The Allplane Podcast #55: building a new generation airline, w/ Tomislav Lang (Flyv)
Today on the podcast, airline entrepreneur Tomislav Lang is going to explain the concept and business model of Flyv, short for “Fly Virtual”, a new carrier that aims to leverage algorithms and hybrid-electric aircraft to provide a new type of air mobility service in Europe.
Having managed, Swiss regional airline Skywork Airlines from 2008 - 2013, Tomislav knows well the European air mobility space, this led him to explore some ideas to launch a new type of airline that, rather than competing with the Lufthansas and Ryanairs of this world, links, instead, the many second, third or even fourth tier airports between themselves.
On this episode of the podcast Tomislav explains how the team at Flyv is confident that the combination of algorithms, that will allow it to allocate and adjust capacity across the network on a constant and. very flexible basis, and the economics of a new generation of hybrid-electric aircraft, such as the 9-seater being developed by Electra.aero, will give it an edge in capturing a share of this latent market.
How regional air travel may look like in Europe several years from now? Tune in for today’s episode of the podcast with Flyv founder, Tomislav Lang!
Download this episode from:
Apple Podcasts / iTunes, Spotify, Google Podcasts or Stitcher
Things we talk about in this episode:
What is flyv and how it differs from a traditional airline
Tomislav previous experience in regional air transport
How flyv will design its network and price its service
What technologies does flyv rely on for its project
Why Electra was selected as the right airframe for the job
What is the current status of the Flyv project and next milestones
Podcast Music: Five Armies by Kevin MacLeod
Link: https://incompetech.filmmusic.io/song/3762-five-armies
License: http://creativecommons.org/licenses/by/4.0/
Interview Transcript
(please note that, although we strive to make it as close as possible to the original recording, the transcript may not be 100% accurate)
Hello and welcome to the Allplane podcast
Here with the people that are redefining the future of commercial aviation
As usual, before I introduce today’s guest, let me remind you that you can find all the previous episodes of this podcast as well as many other aviation stories on the Allplane website: that’s allplane.tv - allplane.tv
And now let’s move to today’s episode.
As you possibly know, here on this podcast we like to speak with entrepreneurs that are trying new things, new concepts in air mobility.
And one of them is Tomislav Lang.
Tomislav is an experienced aviation professional. He used to run a Swiss regional airline called Skywork, based out of Bern, and is now the founder of Flyv, short for Fly Virtual, a new airline based in Germany that aims to connect smaller airports all over Western Europe.
Rather than competing with large airlines, such as Lufthansa or Ryanair, Flyv will be operating a fleet of small 9-seater aircraft between these many niche markets .
And to make it work they will rely on software and algorithms to constantly optimize their network design and the capacity deployed
They also plan to introduce hybrid-electric eSTOL aircraft as soon as they become available.
This type of air mobility is one of the potential use cases for the new generation of electric and hybrid-electric aircraft that are currently being developed, so I was particularly interested in learning how this may work in practice.
So, without further ado, let me welcome Tomislav to the podcast…
Hello, Tomislav. How are you?
Thank you. I'm fine. How about you?
Before we start, I just wanted to ask you, where are you joining us from today?
I'm joining you from beautiful Germany, Munich,
Munich, great city and the big center for the whole new Air Mobility industry, quite a few companies out there…!
We're based, we're based in the outskirts of Munich and actually, right, just in the near vicinity of our place, we have Airbus, we have a few other business companies…there's quite some interesting projects going on due to the history of aircraft manufacturing here in the Munich area.
So basically, you're gonna tell us today about a very interesting, very innovative project that you are leading. You are the founder and executive of flyv, which is short for “fly virtual”, can we say this way? Fly virtual? Correct, which is a new concept of airline. And I'm gonna have lots of questions for you about this new concept, because I have been checking your website, and I found it quite interesting. So you are neither the typical scheduled airline nor the typical charter airline, what can you tell us about flyv?
Thank you for this great question. I want to start with a phrase, with a vision that my father 30 years ago envisioned, and he was an airline manager for various airlines as well. And the time he had an interview, he was asked, What is so special about what you are doing? And what he said basically gave the initial thought on everything that I've been doing in my career for 32 years, the best way to travel home is by air. And he was totally right. And that was 30 years ago, and I have known aviation for so many years. And I had the big luck to work in a great team from 2008 to 2013. I work at the site of an aviation pioneer. He was the owner of Skywork. And he taught me a lot about aviation, how simple aviation can be. And the most important thing also here was focus on the customer. Flying can be done by everyone. Basically, it's a technique that you can learn, but what you cannot learn so well is how to transport people in the right manner. And yeah, then we evolved into Skywork airlines. I was the founder and CEO and owner of SkyWork airlines. I sold this company in 2013. We had great investors on our side. And we really had a great team of 180 people who work every day for this company and we reach great numbers at the output of beyond
May I interrupt you for a second…skywork with a Swiss Airline, right?
