The Allplane Podcast #3 - The Fascinating World of Executive Aviation, with Adam Twidell, of PrivateFly
Executive aviation has the allure of the uber-exclusive.
While private jets remain the ultimate status symbol, entrepreneurs like former RAF pilot Adam Twidell have been working hard to make them more accessible. The company he co-founded with his wife, PrivateFly, has brought transparency and convenience to executive jet booking.
In this episode of the podcast, I speak with Adam about private jets, but also about his entrepreneurial journey and the way PrivateFly has leveraged digital channels to carve for itself a place at this very exclusive segment of the industry and how it launched the wildly popular “most scenic airport” contest, that got massive media coverage worldwide (disclaimer: I have been a member of the jury a couple of times!).
Topics we talk about in this episode:
-How to launch and grow a successful startup in executive aviation
-The challenges and opportunities of executive aviation in the time of Covid-19
-How the executive aviation works (ownership/fractional jet ownership/jet brokerage)
-How executive jets can be divided in categories according to size and range
-How to book a private jet and how it compares to regular airlines
-PrivateFly’s digital marketing activities and “Most beautiful approach” contest
Resources
PrivateFly’s always interesting blog, to learn many facts about executive aviation
PrivateFly Scenic Airport contest
My article on CNN about the most luxurious private jets in the world
Full Transcript - Interview With Adam Twidell (Founder of PrivateFly)
Hello and welcome to a new episode of the Allplane Podcast!
Few segments of the aviation industry generate as much curiosity and fascination as that of executive aviation.
The idea of flying in a private jet evokes a world of limitless luxury and extravagance, but how much of this is there in reality? How does the world of executive aviation work?
We will have answers to all these questions in today’s episode of the podcast…
But before that, just a short reminder that you can find the previous episodes of this podcast, plus lots of other aviation stuff at the Allplane website, this is Allplane.tv.
Today’s guest has been a successful entrepreneur and disruptor in the world of executive aviation.
After a decade on Her Majesty’s service flying C-130 aircraft for the Royal Air Force, and some time working as a pilot for corporate jet operator Netjets, in 2008, Adam Twidell and his wife saw the corporate jet market was ripe for disruption. They, literally, mortgaged the family home to create PrivateFly, an online marketplace for executive aviation that allows you to book a private jet fast and easily through a mobile app or a website, just as you would on a normal airline website.
PrivateFly has since been a story of growth, making private flying more accessible and transparent for many. In 2018, PrivateFly was acquired by a large American corporate aviation operator, although it continues to operate autonomously from its offices in the UK and Florida.
PrivateFly has also a website that is full of great quality content and information for all those interested in executive aviation and every year it runs the “most beautiful airport approach” contest, in which I myself have participated as a member of the jury, that has becoming widely popular and got massive media coverage all over the world.
From this vantage point, Adam has a panoramic view of everything that goes on in this most exclusive segment of the travel and aviation industries…
So, without further ado, let me welcome him into this podcast…
Hello, Adam, how are you?
Well, hello, Miquel. I am personally very well during these very difficult and complicated times, for many people,
-Indeed, just so different from the time we met, a few years ago in the sunny island of St. Maarten in the Caribbean, where we were both attending a conference, aviation conference. And then I had the chance to learn about PrivateFly and this very exciting journey you've been into the last few years because you actually did something very brave. You mortgaged your own house to set up a business that has been disrupting the executive aviation market since 2008. Right?
-Yes, well, my story in aviation started as a pilot. I was taught to fly by the Royal Air Force when I was at university and Edinburgh and like so many of our colleagues in travel, I got addicted to flying and to travel. And I had 10 great years with the Royal Air Force in the United Kingdom.
-You were flying in Hercules, right? A C-130
-Yes, perhaps I was not talented enough to fly the fast jets..! So I was put on aircraft with lots of crew members to look after me. Great, great time and included lots of operational experiences during my 10 years in the air force but at the end of that it was time to move on. And I joined the fractional provided Netjets in Europe flying private jets and I absolutely loved this new side of aviation that I'd never discovered before.
