important because they indicate the intentions of a market.

While little is ever conclusive, the rate at which something changes can say more than the thing being observed alone.  At Social Flights, the demands of a dynamic market are clear.

1. Companies must have business travel options.

2. A door-to-door value proposition is essential.

3. People are searching online more than ever

4. The commercial airline industry leaves a market underserved.

Economic recessions have been shown to be more about technological transition and adjustment rather than any single underlying factor.  We believe that this transition will be no different.

“Systems Thinking” is important in aviation.  No single event acts alone from complex air traffic control to complex mechanical aircraft and complex weather systems. Economics is a complex system and markets are complex systems, human behavior is displayed in complex social systems.  This is the way that Social Flights approaches business – we are a ride sharing “system” for private jets

It is not surprising then that Google identifies 5 stages of the consumer travel system.

The following is from Trent via Statistics and Research Studies for Travel, Tourism & Lodging:

More than 87% of travelers expect to take the same or more number of personal or business trips in 2011 versus years past. This outlook is positive, and with the rise of mobile, social and video behaviors, we are now seeing seeing travelers move through five key stages of travel. Here are some insights within each stage:

Dreaming: 68% of business travelers watch travel-related online videos. Among them, 68% are thinking about a trip.

Planning: The average traveler visits ~22 travel related sites during 9.5 research sessions prior to booking.  85% of leisure travelers consider the internet their main source of travel planning.

Booking: 37% of leisure travelers report that the internet prompted them to book, up from 28% two years ago.  53% of travelers plan to increase comparison shopping this year.

Experiencing: 70% of business travelers check into their flights/hotel with their mobile device. Almost 1 in 4 hotel queries come from a mobile phone.  Over 50% of travelers use mobile phone or device for travel-related information.

Sharing: About 1 in 3 business travelers have posted reviews online of places they’ve been.

At Social Flights we have argued that there is a great need for travel related information to be made available for private aircraft and charter jet inventory.  As such, we are developing tools such as our “Instant Quote” feature, and inventory listings to supplement travel information on line. Here’s why:

62% of personal travelers use search engines as the number one source for travel information. 

51% of business travelers use mobile devices to get travel information, more than double the rate of two years ago. 

46% of personal travelers are watching travel-related videos, versus 36% two years ago. 

The quantity and the quality of information that a travel company can provide is directly proportional to the relevance in the 5 stages of consumer travel activity.  The effort is paying off.

Social Flights will soon announce several deals with municipalities that are tired of being stranded by airlines

Social Flights will annouce a deal with a major vacation spot that is tired of getting gouged by brokers

Social Flights Instant Quote feature continues to disrupt the “secret handshake” of the charter jet industry

Social Flights will soon announce major deals at world class events where we shuttle people to the doorstep of the action

Social Flights is opening travel circles across the US for people to share their experiences and plan their adventures

At Social Flights, we are aviators, we are system thinkers, we are fully aware and intentional about the system that we are building.  We thank all those who are helping, from our pilots to our partners to our investors and to our followers.  Together we are developing a Social Flying System

Picture credit: Wealth Informatics

The race to the bottom that everyone has been watching in the airline price wars may have finally ended. All the frills have been extracted, all the expectations have been dashed, and the glamour of the jet-age has all the luster of a drive-in movie.  The bottom has been achieved.

The entire value chain, from airport taxes to hotel rooms and parking fees have happily stepped into the low-cost void, ready and willing to pick up the slack in airline prices.  The taxi from my house to Seattle Tacoma airport costs more than the airfare to San Francisco.  Three days of parking at the airport costs more than the taxi.  Off lot parking is not much better. God forbid that hunger arrives at it’s destination before you do.

Now watch the prices start slowly creeping upward as airlines come back leaner and meaner subsidized by the pensions of their workers in the post-bankruptcy glory of the deregulation act of 1978.   If American business has been accused of shortsightedness, the 25 year plan of the airline industry is pure brilliance – assuming it was a plan.