Yes, it was a Swiss regional airline that started in business aviation and evolved into charter operations. Then we were approached by two investors from Switzerland that said “we want to have the capital city of Switzerland connected to the world”. And we actually connected it down to more than 35 destinations. We've been very successful due to the fact that, yeah, aviation is not easy. Unfortunately, the company ceased operations in 2018. But nevertheless, I think what we gave over to the new investors was a great airline, which was proof that this company was still flying and they did a good job. So everybody who came after us, did a great job and did things better than we started. And throughout all this time, the last 10 years, I was thinking about what could have we done better. And then I met this young guy Anton, who was the CEO of Flyv and tremendously great, great personality with a high intensive knowledge about aviation and financial figures. I called up a good friend of mine, who is our CFO and also owner of flyv. So we're not alone. And I told him, Look, I have this great idea, listen to it. And I called up my good friend and coach and mentor, who was as well, owner of Flyv and I told him, join us and listen to us. And what we told them is we want to form and shape aviation differently with a new technology that is now in place with new involvements coming with aircraft manufacturers like Electra, with all the knowledge that we have in our team, let's build something new, and give built flyv. So what is flyv about our vision is that we will transport people in a different mindset. So it comes customer first, we will be customer-centric. And through our advanced technology, our own software that we're building, basically, we're envisioning that our network will be designed by the customer every day, every new and without a fixed schedule. So we are serving the needs of our customers to travel faster and quicker, with a big vision that we can save everybody's time tremendously. At least, the lowest goal is to save every business or traveler, one hour a day, just because we can get them closer and faster to any place, he wants to travel better than any other next best alternative. And we want to be efficient, we want to be sustainable. And we looked into the market. And we said yes, we can do that. And this is why we are the airline for the customer, we will make your travel easier, more sustainable, more efficient, and be a supplement to the existing aircraft infrastructure and airline infrastructure that is very important for us. We don't see ourselves as the ones fighting the big ones, we see ourselves as the supplements that connect regions to these central markets, to core markets in order to make travel easier and to get more cars off the road. And to get more people directly into the air by saving also and flying environmentally friendly. That's in a nutshell what we're going to do.
I was just taking notes now because I was just gonna ask you a few things about some of the things you mentioned. Basically, you have this sort of flexible model where the capacity available is adapting to demand. And my question here is how this differs from a regular, let's say, charter on demand? Is it more in the domain of executive aviation? And the other one is how you are matching according to what parameters, what tools, are you matching this capacity to the demand? Let's say if you are adjusting your routes, you're adjusting your flights on a continuous basis, how can people plan how it works in practice?
So, very, very good question. And that will be the biggest challenge for us actually, the biggest challenge to grow in the market. So we're focusing, to start in the center of Europe, most likely in Germany, but we're open to talk to any country and to any place. Why is that? We cannot spread this message all around the world. This will not be realistic and we are professionals, we will not promise something that we cannot hold. So focusing on one market on a core market will be basically starting with some general routes that we know that exist out there that airports need. We always have to bring into the fact we don't need to fill our buses. We're not looking at filling 180 seats. We're looking at distances 300 to 700 kilometres.
One question here. There's one point here, we're going to discuss later, which is that you have an agreement with one of the new generation of electric aircraft called Electra, new technology, different cost structure. We're going to discuss that later. But before we go into this, I have a question: are you going to operate your own fleet? whose fleet? whose aircraft? Because the first idea I had is: this is a bit of an optimization problem you are solving, right? So you are, I don't remember what's the mathematical world for that, but basically, you are solving by a number of constraints and solving a demand capacity allocation equation. But are you planning to use other people's fleets and allocate that capacity from third parties? Or are you going to be operating your own fleet as well?
