Skynet Puts FBO Pricing Out in the Open

 - May 1, 2011, 4:40 AM

Before the financial crisis in the days of the money-no-object approach to business aviation, the attitude of some FBOs when asked what handling services would cost was a rather snooty, “If you need to ask the price, it’s probably not for you, sir.” Preposterously inflated prices and widespread inconsistency and lack of transparency were all too common in the industry.

But increasingly operators are watching the pennies and want to know exactly what they are paying and what they are getting for their money. The trouble is that it is still hard to compare prices without contacting FBOs individually.

That’s where a new system from start-up company Skynet comes in. The software is intended to allow operators to view real-time pricing for handling at different locations, as well as rates for associated services, such as ground transportation and catering. They can also use the system to book handling directly with FBOs and handling agents, and this is their main motive for signing up.

Skynet managing director Tim Gill explained that the software allows all parties involved in managing a trip to have access to the information they need, to make bookings and to store account information. This covers the aircraft operators themselves, FBO staff, flight planners and third-party service vendors. He claimed it is the only FBO management tool that allows FBOs to upload all real-time prices, and it allows operators to complete a full trip profile, including costs.

“Since the recession profit is king [for aircraft operators] and estimating prices doesn’t work anymore,” Gill told AIN. “In markets where there is no competition [for handling], there is some tendency not to quote prices, but operators are now demanding transparency as there is no longer so much fat on a trip.” By implication, FBOs that refuse to post prices will allow operators to draw their own conclusions as to why they will not publish their rates.

Operators and flight planners who are licensed users of Skynet will be able to create accounts in which they nominate their preferred suppliers at any given location, with specified contracted rates linked to a particular FBO. This should be more efficient for larger companies responsible for significant volumes of traffic through particular locations in that they will not have to specify a particular rate with a particular service provider each and every time one of their aircraft is in town.

Skynet will also display the status of orders for requested services with color coding and confirmation of the agreed rate for each of these. The system can automatically reissue supply orders for these services in the event that a flight’s arrival times changes, following an update from the FBO or operator.

The UK company has not yet finalized its complete pricing policy for licenses, with rates depending on the scale of the organization. For example, an FBO chain with 10 sites will pay a fee for each site but an unlimited number of users will be able to log on at each site. FBOs will have the option of paying a larger license fee to build their own online store to market specific services and goods. Eventually third-party service providers, such as local concierges or limousine providers, will pay a small fee for posting their rates.

In the first year, following a free trial period, Gill indicated that a single-site FBO “of a reasonable size” would pay approximately £5,000 ($8,000). This rate covers training and support, and in the second and subsequent years it would fall to about 25 percent of this (that is, £1,250 per annum). Skynet is also considering a pay-per-use charging option. Skynet is putting together a team of specialists to help initial users set up the system and input pricing data.

Beta testing of Skynet has been under way for nearly three years, with more than 400 users signed up for the free trials. In May, the company expects to announce a major international handling group as a launch customer. Gill said his initial target is to have at least one FBO from each of the 100 most-visited business aviation airports in the Skynet system. –C.A.