-Actually, it's good. You mentioned Netjets because before we go further, and we get into the details of what you do at PrivateFly, and your story, I just wanted to ask you about the executive jet industry because maybe, well, I'm pretty sure many people in the audience are not too familiar with this very, very special segment of the aviation industry. So basically, if you want to fly private, you have different options. And there are different ways of doing it. So you can own the jet, you can join a fractional jet company as a member, or you can use a charter broker, like PrivateFly, right?
-Yeah, I think it's very similar to perhaps a holiday property or indeed a boat. So if you want to invest heavily, then you would buy the asset itself in this case, the private jet. But, whether you operate one private jet or a whole airline of aircraft, you're under the same restrictions and controls by the aviation authorities. So it's a very complicated machine to operate. So what most owners do is they utilize a management company to employ the pilots and to do the maintenance and to do all aspects of the aircraft. So that's ownership. But of course, owning a private jet is very expensive. These aircraft depreciate extensively, often as much as 20% in the very first year and then 10% thereafter. So as a rough rule of thumb, after five years of owning a jet, half of the value has gone and you haven't started paying for the cost of the pilots and the engineering, the landing fees, the fuel, so you can see it's a very, very expensive machine to own outright. So, some people then decide to share the cost of ownership and join a fractional provider. Now I mentioned Netjets. But in the States, there is Flexjet and other companies who would offer you a share of an aircraft. That way you can share the costs of ownership.
-So essentially, you pay a membership fee, right? And then you have an aircraft or do disposal whenever you need it, right?
-Well, you're actually buying the aircraft you're buying a share of the aircraft. So normally the smallest share you could buy in a fractional model is 1/16th of an aircraft so you have to commit to that cost. And then yes, there's an annual management fee and a monthly management fee and of course, you have to pay every time you use the aircraft and 1/16th share would equate 50 hours each year, you could fly your aircraft for 50 hours, of course paying as you go. So again, if you want to be a little bit more prudent with your funds, then the next management style is a jet card. So you would buy a number of hours and commit to that cost. So typically jet cards come in 25 hour blocks. So you would buy 25 hours of aircraft time. Now that's a known price. And every time you want to fly, the aircraft would be available to you within a set period of time.
-And the other option is actually to broker an aircraft whenever you need it right now without further delay.
-Yes, this is again, if we refer to a holiday property, you can experience a new property every time you go on holiday or if indeed if you do like one particular holiday house, you can return to it time after time. But you're not paying the upfront cost. When you leave the property. You don't have to worry about the maintenance. So charter is on demand. So you can choose when and where you want to fly and on what type of aircraft and it's also very cost effective because by not owning the asset, somebody else is paying for the depreciation for the pilot salaries from the maintenance and you're helping the owner offset some of those costs by charter in the aircraft.
-And here is where a PrivateFly comes into the picture. Right? You are sort of online marketplace where you can aggregate capacity from many different operators then people can book executive jet trips digitally on your app or your website, just as you would in a normal airline website. Right?
-Well, it seems very normal now, to think about looking online, comparing options and making that educated choice. But back when we started looking at a project in 2006, nobody was offering this service online. And it was a very fragmented industry, with customers on one side, and huge numbers of aircraft operators and owners on the other. And looking as a pilot, I knew that passengers I was flying knew that charter was very cost effective, but they were put off because the industry wanted to tell them that it was complicated and then you needed an expert to help here and I actually knew that wasn't true. It was very easy to fly a passenger from A to B and all we needed to do was track where all these aircraft were, understand about pricing, and show that in an informative way to the customer, and let the customer make the buying decision about which aircraft they want to fly in. And of course, I wanted to provide 24 hours expertise service, because it's very important I feel not to control the user. The users journey in private aviation, our customers can use our app on the website or they can phone us. We even have some customers who write to us and that's quite amazing for our younger team when they receive a letter in the post from a customer. But if you understand our customer base, you'll understand that they want to control how they communicate with PrivateFly.
-Even when you, obviously, provide this customized personal service, you also get some customers that they just booked the whole trip 100% online, right you in a previous conversation I remember you told me that you had even seen people booking trips worth half a million dollars direct on the app on one goal.