Very good question as well, because it would be great if we could use airplanes from others. But the airplanes that are out there are old, they're outdated. And in order to understand how to match demand with capacity in order to have our algorithms, our product and fulfillment algorithms that our team has already built, and that are just being built in our own software, It's also a lot about digitalization, we look into also having more efficiency through having a digitized approach and everything that we do from the first day on. And therefore we said, after many thoughts, we have to do it by ourselves, because there's nothing out there. So on the aircraft side, how are we going to look into that, I mean, let's be realistic, before we have a full electric flight, and before we get fully sustainable, it will take some years, if you listen to the industry, some say five years, others ten, others are very skeptical. We're very positive and optimistic. Because we have already analyzed great aircraft manufacturers who we are talking to already, which is the technology aircraft we're looking at, the P-2012, a nine seater piston engine that can basically open up the market into very small niche airports, nine seaters are used by a great airline in the US, by Cape Air. They're very successful with this airplane already. And Tecnam is already looking into sustainable aviation, this will be the start of our operation. So we're looking to start with six airplanes in our core region. And obviously, we will have a mix of fixed routes and demand driven flights. Because we want to prove that we know how to manage an airline. That's number one, we have to get in contact with our future customers and show them “look, we have a great, easy to use product, we can fly we land safely, we fly safely, join us” and through customizing and through offering our customers from the first day to tell us from where they want to fly, we will gather data, through modern technology, through big data, through mobility analysis, we are looking into how traffic behavior, looking in specific markets. And what we have not talked about, we have a third partner on board. We're working together with Bloxmove, a software platform based on crypto and blockchain technology, who want to gather all mobility sources onto one platform and distribute all participants from the mobility market into the ecosystem. And that is important for us. Again, we're a supplement. We're looking into the whole mobility world. Who would have thought that we would buy everything through Amazon, who would have thought that we would order an Uber just like a taxi. But we see ourselves as a third dimension in this mobility part. The first ones, there is no one out there looking at that. And so we will grow with our own fleets. And our projections show that by 2040, our fleet could reach up to 180 airplanes only for Europe, by transporting 1000s of passengers a day performing hundreds of flights a day, hundreds of flight hours. And by proving that the system is working, and through growing the algorithm, we'll start learning and through artificial intelligence, our routes will be created more efficiently. And we have three, three clear product types here. So you will have a direct booking possibility. So tell us, I want to get there fastest and quickest. You will book your flights, and we will guarantee the flights three days before departure. Our algorithm at the beginning will run the system and tell you “Miquel we're picking you up in your timeframe that you gave us between seven and eight o'clock in the morning and you will arrive directly at the airport of Munster-Osnabruck at eight o'clock” because actually we're quite competitive also on the flight. Then you have a second product that is a little bit more flexible for us. When you say “well I'm a little bit more flexible on my time. timeframe, I can depart a little bit later and arrive a little bit later. And I'm also flexible on the routing”. So our algorithm will be less constrained. But you gave us this flexibility. So we could land somewhere in between, get a few more people on board, and fly. So that will be a little bit cheaper. And the third product could look like a saver product where you say, “Look, I just have to arrive on the 7th August, at the airport of Modena, at nine o'clock in the evening, whenever you pick me up, I'm happy, just tell me right ahead, and I will be there”. So by the booking, you get the guarantee, we are guaranteeing the transport and this is what was so important for us why we have to be the airline, because we have to show the customer that we are taking responsibility. So we're not working with other people's airliners where we cannot control the system, because we need to control the system in order to learn from the system. And there will also be a lot of learnings to do on that the more passengers book us and that's maybe already a request to our future passengers to tell us where you want to fly at what day because we will arrange the network to grow. And obviously what we have seen in our business plan, the bigger the system scales, the more airplanes we have in the system, the more flexible the system gets. And this could also lead at a certain stage to direct bookings. So you will be setting imagine and that's what all about advanced Air Mobility is at the end, you're sitting somewhere on a highway in a traffic jam. And you have to get to your family by nine o'clock and you will never make it on the highway, you take the app, you ask us through our technology provider, Bloxmove, what could be another possibility to get to my final destination quicker. And I'm quite positive if we do things right, we will have a better option than having you standing in the traffic jam,
Lots of different nuggets here from different trends in transportation within the last few years. I mean, on one side, you are trying to aggregate all these very long tail of, let's say, niche markets, like people moving between all these different markets that are not huge. The second and third tier cities in places like Germany, a country that has many economic centers distributed across the whole country. And also, the other thing that comes to my mind is companies like, for example, Groupon that became popular a few years ago, where as soon as you got to a certain critical mass of people purchasing something, that thing, that offering, became viable. I don't know if that's also a parallel that you would say is valid here. I mean, it would be that if you collect enough interest for a certain route, that route immediately becomes viable on your network.
