“"I've got a list of corporations that have gotten out of their airplanes [because of criticism from politicians]. It is the stupidest thing I've ever seen. When you look at the time and cost savings; it does not make sense not to fly [privately]. You can't let public perception interfere with your business decision to fly. It either is a good business decision or it isn't."”
Virgin Charter's Scott Duffy
To find out more about Branson's latest brand, we spoke with the man who founded it and oversees its day-to-day operations.
What were you doing before this project came along?
I spent most of my career in the technology business and about three years ago was introduced to private aviation.
As a passenger?
Initially, but then looking at it from a business standpoint, I was fascinated by the growth and even more by the highly fragmented nature of the business and how difficult it was to buy and sell business jet charter. I knew from experience that we'd solved these problems in other industries.
How did you meet Richard Branson?
Through a friend. Virgin had looked at getting into private charter for quite some time. In fact, at one point, they considered building their own fleet. But what people kept telling Richard is that the biggest problem in private aviation is not that there's not enough aircraft; it's that it's too hard to buy and sell charter on the existing fleet. We were being told the same thing and were building a technology solution to solve this problem.
As you did so, did you study operations like eBay and Priceline?
One of the biggest advantages we had was that sites like eBay and Travelocity and Priceline had come before us. What we did was ask our customers what they liked most about each of those services. They told us they loved the simple user interface of Travelocity. With regard to Priceline, they loved the idea of operators competing for their business. And with regard to eBay, they loved the notion of user feedback and ratings. So what we did was incorporate all of that.
Your plan was to have the top 500 charter operators under contract by last September. Have you achieved that?
We have over a thousand aircraft in the system. They range from turboprops to jumbo jets. With regard to the number of operators, we have just over 100 actively participating. We've restricted the number of operators based on safety and quality.
Did you find it harder to qualify operators than you thought it'd be?
We just want to make sure not only of safety but that all the operators reached the highest quality standards.
We've heard repeatedly that people like to research charter online, but when it comes to actually making such a big purchase, they want to talk to a human being. But you've suggested people will actually click and buy. What makes you think so?
All the evidence we've received from our customers is that the reason they picked up the phone was that there was no reliable source online where they could not only find aircraft for a trip but also go all the way through the process of purchasing and managing that trip. And people weren't comfortable making a transaction on the Internet without a brand like Virgin involved. We've had customers in our beta period running transactions online ranging from $5,000 to well over $100,000.
You talk about "revolutionizing charter" and tout what you call "an entirely new way to book charter" online. But outfits like taxijet.com also don't own or operate aircraft and promise to match charter buyers to the lowest prices on safe carriers. Some, like jets.com, even use an auction model. What sets you apart other than the Virgin name?
Well, we're part of the most respected aviation brand in the world and we've used our aviation expertise to pick the best of the best operators. Second, we have a technology all-star team. Finally, we have taken care of the issues that are most important to any traveler. We require that every operator be audited on a regular basis by independent, internationally recognized third parties. And we've partnered with J.D. Power and Associates to create the industry's first quality ratings program for charter operators. So for the first time, customers can have a reasonable expectation of what they'll get before they purchase a trip.
Richard Branson has said that if you're going to succeed, it has to be about more than making money. What else is Virgin Charter about?
When we were initially raising money and talking to venture capitalists, we cared about the environment and wanted to do good. And what most venture capitalists will tell you is, "Go make your own money and once you've done that, go do good with that money." But what Richard said is, "Come work with us at Virgin Charter and we'll do great things beginning on day one.