-This was when we were starting the company and developing it...you do have some amazing surprises along the way. Of course, running a company is full of ups and downs. But on one particular day, I remember our app, which was in its early stages, had a booking for a Boeing business jet (BBJ). This is a VIP version of a very well known aircraft. Now the Boeing business jet is an exceptional aircraft to charter. And so when that flight booked for $500,000, we didn't expect to see the money in the bank account. But the next day it popped in. And that was a confirmed booking by an app. So at that point, I realized there was no limit to what you could sell online.
-Your entrepreneurial journey started in 2008. Right? Then you grew this business and then you got acquired by a US company in 2018. And now you're part of a larger group that covers a whole spectrum of executive aviation, but you specifically PrivateFly, you continue to work autonomously based out of the UK, but you have offices in Florida as well. Us obviously a huge market for private aviation. And yeah, so you basically You're part of a larger group, but you work autonomously?
-Yeah. When you summarize the PrivateFly story like that I have to reflect on. It's been quite an amazing time of high growth. We started the company with a belief that we wanted to put the control of the booking in the hands of the, of the clients. And we wanted to educate them about what happens in the industry. So it was very much a content led online digital company. We started gaining some great traction in the UK, but we funded the company, my wife and I by selling our family house and we realized at some point, because we were being successful, we would be copied by other companies, which of course is normal. And if we needed to take the company to the next level, we would have to raise some funds. So we raised 2 million pounds from a number of angel investors and we were able to use those funds to employ some key members of staff with languages and translate and localize the site for the many different countries that we have in Europe. And again, we were fortunate to have great success. And, and the company continued to grow and gain momentum. Next, was what to do with the American market. And we realized eventually, that to get a foothold in the States, we had to have people on the ground. So we chose Florida as our location. And we opened a sales office in Fort Lauderdale. And we actually were able to use our own profits from the company to do that expansion. We did look at further funding, but decided to do it from within. Now, as we continue to grow, of course, many competitors were interested in acquiring us, or at least finding out what we were doing differently. Because we ran a process, and we had a number of different companies involved. But in the end, we were very pleased to be acquired by one of the leading private aviation groups, “Directional Aviation”. And we're very fortunate that Directional is led by a pilot, a serial entrepreneur. Can Richie is our chairman. And Kenn Ricci ultimately an entrepreneur at heart and continues to be so. So whilst we have many different brands, within OneSky, the flying side of the company and the wider group, we all run independently. Of course, we speak to each other, but I feel that we haven't lost any of the entrepreneurial spirit that we had way back in the early days. Still very much there.
-Because you introduced a number of, let's say, novelties...well, I don't know if they were novelties, but certainly, you provided another level of transparency and ease of access to certain services like for example, the empty legs. Can you explain for the audience what's an empty leg?
-A private jet behaves very much like a taxi does. It takes passengers from A to B drops the passengers off, and then drives or flies to the next location. Now, the ultimate aim, like Uber, is to have technology to reduce the positioning and those empty journeys, and that's very much what we've done with our technology. However, those empty legs can be sold at discounts because the aircraft is flying anyway, between those two airports. So whatever funds
-Sorry, let me stop you here one second because just to put it in practical terms, so let's say you have someone flying from London to Geneva on a private jet, and that person stays there overnight. But that jet needs to do some services the next morning, so it might be flying back to London empty on the same day. That empty flight is actually what you put in the market. And you could in theory, you can book for a reduced price right because that that capacity is not going to be used otherwise
-Yes, very much like a hotel room. If a hotel has not sold a number of rooms by 7pm in the evening, they might then try sell those hotel rooms to a discount site. Just to get somebody to pay some amount of money for it. Now unfortunately, a private jet empty leg is not as scary. As a hotel room in terms of it can change. Now, your primary customer in your example, who just flew from London to Geneva might decide, actually, they don't want to depart London at 10 o'clock they want to park at 5pm. or indeed, they might not want to fly to Geneva at all. They might want to fly to Zurich instead, because the meetings been changed. So I think if you're committing to an empty leg, you also have to have a backup plan. And we always make that very clear to our customers who are buying into legs. Actually, empty legs are less than 5% of the flights that we do read specialize in dedicated charters where you know, absolutely, that aircraft is going to be there for you, and you can control it.