Because you got the point, that's the approach because, look, when I was CEO and owner of Skywork airlines. Do you know what my biggest worries were? you have all this data about catchment areas, you have all this historic data. But first of all, airplanes are not efficient. We're not efficient for those small routes. There were great airplanes, but you could hardly make profits with them. We managed to make profits, but at a very high cost for the customer. And thirdly, you don't know whether you're right. So you will lose money by starting up routes. And we want to be efficient. We don't want to fly empty. I mean, look what's happened in the past few years and past few months. Once Corona came in through old regulation, airlines had to fly empty just to keep their slots. This is exactly why we want to offer the customer to tell us and we will transport you if you have a need. And we can provide the needs. And from some airports, yes, for sure. There will be routes that we will know are feasible and we can fly them every day. But they could not be flown until today because the technology was not efficient enough to only transport nine passengers at serious cost. With a business aviation airplane. I mean, we look into costs of an hour flight with a smallest possible jet engine of roughly about 3,500 euros per flight for one flight hour. We're far below that with our airplanes. And the next good thing is with the current technology the P-2012 and the future Electra hopefully, and we're crossing fingers and working strongly together with Electra to make this happen, because we strongly believe that Electra is the right approach with a fixed wing, hybrid electric airplane. We can open up the market to so many places. We can land at airports below 1000 meters with the Electra, we can fly into airports below 200 meters and that is opening up all certain variations of markets that we also don't know today, because they simply didn't exist in the past, because they were not possible to fly into, when I look into a network rollout plan for Germany, we're looking at an approach going from one side of Germany, from the north, to the south, from the east, to the west, and to have those routes interconnected. By opening up markets and getting you closer and only looking into what we can do today, we can already fly into more than 100 airports or airport pairings that could not be done with other airports. And that can go exponentially when you put this possibility over the European map.
It sounds great on paper. But the problem I see here is a bit like the coordination of the different moving parts here. Because for example, if I'm a traveler, and I want to travel to a certain small city in Germany, how can I be sure that there's going to be enough demand to get there? And that you're going to be able to provide that particular flight? And and also, how are you making sure that you have the capacity available to serve all these different points? I mean, I don't know if there's a bit of a chicken and egg question here. Obviously, as soon as you get a critical mass of people using the system, things become much easier. And you have it makes sense, operationally and financially to serve those markets. But I guess the big difficulty is to get to that critical point…I don't know if you have run some simulation to see what's feasible.
Great, great, great question. Actually, I have to be very, very specific on this point, and very truthful to you. There are always things that you don't know, what we see is that we can run a profitable model, and that we can scale the model. That was the first important question, can we build up an airline that can scale and that can bring profits to our future investors. And this is why we're already seeking to offer investors and we have seen throughout the feedback we have gotten from aircraft manufacturers, from airports, from regions, from private people, that they see that this will be necessary, because on the one hand, you have the aircraft manufacturers, but nobody's thinking about how are you going to close this gap commercially. I'm not telling you that this will be profitable from day one, we will be profitable from year five. And that's the truth. The reality is that with our calculation, we're looking into a 40% utilization of the fleet in the first two years, and a 30% load factor in the first two years as well. So when we talk about utilization of 40%, that's below, far below what we need to do. And the load factor, we're actually talking in numbers, two flights a day with 2.5 passengers a day. That's very conservative. And you're right, we have to be conservative. And this is always the toughest part at the beginning of raising up such a company to have this gap closed. And we are trying to close this gap as soon as possible. But since nobody has done this before, there is a huge upside. But you also have to believe in this, this flyv concept. And we believe strongly in it and our partners believe strongly in it. This is why Electra said, we have talked to so many people, but we believe that you have the right answer to our new technology. We have talked to Bloxmove, who said you have the right answer to extend the mobility service from cities, urban Air Mobility, urban car mobility and car sharing into advanced air mobility. And I think the chicken egg problem just to finalize that is what comes first, will we first fly from rooftop to rooftop? Or will we first use current existing infrastructure? And my team tells me clearly we want to focus on flying door to door with current existing infrastructure. But yes, we also believe that urban Air Mobility one day will be something that we will use.