From USAToday:  

A new American Express Business Insights study finds that spending on first- and business-class airline tickets increased by 9.1% and 5.4%, respectively, in the third quarter. But on the ground, travelers spent more of their dollars — an additional 10.5% — on economy lodging vs. only 2.2% more on luxury hotel accommodations in that time.

There are likely several reasons for the shift in spending patterns.  Travelers are valuing the products on a “true value” basis.  The value of business class treatment and comfort exceeds the value of luxury accommodations.  Interesting.

The spending trend applies to traveling for business or leisure, the study indicates. ”It really speaks to the fact that (consumers are) so concerned about the airline experience that they’re willing to make the trade-off,” says Maryam Wehe, senior vice president of hospitality at Applied Predictive Technologies. 

How much would a business passenger justify to shorten the air travel portion by 50% while also eliminating two overnight stays?  At Social Flights, we can often provide a door-to-door travel experience that is 60% – 80% shorter in total time yet costs the exact same amount in dollar terms.  Guess what – that’s what Social Flights can do for you.  Social flights provides on-demand, direct, and comfortable private jet travel in a ride sharing form so that you get more travel for less money.

Say what you want about big government consumer watchdogs – increasing information transparency in business transactions makes markets more efficient.  Telling someone that they can fly from Albuquerque to Tucson for 59 dollars only to find an 80 dollar fare plus add-ons for everything from baggage, talking to an agent, to requesting a paper boarding pass – this just goes over the top of any ethical disclosure standard.

* additional fees and taxes apply

According to a recent article from the L.A. Times: New rule requires air fare ads to include taxes and fees, starting Jan. 26, no more asterisks.  A new U.S. Transportation Department rule requires all advertised air fares to include any compulsory taxes and fees, including fuel charges and the Sept. 11 Security Fee.

At Social Flights, we go a step further – we will tell you the time tax that you pay by not using point-to-point direct private service.  For example; if your cheap fare takes two connection flights, with long waits, parking and airport fees plus extra overnights, we will happily tell you that if the value of your time is more than X dollars per hour, then we are cheaper. We can take you there  in 3 hours instead of 13…but I digress.

“The price advertising provision was adopted to make sure passengers know the full amount they will have to pay for air transportation when they buy a ticket,” said agency spokesman Bill Mosley.

It’s all about money and time

If anything, quoting a true cost in any form – dollars AND time – provides the traveler with a broader way of thinking about competing options.  Many short flights have a true speed of less than 60 miles per hour.  The customer needs to be able to compare with the cost of driving.  If there are several overnights involved, the traveler needs to be able to measure those costs against taking a train and sleeping car.   Of course, private air travel on a shared charter jet holds a distinct segment of the value proposition.

The airlines also described the new rule as “arbitrary and capricious” because the practice of advertising fees and taxes separately has been used for years by “virtually every other industry in the United States.”

Passengers held captive

The airlines may have a good point – although we would prefer that they held themselves to a higher standard than “every other industry”.  The fear is that if they quote the true cost, then people would look for alternatives while they still have time … before they are held captive.  See, it’s all about money and time.

Things are moving very fast in the era of social media. As soon as an airline makes a move, everyone downstream needs to adjust. New applications are built a new competitors form responses.  There is no “book” to read about how to do business in this rapidly changing environment.  So when a customer has a new question for a new situation, they go directly to the Internet to find the answer. And what do they find? Enter the online travel agent (OTA).

From Travel Matter:  Why Blogging Makes Sense for Travel Agents:

Then sites like TripAdvisor entered the industry, allowing travelers to access (and create) user generated reviews of hotels and booking travel became even more of a DIY process, that didn’t require expert guidance. Other sites even let travelers find out which seat on an airplane has the most leg room or which wing of a hotel has better views. Even guidebooks began to show this DIY attitude, as Lonely Planet outsold other publishers.