-Yeah, actually, I've been looking at the pricing on your website. I've been trying to understand a bit better the, you know, the value of this executive jet flying. And actually, for example, on PrivateFly.com. There's a very user friendly interface just like that, you would find it on an airline website. And I introduced a flight, a theoretical trip from London to Dubai in July with a mid range, mid size jet, which I guess it's the minimum you need for for these legs of trip, it can carry up to eight people, and it's €50,000, one leg, but that's for eight people. So actually, if you compare that with flying business class on BA, for the same amount of people that would be between €30-35k, so it's a little bit more expensive, but not so much. So I guess that's, that's one of the most important sales arguments is actually that if you're flying a group of people, it can actually be quite cost effective once you factor in all the flexibility and comfort
-And this is why many corporates consider private aviation for business too. I think in the vast majority of cases, it's always going to be more expensive than an airline. No matter how many passengers you put on the jet because of course, when you charter an aircraft, that whole aircraft is yours. So it's the same price if you have one or eight passengers flying in your example. But if you're a business and you're flying your senior execs, especially at this time of the coronavirus, being able to access the aircraft quickly with limited exposure to other people and to be able to control the time that you depart to be able to control the environment on board. So you can talk about the meeting that you're just about to fly into, or you can debrief it on the way home Without worrying about who's looking at your laptop from the seat behind or who's overhearing the conversation. So there are many benefits to private aviation. I think it's always generally going to be more expensive airlines. But for some high networks and corporates, they see the benefits on that basis, as you described that it's comparable at times to airlines if you have max capacity within the aircraft.
-Actually, you mentioned the pandemic. We have not gotten to this topic yet. Although I guess we have to mention it somehow because it's a topic of our times. And I just wanted to ask you, how do you see this pandemic affecting the long term prospects of the executive aviation market because I guess there are two conflicting, contradictory effects here, which I don't know which one will be stronger. One is that people are, obviously, traveling less. But the other one is that as you mentioned, some people might prefer some people, obviously, a relatively small number of people. But that might include many of the people that are currently flying on business class or first class on some long haul routes, they might actually consider private flying because of all the risks of being exposed to other people having a more secluded experience. So how do you see these two effects working out here in combination, who's going to prevail?
-I think, like many industries, where we're in very uncertain times. But if we look back at previous events, we can see that private aviation normally has a surge of demand when the airlines have been disrupted by bad weather and snow and ice hit certain areas. When airlines have employment issues, pilots going on strike or indeed they are traffickers, causing issues for an airline schedule. Whenever there's disruption to airlines, we see private aviation, stepping in and filling the gaps. Now, I think we all understand that when an airline hasn't flown for months, it's going to take a long time for that airline to recover and gear back up. Pilots will have to be retrained and aircraft have been on the ground and will require heavy maintenance. And indeed, most airlines are not gonna have the same schedules as they did before they're going to be cutting back to the most profitable routes. So I think of all of those factors combined with health, there is a good chance that especially in charters, where customers might be using private aviation for the very first time, we could possibly be more protected. Certainly onboard the aircraft that we are utilizing, we're ensuring that the interiors of disinfected with products which kill the virus for up to two weeks and indeed the aircraft are cleaned after every flight and we're really looking at the whole customer journey to reduce the impact of the likelihood of picking up Coronavirus. So there's a lot of unknowns. But ultimately, so many industries follow the economic cycle. So certainly some uncertain times ahead for the industry.