Indeed, one of the other parallels that comes to mind obviously is Uber and all the new industry of ride sharing and actually Uber has this, I think it's called Uber Pool, or something like that, where you can get different people to share a car. So that comes to mind definitely in terms of the sort of fleet that you need to fulfill this. You mentioned 180 aircraft in 2040. I guess that it's mainly in Germany, or you are planning to expand to other areas as well.
No, no, this is what I mean that's for the future Yeah, of course we can look into three years but if we look into the future and if we start to get out of the realistic zone and being a little bit more visionary, we're looking into Europe. So we will expand, we want to expand. And why do we need to expand? Because there is already a strong movement in many countries like the Nordics. And also here in Central Europe, like France, the Netherlands who say that small regional routes can only be flown in the future, if you're sustainable, if you're efficient. And if you don't use fossil fuels, and there's a huge market opening up, because nobody is looking into that, in that specific sense how we do and again, we want to be the supplements to still connect people to the world. So yes, we want to expand into into Europe, because like that, we could be a great feeder for into intercontinental flights, long haul flights, and offering a huge additional market upside for all of these markets that do not exist yet and get the people quicker to the airport, and automatically feeds the aviation ecosystem more sustainable, which, on a big page looks like to be very, very fruitful.
And Electra is the aircraft that you have selected. And for the longer term, obviously, because not yet available at the moment.
Yeah
What can you tell us about this electric aircraft? I mean, it looks really cool on the renderings I've seen, in terms of cost in terms of capabilities, why these aircraft of the of the many that are now being developed? What can you tell us about it?
Well, first of all, we are an airline. So also here, why are we different from maybe Uber or others, the aviation ecosystem is highly complex. And it's not just setting up an airplane somewhere into the region and starting to fly. I mean, we will have to look into the legislation, we have to assure quality safety, and have the best people on board. And we already have great people who are former GE Aviation, Amazon air managers, who worked for many airlines like myself, or our flight operations department, who have a huge vast knowledge in aircraft training in crew training, etc, etc. And we have decided for Electra, because it's a fixed wing, and we're looking into fixed wing concepts. And we said, what is feasible nowadays? And what can we do in order to fly to all of these special airports? Because the question and the answer is not only “Oh, we have a battery, let's fly two hours and land somewhere”, because you also need to recharge this battery. So that was the first thing where we said, okay, they have a hybrid system that makes sense, like this, we're not necessary coupled to having an electrical connection cable to load the batteries, we can fly in and fly out without having the need to recharge the batteries during the ground time, because also here, it's an aircraft and not a standard craft, so it needs to fly as much as possible. From Electra, we visited the manufacturing side where they built the electric propulsion engine, which actually is being built in Switzerland, very special. And we've seen the engine already run, and all the critical questions that we have provided, when it comes to fuel cell capacity, when it comes to propulsion systems, when it comes to readiness. All the answers were answered in a very clear and very good approach so that we were convinced that the partner we want to work with our approach, not saying that the other approaches are wrong. But I mean, we cannot work with 10 aircraft manufacturers, we had to decide to go for one. They loved our idea on how we want to use the airplanes. And basically we were looking for a win-win situation, both startup companies, both were very realistic, that this is a marathon, and that maybe one of us will not survive the marathon. Currently, I believe we're doing good, and we had good training, we still have great stamina, we can still walk a lot of miles together, but we're helping each other, you know, by giving our inputs from the operational side by understanding what they need by understanding what we need. And we're building this together and again, the whole industry needs to supplement, it's not about you against me, it's more about how can we get this thing running because we believe so strongly in it. And we see that there is a need for that as well. So let's bring this to the customer that that was the reason and that technology of Electra is very interesting because we're working with a technology which is called eSTOL, so it's not an electrical vertical takeoff and landing airplane. It's an airplane that just through its technology part needs less power on the wing in order to have shorter landing field capabilities than any other airplane. And on this topic, you really have to go into details with Electra because they can explain it much better than me, we know that this technology has existed for many years, we also know that the electron has specified and made this technology much better. And with the lighter engines they have, actually, it's working efficiently. And as far as we know, they're planning to have their first demonstrator available this year. And from the day they will successfully launch this, this demonstrator, we believe strongly that they can hold the plan to have the first commercial aircraft manufactured in the time that we need in order to scale the system.
So what dates are we talking about here?
