Sale of Empty Legs ?

[tornado]

Maximal loading of the aircraft is clearly the best way to maximise the RPK, but does selling empty legs and space on repositioning flights may cause problems with scheduling of primary operations ? Does your company offer these ? Is it just to existing clients ?

tornado

[Alexander]

Not only do many companies do it, there is even an after-market. Here is a company that deals specifically in sale of these flights. (http://www.flightmaker.com)

Some websites list available empty-leg flights and prices or discounted costs for jets that are in the area in which you are interested.

Alex



Maximal loading of the aircraft is clearly the best way to maximise the RPK, but does selling empty legs and space on repositioning flights may cause problems with scheduling of primary operations ? Does your company offer these ? Is it just to existing clients ?

tornado

[tomekp]

Hi,

I think Avinode system from Sweden gives you possibility to sell empty legs very effectively. My dispatch and software company cooperate with them for some time now and I think they product is really good.

BRGDS!

Tomek

[tornado]

I have just taken a look at their Avinode Link product description and it seems very interesting. First thing I noticed though is that it is a monthly subscription licence. Although I don't know the details of the licence this means the control you exercise over use of the product is likely to be quite limited.

Assuming that you installed such a ecommerce product on your own server, and feed it yourself, I would expect the administration and management to be carried out inhouse, so the input from the software supplier to be quite small.

Personally I would prefer to buy an in-perpetuity licence with a support contract and maintain control over availability and more importantly my database.

You have inspired me to take at look at other similar aviation ecommerce products. After all one of the key advantages demonstrated by low cost airlines is the use of direct booking with airline and no use of intermediaries...

tornado

Hi,

I think Avinode system from Sweden gives you possibility to sell empty legs very effectively. My dispatch and software company cooperate with them for some time now and I think they product is really good.

BRGDS!

Tomek

[tomekp]

Hi,

Avinode is mostly to link brokers with the operators. It is web-based and everything is on Avinode server. If you are a broker you need to invest couple of hundreds Euros monthly, but the advantage is that you see over 2000 aircraft availability form several hundreds of operators incl empty legs. If you are the operator, charge is really small comparing to your other day-to-day costs and your aircraft becoming visible for everybody (brokers). You just need to feed the system with your schedule, however our software which is used for operator's internal management transfers data to Avinode via xml bridge so you do not have to update two databases.

BRGDS, Tomek

[tornado]

It sounds like an excellent idea and should lead to greater market efficiency for the customer, and hence better value. That depends of course (like most commodity trading) on being able to fully define what is being offered...

tornado

Hi,

Avinode is mostly to link brokers with the operators. It is web-based and everything is on Avinode server. If you are a broker you need to invest couple of hundreds Euros monthly, but the advantage is that you see over 2000 aircraft availability form several hundreds of operators incl empty legs. If you are the operator, charge is really small comparing to your other day-to-day costs and your aircraft becoming visible for everybody (brokers). You just need to feed the system with your schedule, however our software which is used for operator's internal management transfers data to Avinode via xml bridge so you do not have to update two databases.

BRGDS, Tomek

[tomekp]

Hi,

It is a shame that Max Liebermann from Avinode cannot join the discussion. He explained to me how the empty leg sales exactly works. It is taking into consideration airports in some range of departure and destination apt, so if you have epty leg Farnborough - Warsaw, system will offer Biggin-Hill - Poznan as well adding repositioning costs (if you use qoutation module).

BRGDS,

Tomek

[tornado]

If you are including repositioning , does it take into account crew rostering issues, as you are now utilising legs that were not originally planned ?

tornado

[tomekp]

No, it does not include any internal operator's issues, however I think you can put some limitations of max total time.

BRGDS,
Tomek

[BusinessAviationMalta]

I have read this thread with interest. I have used Avinode in the past and although it is a very good system, it is pricey and one is restricted to operators that are paying Avinode, so it is not a true reflection of what is out there. That said, this is also a control mechanisim, as if one is paying for something rarely te post incorrect information.

There is another system, that lists operators for free and brokers can also get a free login. The system is CharterX. www.charterx.com (http://www.charterx.com). This system allows one to search for aircraft worldwide by airport, aircraft category, empty legs and transient aircraft. Naturally the free logins do limit the use, however as a basic tool I believe it is better than Avinode. Further more it allows brokers to list empt legs for free, although restricted to only 3 active empty legs at any one instance. The system is very popular in the US, one could say it is an industry standard, however, it is gain ground in Europe and the restof the world. As a databaseis it still larger than Avinode and offers a lot more for free. Being US based and paid memberships are also cheaper as I believe one can get paid membership for about 200 US$ per annum. Anyone interested in either a free membership or paid one, drop me a line, as I'm a consultant for Europe for this organisation.

