Virgin’s most recent new business, Los Angeles based Virgin Charter, launched this evening. The company was founded by CEO Scott Duffy with the hope of modernizing the booking systems for charter aircraft. Virgin’s Richard Branson got wind of the startup, gave the company three times the funding they were looking for and took a controlling interest. The company was renamed Virgin Charter.
Today, the Internet doesn’t play much of a role in chartering private aircraft. Well to do clients have their organizations contact small operators who generally control 3-5 jets. Schedules are compared and prices negotiated. The entire process takes up to five hours on average. And inefficiencies in the marketplace result in very high prices – the average U.S. flight is $18,000 round trip, and a cross continent, Los Angeles to New York flight is generally $35,000 – $65,000. Much of the price is due to “empty legs” – flights that have to come back early instead of waiting for clients, resulting in four legs flown for a round trip. The most well known Internet site for operators to list their planes is CharterX, but it leaves much to be desired.
Virgin Charter aims to change all that by putting small operators of charter aircraft together with potential buyers. In a process that is much like booking a trip on expedia, buyers can look through available aircraft, view ratings on the companies and actual planes, and choose to big on flights. Sellers respond, and flights are booked. Payment is completed via the site using a credit card, wire transfer or EFT, and Virgin Charter keeps a percentage as their fee. Following the flights, both the buyer and seller are requested to leave feedback on the other party. And Virgin Charter will work hard to fill those empty legs, which increase marginal revenue substantially for operators.
The U.S. is most of the worldwide market for private aviation, Duffy says, with about 75% of operators based here. The company is starting out only in the U.S. for now.The company has been in private beta for a few months, with 60 operators (out of 2,500 in the U.S.) By September, when they go live, they plan on having the largest 500 operators under contract.
Ebay could have done the same via their auctions, but glad Virgin Air is doing this, they will offer a better quality service than Ebay.
If you’re interested in these kinds of services you should check out http://www.avinode.com/ who seem to offer a lot more aircrafts and operators.
after reviewing virgincharter demo site and read the management teams information Branson bet on a smart management team- This one’s a WINNER, and the CEO/Founder is an Internet pioneer CBS SportsLine, Quote.com this guy’s been through the .com bust and re-invented himself
As tz beat me to the comment, Avinode is a strong player in this area and has been since 2003 I believe.
//Anders
While CharterX seems to have partnered with this company; they certainly are the dominant player on the scene. (www.CharterX.com).
- give someone 3x the amount of funding they wanted / and take controlling interest …
IE (buy the company) …and save face with current employees / dvelopers
This is really cool. Will it expand to include other types of charters? The charter boat business would probably really benefit from something like this. I’m sending this story to my brother.
so when does it launch? the site appears to be info only and there’s no launch date and only a keep in touch link with a possibility to get into the beta…
Hi Crunchback — My firm is handling the PR for Virgin Charter. You are right — right now the service itself is in an invite only beta as they continue to work with operators and so forth. We will be launching the service in the fall.
This is one of those “I wish I thought of that first” businesses – the demographic is wealthy (good for cross promotion and advertiser acquisition), the referral $$$ will be very good compared to what expedia etc get and it fits perfectly with the other brands Virgin owns (including non-charter flights and space trips).
Jon
I’ve have good experiences with http://www.aircharterguide.com
It connects you directly with operators. You can even search by airport.
This service already exists…see http://www.Jets...com–which provides top tier charters to clients around the world based on an auction model. I couldn’t recommend them more highly.
That’s http://www.Jets.com.
We’ve already launched a similar site that connects travelers and shippers directly to aircraft operators that can service the requested flight. Check out http://www.Taxijet.com.
Roger Burton
CEO – Taxijet.com
Unfortunately, margins in the charter jet world can be quite thin and erratic based on the supply chain variability. Putting a Web 2.0 spin on a business with old-line margins may not quite work. We’ll see, I am certainly pulling for them.
I think this article fails to mention the environmental implications, particularly the significant reduction of the excessive pollution caused by all those empty legs. Why isn’t anyone writing about the environment when this is clearly an important part of what they are doing? I think this company could really make a difference. When I Googled them this morning I ran across a venture capital firm by the name of Funk Ventures which evidently built this company with the CEO from scratch before Virgin came on board. I took a look at their website and it looks like all they do is socially-responsible investing; no wonder Richard Branson thought this was right up his alley. I even read on another site that Branson is going to put the profits from Virgin Charter towards his $3 billion pledge towards clean-tech. Not a bad gig if you ask me. Not just do investors and entrepreneurs like Branson and Funk Ventures seem to become more socially inclined these days, now the rich guys get to fly in their private jets (which they will anyway), and Virgin Charter will make sure it’s done in the most environmentally-friendly way.
I am not so sure about the environmental impact to be honest. I do think the concept of getting rid of the dead legs is fabulous but I am worried that these increased efficiencies will only make the private jet business grow, ultimately causing more pollution. I’ve heard of the VC firm they worked with, looks like their CTO Ron Garret is a venture partner there.
I guess you have a point there, Jake but I still believe the business model is awesome and provides several environmental benefits.
I googled their CTO and found his rather interesting blog at http://rondam.blogspot.com. The guy is surely quite eclectic but what else can you expect from rocket scientists?!? I wasn’t aware of the VC connection and took a look at that in more detail. It doesn’t look like they funded the company (otherwise Duffy wouldn’t have looked for money in the first place), but they ran it through what they call their Acceleration program, which sounded like a type of incubation for younger companies to me. Aloha!
What a great business idea. I wish I could have a creative brain like all of these folks.
Food for thought: If I booked a flight from Los Angeles to my city of Denver, I could pay $20,000 for the roundtrip-if I don’t go back to LA, too bad! If the company that charged me $20,000 for the one leg now sells that empty leg to another buyer for $5,000-they have made money twice and I can’t be feeling real happy about my “deal”. It will be interesting to see how this plays out!
Excellent point. In fact, now that I think about it, this idea is probably going to flop or turn the private aviation upside down. Should be an interesting company to track over the next year.
We recently booked a charter flight enroute to India on http://www.airnetzcharter.com They interface and usage is lot simpler. They have a nice team that co-ordinates everything well..
We used http://www.caeroscene.com quite a lot which works just great ! This system comes up with new innovations every couple of weeks…
Wow
ive had goodluck with http://www.priv...charterjets.com – also uses the charterx booking system
I agree with tz and Anders above. Most of the sites listed here are just junk. I have played with them caroscene.. airnetz.. etc..The only true system that really works for realtime quoting and aircraft availability on private jets is really http://www.avinode.com and it is also the only one with global coverage..