Well, looking realistically into the future 2026-27 That's something that we could see the first commercial installed electric aircraft fly, that's in line with many other manufacturers, and technology is evolving much quicker than in the past. So this is why we said, Okay, we're going for that. But that's also why we said, we also have to start now, because we have to be ready for this technology. And this is why we have found this great manufacturer from Italy, Tecnam, with the P-2012. Because basically, this airplane today gives us almost everything that the future lecture will give us. So also these two manufacturers will not be in a fight with each other, they will be supplementing each other. And we also want to build our base and scale the system later, hopefully on bigger types of airplanes. I mean, there's already sustainable aircraft planned by big manufacturers by new manufacturers with more seats. And once our system runs, we're not necessarily only looking into a nine seater market, we could also scale the system on the demand that we have created by then, by just growing passenger numbers.
And a crew of one or two?
Well, the Tecnam P-2012 is certified to fly with one pilot and Electra is already looking as well as with autonomous flying. But let's be true before we start flying autonomously, I also mean, and I'm looking for myself, I like to have a pilot on board. So they are piloted airplanes with the capability of being more efficient by reducing crew cost by also looking into also an autonomous flight in the far future. But currently with what we see is nine seats are the perfect fit to start up this Mark,
Do you have an AOC or are you applying for an AOC?
Well, the flyv team is currently applying for an AOC, they're looking into this in Europe. I mean, for us, it will be necessary to work with a European administration that offers us all the rights that we need to fly between countries. There are a few of them out there. And yes, we will apply for all our own AOC once the funding is ready.
And another question that came to my mind is, in practical terms, let's say, I'm flying with you, at some point in the middle of Germany, a small airport. What sort of ground infrastructure do you need? And what's the process? Because right now obviously a big part of the of the flying experience or not so good part of it, actually, it's all the process of going through the airport security checks, making sure you have all the paperwork with you boarding pass all of that, how would this work in in, in a model that is more similar to let's say, an Uber or a taxi that you just show up? But still, I guess there are some regulations that you need to go through? So in practical terms, how would the process look like, let's say, I'm somewhere in Germany, I need to fly to another city that is like 200-300 kilometers away, guide me through the process…I mean, I guess you're gonna go through an app where you're going to be able to submit some sort of bid or something that will get you through the process. How would it look like?
Great, I will do that. So as I said, you have already booked your flights in advance like any other flights, three days before departure, we inform you do “Miquel, your flight is departing” Let's take a clear example. Augsburg airport at nine o'clock in the morning, through our third partner Bloxmove, you can also see whether they can offer you a solution on the ground to get to the airport.
One question here. So let's say in this case that you are mentioning, I have already booked like in the traditional way. So I want to go from A to B. Could it be the case, let's say one week or two weeks before that I need to do, it's not yet sure whether there is going to be
Once you book we will fly. So no matter what once we have I mean, that's clear.
That's it, because at some point, it was not entirely entirely clear to me. I mean, even before that, let's say, because of this flexibility aspect that we were mentioning, let's say, is there going to be a case when, for example, I say I need to fly from somewhere near Munich to somewhere near Nuremberg, or Regensburg. And just trying to think here, the scenario that I would like to fly from point A to point B, but I'm not yet sure whether it's going to be capacity, but then you get this input and say, “Well, you know, we've got like four people that have expressed the need to go from point A to point B, so we make a plane available for these four people”. And between that timeframe, I don't know if that's a scenario that would work. Or by that point you might already have worked out well, between this point A and point B, we know the demand is x. So we know there's going to be more or less this demand, and we are allocated an aircraft at that point. And then people can book. I don't know up to what point flexibility plays in here.
When scheduling for the customer, it's very important to understand your question is something that we have to solve, but that's something that it is not our customers who will need to solve it. Once you say you want to fly from A to B and you have booked a flight, you will fly from A to B as expressed one day or one year in advance, the earlier the better for us. But that's not of your problem…
People are gonna be able to book straight away from a close number of destinations, I guess…Okay!
For sure. And this is why we have to grow slowly, we will not offer any possible combination, we will have a clear view on second tier two second tier and upwards at the beginning, from specific regions in Germany. And once we have started flying, we will gather information from our customers to understand what else they would like, and open up more possibilities on those routes that we're flying on so that we can have these routes also included in our system. But that's something we're solving for the customer, not the customer will take care of that for us. We are taking care of that from the beginning.
Okay. Yeah, thank you for clarifying this point. Because it wasn't clear to me at one point that it was a continuous optimization or discrete optimization. More like let's say, like, an executive jet broker, like, let's say, that I need to fly from, I don't know, from Munich to Nice next Monday, what aircraft do you have available for me?
