Despite its well-known brand name, Virgin Charter has not been immune to the economic downturn. The charter marketplace saw a drop in business last month, and particularly within the last two weeks, according to founder and CEO Scott Duffy. The reported decrease is in line with the drop in revenue reported by a majority of charter operators and brokers. Most indicate that business has dwindled by 10 to 40 percent.
Many Virgin customers have begun “trading down,” Duffy said. “Customers who would have purchased a heavy jet are now purchasing a super-midsize jet,” he said. “Those who would have purchased a super-mid are now going for a light jet.” Transaction activity has also slowed, but Duffy did not provide exact figures.
Duffy is hopeful, however, that the economic downturn might actually help business in the long run. Since the business model relies on operators competing to provide the best offers, Duffy believes more people will be drawn to the Virgin Charter Web site. “People still want to fly private,” he said. “They’re just looking for a more affordable way to fly.”
The impact of the economy will also be temporary and the industry will come out of the recession “rosier than ever,” he said. “We’re seeing a recessionary environment right now. These things are cyclical. I think it’s going to be a tough period, but we’re all going to come out of this stronger.” He also said problems within the commercial sector will make the case for increased private aviation use.
Duffy is also uplifted by the progress the company has made since last year’s launch. In addition to debuting real-time pricing and click-buy-fly options, Virgin also announced partnerships with Travelocity Business and Virtuoso. To date the company works with 120 operators, has more than 1,000 aircraft in the system–from VLJs to BBJs–and sold trips ranging from $5,000 to $2 million.
Approximately 95 percent of the transactions are booked and completed online, Duffy said. Sales last month averaged $30,000 per trip, and customers routinely charge $75,000 to $100,000 on their credit cards. “Virgin Charter was created to make it easier for leisure and business travelers to find and book charter flights, and we have done just this,” he said. “The achievements we have made since we debuted our marketplace a year ago are a perfect indication of the exciting things to expect from Virgin Charter in the year ahead.”