-I think there's an opportunity to recommend to anyone interested in this topic to check out your website, PrivateFly.com, because there you have a very series of posts that are explaining how you clean the aircraft. Well, you or the operators in this case, because you're the aggregator. There's a lot of very interesting information in there about how the different private jet operators are adapting to the pandemic of their cleaning aircraft and all this information related to these very strange times we're living through. Actually going back to the booking process...So it's basically it's like, like that of an airline in many ways. There's one thing, though, instead of selecting the type of feed you hear you select the type of airplane. There are different categories of airplane that you can book based, mainly, on the size and the range of the aircraft, right? Can you elaborate a bit more about how you how you divide this market in different categories, I think there's a as you mentioned earlier, there's the the larger aircraft or the VIP converted airliners that would be basically like a commercial aircraft that has been converted to carry a small number of people and, then, they can go all the way down to very light aircraft. Some of them are not much larger than a private car. So how do you divide this market? Can you explain the different categories?
-Of course, let's start with a journey that you want to fly between two places which don't have an airport at all. So you might choose to fly in a helicopter. We can't forget the helicopter sector is very important for those types of journeys, especially where you're flying to a remote location, which isn't served by an airport. After helicopters, you have a section of a group of aircraft we have with propellers. Now, we recently in Europe, the turboprop single turboprop aircraft have been allowed to fly commercially for the very first time. So we have the aircraft light and a PC 12 with just one engine, which is a turboprop at the front. And that is a very cost effective way to fly privately. And the added benefit is they can utilize runways which are either very short or indeed with the PC-12 you can land on a grass. So that's helicopters and then propeller aircraft. And then we go up into the jet into two private jets now, the entry level jet they're called very light jets or VLJs, for short. Now the experience that you have on board and a very light jet might be similar to getting into a London black taxi. It's a small cabin, typically with four seats and you will have limited facilities some do not even have a toilet. They're ideal for short trips. You're in Barcelona today, so if you wanted to fly to Parma, a fairly short trip just with two or three people, the VLJ would be an obvious cost efficient way to fly longer trips, or when you need the facilities and a toilet or a catering on board, then you would move up into the small jet category and then into the mid size category. Now, two things are happening as you step up the categories one, the cabins are getting larger so you're beginning to stand up taller in the cabin, because of course, on some of these light and small jets, you could not stand up tall. I'm 184 centimetres, just six foot so I would need to get into a mid sized aircraft before I can stand without hunching my back, and I think many customers are quite surprised when they fly on a private jet for the first time. Actually, some of the entry level aircraft are quite small.
-Yeah, indeed! I had the same impression when I was in the cabin. I think it was Honda Jet some time ago. It was really quite small, smaller than I expected, but of course it still has all the flexibility and advantages of a private jet, but it's not as spacious as many people expect.
-Yeah, as we move onto those larger sectors, the cabin size, are getting larger and the facilities are improving, but also the range of the aircraft, they can stop flying for longer distances. So the mid sized cabins are capable of flying across Europe for up to four hours, with plenty of baggage space because of course as you move up the categories of aircraft, baggage facilities improved as well. So if you wanted to fly longer than four hours, for example, if you now want to fly from Barcelona to Dubai, you're looking at those large aircraft. Anything further and you're into the large cabin or the long haul aircraft. Now, in this category of aircraft where you have products like Bombardier Global and the Gulfstream, you might have heard of the Gulfstream G600 or the G650. These are the top of the range aircraft that are capable of flying to up to 14 hours. So anywhere in the world with one fuel stop recently. Last week we flew a family repatriating to New Zealand, from London, with one fuel stop at Kuala Lumpur on the way so they have the range of a modern airliner, such as a Dreamliner. And above that you then have already the converted airliner. I mean, when you go above the long haul and the large cabin aircraft, you're into a very small sector of private aviation, which is the VIP airliners Normally these are flown by heads of states, by presidents and royal families, and of course, some very high net worth flying them as well, but it's a small sector. They can be used for corporate events. If you are taking a road show or if you want to take a number of your employees on a trip. Some of these airliners are converted to old business class seating. So as well as some aircraft having very small numbers of seats for example, 20, but VIPs may be flying a larger group of passengers.
-Yeah, I'm going to post a link to an article I wrote about these converted airliners VIP airliners. I wrote it for CNN a few years ago. And there are plenty of pictures there. I'm going to post a link in the transcript of this call so that people can get an idea of how these look like on the inside.