When it's available, we will fly you. If you cannot book it, you cannot have it.
Okay, these city pairs are the ones that are going to be adjusted on a continuous model…on a more or less continuous basis...doesn't mean every five minutes, but every every certain number of days or weeks. So I don't know with which frequency you're going to be adjusting this capacity on the routes, and I guess adopting the city pairs as well.
It's a constant optimization. It's a constant optimization of the system. This is why it has to be digitized. And also, to give you a picture of that, looking at Germany on a map as a garden, we are seeding small plants and the plants, the better we optimize them, the better they will grow from the inside out. It's all growing from the inside out. And growing slowly being realistic. I mean, I'm not going to promise that we are flying 500 Airport pairs. I'm just saying that would be a possibility for the future. At the beginning this is why I said we're using the main infrastructure that is there. And that also closing up a question, how will the product look like? Well, it's all about flying, it will be a very easy product. So with a standard boarding card, you will attend the airport, we're looking at not having complex check-in and security controls. I mean, we're under 19 seats. So there are other regulations coming to 19 seats and below, it is a complex operation above 19 seats. Our pilot will also be a flight manager and we will ask you to provide us with as much advanced information of your traveling needs from the beginning on, so carry-on baggage, no problem. If you want to transport bigger luggage. We're already looking also into a fourth possibility here to tell you why. “Why do you Want to carry your big luggage with you, let’s work together with our partner, for example, DHL or Amazon” and request them to pick up your luggage one day before, and the luggage will wait for you already at the final chain. When you arrive at your place, that's one possibility. Secondly, since we are basically looking into flying people back and forth and connecting them in a region, we don't foresee that the loads on luggage will be too complex and the aircrafts are built so that the pilots can, like in a business aviation, handle this aircraft all by themselves. And it's also all about efficiency. So we don't want this big infrastructure, we want you to park your car to be available 10 minutes before departure, enter the airplane and depart. It's all about not going through the complex notes to parking, expensive tickets, long security queues. It's all about being quicker on this on this route that we're offering to
What about the pricing? Do you have some orientation if price points are also regarding pricing? I follow with interest a few years ago, there were a few companies in Europe trying this sort of let's say flat fee, “fly as much as you want”. These models were designed for people actually flying sort of more like commuter planes, flying frequently between these secondary airports. It's a concept that in the US has worked more or less, but in Europe hasn't really taken off or really consolidated. So that's why I was curious about your model…
A traditional pricing model…and the price variation will be determined by the flexibility that the customer gives us. So anything from a standard business class ticket can go up to 1000 euros also, depending on the date and the time you book. So the later you book, the more expensive it gets. Yeah, up to very cheap tickets that but not cheap tickets out of the reason that we want to fly cheap out of the reason that you gave you more flexibility. So for example, you'll tell me as I said at the beginning, I need to arrive by evening in Hamburg, and I have no need to arrive there in any specific pattern, I just need to arrive. So you give me maximum flexibility. So I have the possibility to work in a multi step approach with you. So I could say okay, Miquel and Tommy said they want to go to Hamburg with basically full flexibility. Great, then we can fly Miquel and Tommy from Augsburg via Mannheim into Hamburg. But they give us flexibility. So therefore, they get a little bit of a cheaper price, because they offered us this flexibility. On the other hand, giving you a price now, our aircrafts are efficient. And they have shown that we can have competitive prices when we compare it to the current car train. And airline transport nodes that are not built on low cost concepts were not a low cost concept that must be very clear, very important, and how much efficiency we can get out of future technology. Well, we will calculate that once we actually know what the efficiency looks like. And that will certainly have an impact on fares on pricing. And additionally, we're now counting what is available today. We have not calculated what will happen once regions countries will say. And they will most likely do that. Once you fly sustainably, you don't have to pay certain amounts that others have to pay. And then we have room for improvement as well on the pricing for
Now, I guess you will be competing also with the land transportation in Germany, the trams and the autobahn are big means of transportation.
