Avinode Aims To Build U.S. Market Share

Online charter data portal Avinode continues to develop products for its charter operator and broker members but is not aiming to serve buyers of charter lift directly.

Some confusion about Avinode’s role may derive from comments made by Avinode co-founder and CEO Niklas Berg late last year, in which he discussed the company’s real-time booking functionality and cited the travel-booking website Expedia.

The goal is to make “transparency around booking a jet simpler,” explained Avinode managing director Oliver King, but not at the expense of Avinode members. “We are purely a business-to-business distribution system. Avinode is categorically not playing a direct business-to-consumer role itself. That has been the fear of everyone from the broker side since Avinode started. It never happened because it wasn’t our vision. Our vision is to build a distribution system. We are not a front end for [charter-buying] customers.”

The real-time booking functionality means improving transaction efficiency for Avinode members, who pay monthly subscription fees for access to the service. Avinode is adding to its application programming interface (API) services and expected to launch a booking reference service by the end of January. The idea for the booking reference is to create a system in which all parties involved with a transaction can view information related to that transaction. King said he expects the new booking reference service to be fully functional by the end of June this year.

The expanded API capabilities are focused on helping Avinode members find and reserve empty legs more efficiently and improve search functions within the Avinode system. The API will help facilitate one-way fixed-price charters, King explained, characterizing them as a growing and popular form of charter flying. “We would like to be able to support that,” he said. The API allows members to incorporate Avinode raw data into their own systems, including mobile applications.

Automating the Booking Process

For brokers, the new APIs and booking reference service should make it possible to arrange trips without the lengthy human-to-human negotiation typically required. “In this way, we sit in the middle of the distribution players,” said King. Profit margins are so slim in the charter business, especially for lighter jets, that it makes sense to allow charter customers to book charters online, whether from a broker or directly with the operator. “You are seeing that happen in the entry-level light jet segment both in Europe and the U.S.,” he said. “Profit margins that used to be made are not there; it’s much more cutthroat, and you don’t want expensive humans involved in booking it. Customers want to book private jets this way.”

That said, however, he acknowledged that “booking a private jet is not the same as booking a hotel room. [Securing] a jet is by definition a much more complex process, and an awful lot needs to fall into place to make it work with the click of a button. I think that goal is many years away.” But for popular routes with regular service, this new way of booking charters makes more sense. “I think we’re close to that taking place in a couple of years,” he said. “And Avinode is developing technology to enable these capabilities.”

Avinode handled more than 2.5 million requests last year, and membership continues to grow. Following Multi Service’s acquisition of a majority stake in Avinode late last year, the company is targeting growth in the U.S. “In Europe we’re well established,” King said, “and membership growth is far [lower]. The U.S. is the largest market in the world and we see plenty of opportunity for growth. Latin America has also been a fast-growing area for us.”