-So, that is interesting, isn't it? maybe I'll because often when you talk about private jets and private aviation, that's the first image that most people would have in their mind luxurious bathrooms, wide cabins, but actually, the majority of people who are flying on private jets are at the other end, you know, it's very light and small jets. So while the public has this image of private aviation being a very luxurious way to travel actually, for the majority of passengers the luxury is being able to depart at the time you want to fly at and fly between the airports that you're choosing rather than sticking to an airline schedule.
-Indeed! And, actually, you are offering your service as well as a white label through some general travel portals, right? so you can actually book private jets through mainstream online travel channels...
-Yeah, this started at the beginning of the company when, like any new startup the challenge was “how are we going to find customers”? Now it's especially hard to find new customers when your client base is high net worth and execs at large companies. These customers are guarded by other people. You can just cold call them, you can't make meetings. So how are we going to get in touch with them? That was the problem that PrivateFly had at the beginning. We had in our business plan that 50% of our customers would be direct through retail channels and 50% would be through partnerships. So we partnered with concierge services, hotels, partners who already had customers who would be flying by private jet but were booking through another channel. So we were able to offer concierge services and high-end travel agents the ability to book private jets for their clients, but using our technology and private flights expertise behind the scenes, as PrivateFly grew, our direct sales grew rapidly and the partnership channel reduced its size. So at the moment, our partnerships are roughly 10% of our revenue, still very important to us. And we have some great relationships with some airports and, and travel consortiums like Virtuoso. So we enjoy those partnerships. But over time, they've become a smaller part of their overall revenue.
-One area where you definitely stand out is actually digital channels. You website has a very interesting blog, as I mentioned earlier, where you can learn a lot of things about private aviation, even if you don't fly private. It's very interesting, you can get all sorts of information. And you also run a very successful initiative, which is called “the most beautiful airport approaches”. It's got plenty of coverage from some of the main media outlets in the world. And it remains wildly popular. You run it every year. And I must say I've been a member of the jury a couple of times. Can you tell us a bit more about this initiative and how this has been very important as well for you to get your brand better known out there and get lots of media coverage?
-Actually, there's a lovely story behind this campaign! In the early days of PrivateFly we were a small team. What united the team, and still does, is that we're all passionate about aviation. I've made it a very strong point of our recruitment process. We employ people who love travel, and in particular love aircraft and are very knowledgeable about them. So we all came into work, there were less than 10 of us at the time, and on television the night before, there had been a program about the 10 most dangerous airports. I'm sure a lot of people have seen similar programs, and we're all discussing which one of those airports that we would have the courage to fly into And that was actually our bookkeeper at the time, who challenged us and said, “Well, I'm not really interested in danger. I like to fly to people, places which are beautiful. Where are the 10 most scenic approaches that you can fly to?” And we started listing them. And that was on the blog that afternoon. And that weekend, we suddenly found that a few of the broadsheet papers in the UK had covered the story. And I think what was particularly interesting was that it was a very visual campaign, where we brought back some of the enjoyment, some of the glamour of flying, which had been sucked out of the industry with so much attention on low cost carriers. And so we were able to bring something very visual and celebrate flying. So that was a campaign which started in a very entrepreneurial spirit and grew from there. And then of course, we asked leading travel experts, like yourself, to come up with a shortlist of airports each year, which the population that could and our users could vote on. And it's something that we really enjoyed seeing develop. And it's really a tremendous way of celebrating flying.
-Let's hope we can celebrate flying again sometime soon! And it's certainly been a pleasure having you on the podcast here today. And, yeah, hopefully we will be able to have you again here for another conversation at some point in the future, to continue digging into this very interesting, fascinating world of private aviation. Adam.
-Well, thank you, Miquel. It's been really enjoyable speaking to you. And I think what we've learned about aviation over 110 years, it's always been a cycle. It's always been ups and downs, but actually the benefits that flying can bring both to the leisure travel and the corporate travel very heavily So we will all look forward to the day soon that restrictions can be lifted, and we can all get back out and start visiting the many wonderful places that there are!
-Let's hope so! And have a great day and stay safe, Adam!
-Bye for now!
-Bye!