I also list for free empty legs on my blog as below. Again drop me an e-mail and we list it for you. We updated our empty legs on a daily basis.

To go back to the original question, I believe that one has to be very careful in marketing empty legs, whether an operator or a broker. The original customer will always take precedence, and one has to have some kind on in built check to ensure that both the orginal customer and the subsequent are protected. A lot of operators now days do not go back to base but remain transient in the location, example an operator in Milan, might have a Milan - Nice flight, they will not fly back immediately to Milan but might remain a couple of days in Nice and try topick up a flight from the new location while in transient. In this manner the customer is better protected and they are able to go into markets which by staying at base and always offering aircraft out of base will not always be accessible.

[tornado]

A couple of interesting points you have raised there:

What form does this protection take ? I assume that the empty-leg contract stipulates that such flights are subject to rescheduled or even cancellation depending on the original customer. This would be unacceptable to a group of executives travelling for a meeting. To be honest given the risks described, I am interested to know who actually uses corporate aviation empty legs when there may be unreliable ?

What are the implications of transient operations ? Does the crew accommodation costs, the reduced utilisation of the aircraft by being out-of-base make this profitable ?

tornado

The original customer will always take precedence, and one has to have some kind on in built check to ensure that both the orginal customer and the subsequent are protected. A lot of operators now days do not go back to base but remain transient in the location, example an operator in Milan, might have a Milan - Nice flight, they will not fly back immediately to Milan but might remain a couple of days in Nice and try topick up a flight from the new location while in transient. In this manner the customer is better protected and they are able to go into markets which by staying at base and always offering aircraft out of base will not always be accessible.

[BusinessAviationMalta]

In all fairness, most charter contracts whether it is an "original" or an empty leg are subject to rescheduling for a variety of reasons, aircraft technical, weather, slots, etc. Furthermore most operators and brokers limit their liability to at worst providing a refund for non performance. Naturally if one had to resort to te above on a regular basis, the client would seek greener pastures.

That said, although a client is allowed a certain amount of flexibility with regards to departure time, there are operational restrictions, such as crew duty times, and airport operational hours and most operators nowadays include, a clause which limits the flexibility example a departure of within 2 hours of orginal scheduled time which will vary subject to a variety of constraints mentioned earlier such as airport opening hours and duty times, but also the on the actual lenght of the flight, it makes a difference on whether the flight is a short one or a long one.

By giving the clients a lot of information, one can offer the desired flexibility, yet allow the operation manouvering space. Usually an empty leg is significantly cheaper, and hence the operation department can offer less flexibility with regards to departure time for a good price. It is not unusual that an empty leg is only confirmed only in the last 72 to 24 hours by the operator, precisely to protect both the original customer, and the operator themselves.

With regards to transient aircraft, I feel it is best to explain with an example, let say we have a customer who needs to fly from Olbia to Malta on day 1 and return 7 days later from Malta to Olbia. Assuming we have a midsize jet for this flight and the aircraft commissioned for this flight had a home base in Milan. The flight times involved are Milan - Olbia, approx 1 hour, Olbia - Malta approximately 1 hour, Malta - Milan approximately 2 hours. The total flight time for this flight would be; Milan - Olbia - Malta - Olbia - Milan, 6 hours over a period of 7 days, usually operators require a minimum daily utilisation of 2 to 2.5 hours, and for this charter the total amount of hours is significantly less. So an operator would charge for two one ways, that is, Milan - Olbia - Malta - Milan, Milan - Malta - Olbia - Milan. A total of 8 hours against a minimum of 14 if the aircaft had to SBY for the customer. What this does is it allows the operator to leave the aircraft in Malta anyway, as they have some extra profit to cover crew and parking costs in Malta, but since they sold two one ways they are not obliged to the original customer to wait for that customer, so they can offer availability out of Malta.

This is not an exact science and it takes experience, clever scheduling and marketing, but it is certainly possible to keep cusomer happy and increase utilisation and revenue by adopting such methods.

[Alexander]

Does anyone have the breakdown of the cost of a new aircraft ? I am trying to establish the approximate cost of each of the subsystems on board (mainly the avionics fit and options) ?

Thanks
Alex