We don't see ourselves as competition, we see ourselves as a supplement to get you closer and faster to your final destination than any other transport node exists. We will for example, not fly on certain routes. We have already calculated where we know that the train is better, why should I compete with something that is better? So I'm rather using that capacity for something where the train cannot beat me. And there's many, many, many city pairs I can tell you that are computable. And I mean, looking into highway construction, rail construction. Yeah, it would be great to have fast trains like in Japan, but before this or if it ever will be built. We can basically without spending any costs or energy, use current infrastructure and connect exactly those things that we would need to build and spend a lot of a lot of supply and a lot of energy before you could actually use it. And that's our approach. That's Our approach on being sustainable, not by claiming that we're sustainable because we're growing trees all around Europe for every single flight we're selling. No, you're using what exists. So somebody has spent energy on that. So we're taking back this energy and using it for not competing, that's very important. Because then it's not sustainable. If I compete with a ride on a train, that is two hours, and I can fly it in one hour and I spend more energy, well, then I'm not doing it right.
So on what timeframe can we expect your rollout to happen? Do you have specific milestones that you can anticipate now?
Well, yes. Anticipating what I can tell you, we're still in the family, friends and fools phase. Now the next phase is to find exactly those people who are interested and who believe in what we're telling them. And obviously, running them through our numbers being very clear on what we have calculated, and being very rational. And looking into what is a realistic scenario. And from my point of view, a realistic scenario is that the flyv team is setting up an organization by 2023, starting in 2022. So building the organization, growing as an organization, applying for all the mandatory work that needs to be done in beforehand, going into the next phase with the next investors who have interest to buy into the big picture. And to build something that is very new, and supplemental to the industry, where they can make money with and find the right investors, and then basically start marketing in 2023. And having the first flight in 2024. If it's earlier, they will decide. But as I'm more in the founder vision approach, I can just give them all of my experience that I had with my company in the past. And I can just tell you, that earlier, you start marketing, and the longer lead time you have to build your future customers, the better. So I always emphasize pushing the plan a little bit more to the back than starting too early and flying empty.
Very good. Well, I think we cover a lot of ground many, many interesting ideas and concepts to unpack the question…
Sure, of course, after we have talked now for let's see, how long do we talk?
Well, almost an hour…50…more than 50 minutes.
Okay. Because I also want to have a learning for my team. And you will, and I really ask you to be very clear on that. After what you have heard today, as a customer, would you like to book it? And second question, on a scale from one to 10? Those guys are totally crazy. 1-10. I love that. And I see it. Where do we stand with me?
Yeah, I definitely love the concept. I think you're a little bit crazy. Not as much as I thought when when I started reading about it, because I you know, the first impression I got is that you were aiming to do something way more difficult, which is actually to create the sort of immediate on demand service, more of a sort of like a taxi fleet constantly buzzing around in Germany and taking people like, you know, from many hundreds of different points at all times. No, I think definitely. What you're doing, I think it's good. I heard similar concepts as well in the US where there's, I think, 5000 airports that are underused in communities that are not near a major airport, for example. So obviously, I'm not an expert in this sort of constrained optimization, I haven't run the numbers. Of course, I definitely think that in Germany, yeah, there's lots of distributed economic activity. And yeah, why not? It could be an interesting thing. Actually. I had a a trip in Germany, like three months ago, in a city that it's like, 100,000 people live there, it has a small airport. Maybe I don't pronounce it correctly. Schwabisch-Hall…it's a small airport…it's about one hour and a half away from the nearest major airport. So I rented a car and I drove, but you know, maybe if there was a service like that, I might have used it to get there. So that's a practical use case that comes to my mind now, but yeah, I think the electric aircraft opened up quite a few interesting opportunities. And there's there's quite a few people now working on how to find the optimal ride concept for the optimal concept for for the new possibilities that open up the new electric aircraft, so why not…
Great! Thank you so much for the interview. I liked it a lot. I hope I answered the questions…
Great. So I'm going to be posting some show notes. In the meantime, people that want to learn more about your company about your project, where should they go? Which websites or social media channels would you direct them to?
Well, we will direct them to our company webpage flyvirtual.global and if they have any questions, they can write to us through contact@flyvirtual.global or investors@flyvirtual.global and the company is also available on LinkedIn. The more followers, the happier we are!
Yeah, and I do that also for people that want to learn more about the Electra aircraft that we are talking about, the website is Electra.aero
…and our third partner, which is very important for me as well, because that's actually closing the gap on how people will get their blocks move.com. So block smooth.com is also very, very important because it closes the roads and the rail to the flight.
Yeah, obviously the digital software component is very important. It's what makes companies like Uber, for example, so valuable. It's a way they are able to manage all these different parameters and constraints that make the whole system work smoothly. So yeah, well, I'm going to be posting links anyway, to the show notes. And yeah, in the meantime, wishing you all the best with the project. And thank you so much for being here today on the podcast.
Thank you very much
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