DYI-mania

As more and more layers of DYI independence are offered up to customer, so too is disinformation, incomplete information, conditional information and thousands of “options” that mask the true value of the travel experience.  It is largely in the best interest of OTA to consume the “time” of the traveler seduced by the promise of low prices.  First, this allows OTAs to impress more ads; and second, the DYI’er eventually get frustrated and click through to the more expensive (profitable) option for lack of time to deep dive through the details, restrictions, and caveats.

The Indispensable Knowledge Resource

All along, the traditional travel agent; once an indispensable resource has fallen by the wayside.  Some argue that the travel agent is to blame for not reinventing their profession from “broker” to “helper”.  Perhaps being technology savvy never entered the profession as it had for so many other professions.  Increasingly, the travel agent skill set is needed.

The Experience Traveler

Travel Agents have the ability to organize people around a set of events, opportunities, locations, and modes of transportation.  The experience of travel is finding it’s way into the value proposition of the decisions that the travelers make.

Everything from social media to Google to Groupon has re-focused consumers’ attention on small businesses, and given local businesses the tools they need to compete in non-local markets.

Few can aggregate local information better than travel agents

If given the right assets, they can put together offerings in anticipation of travelers.  Social Flights is constantly looking for that perfect skill set of location knowledge, transportation knowledge, and concierge service to whom we can entrust an available aircraft asset.

Travel agents can help redefine the door-to-door value proposition and Social Flights is here to help with a full array of private jets and corporate jets for private and public charter for scheduled service between any city pair that one can envision.  We are not the only ones; hotels, experience tourism, conference and events all search for the elusive traveler who has so many options but so little time. Travel agents can now manage a scarce and protected inventory once again where their knowledge, creativity, and social skill matter.

At Social Flights, we have said many times that nothing economic truly can happen until people get together to build something. Economics is the science of incentives and no incentive is stronger in the human species than family and community.  It does not take much of a chasm of reason to see why Google is so interested in travel and travel related properties.

Travel is the keystone for change; change of ideas, change of relationship, change of intentions, and change of markets.  A banker is not interested in money – they are interested in the rate of change of money; it’s called “interest rate”.  People are not interested in the same old story, they want the story to change – this is what keeps their “interest”

Again, we find Google at the center of the social “Interest Rate” in travel.  Don’t think for a minute that Facebook “timeline” is not also a move to capture how people change and react and adapt to the conditions around them. This almost makes it pointless for people to try to react to these changes because such a reaction is, in fact, registered by the platform driving the reaction.  Is this a problem?

From http://www.tnooz.com/2011/12/12/news/google-quietly-introduces-social-travel-service-schemer/

What makes you want to go to a place to begin with? When you have chosen a place – what makes you want to explore further? The inspiration phase of leisure trip planning research has been by far the hardest for tech-based services to master.

Google has announced (and started sending out Beta invites to) a new service, known as Schemer, which attempts to compete in this gap. Effectively it is local destination ideas based on tips from your (Google+) friends, celebrities (oh yes!) and professional destination content producers (ie. travel writers).

If destination research moves to starting at Google Schemer rather than Google Search, then Google will be able to pitch flights, hotels and other travel services, without having to necessarily work within the confines of their existing web properties.

Everyone else who makes it their business to build P2P platforms such as tour guides and recommendation platforms will be cut out of the loop.  If Google can now branch away from their core search and into the social connectivity business, they can compete with their own customers.  Is this a problem?

What Google does not do, and cannot do, is actually operate a jet aircraft.  They cannot clean a hotel room or manufacture a rental car.  They cannot cook a holiday dinner or wax a snowboard. Real people need to do this.  Why is Google chasing Travel?  Google is chasing people. At the end of the day, people drive Google. Is that a problem?

Ref: http://www.tnooz.com/2011/09/01/news/ultimate-guide-and-analysis-to-tour-guide-marketplaces-on-the-web/