EBACE Convention News

Avinode, Charter X merge, roll out 2.0 online portal

 - April 28, 2010, 6:29 AM

Avinode and Charter X have completed the merger that they agreed to in March and are pressing ahead with plans to form what will be the executive charter market’s largest online portal. Avinode has bought out the Charter X shares for an undisclosed sum. The two companies’ technical teams have started work to integrate the rival systems.

Meanwhile, Avinode’s new 2.0 system is fully operational. The new software makes it easier for charter brokers and operators to put together the most cost-efficient routes by allowing them to search more effectively for real-time aircraft availability and pricing. It can show complex sets of charter flight options even for operators with multiple bases or a floating fleet.

Here in Geneva, Avinode (Booth No. 843) is launching an empty-leg live feed that will allow clients to show real-time aircraft availability on their own Web sites. The company also is expanding its system to include helicopters available for charter. With the addition of rotorcraft to the Avinode database, flight bookers will also be able to search availability between chosen helipads or any address where helicopters are permitted to land. The system will be able to match fixed-wing and helicopter availability to make quick connections between the two aircraft.

According to Avinode chief executive Niklas Berg, the merger with Charter X will mean that aircraft charter operators and brokers will have to use only one site to trade in a global marketplace, saving time by not having to update data to two separate sites. Avinode has become the leading online portal in Europe, while Charter X has been the market leader in the U.S. Now the two companies want to extend the reach of their combined charter data and booking request platform into key emerging markets for charter such as the Middle East and Asia.

The Avinode system currently processes up to 55,000 charter requests per month. It includes data for about 85 percent of Europe’s charter fleet, listing some 3,000 aircraft in total. According to Charter X, its database includes up to 15,000 aircraft from as many as 116 countries.

“We have been on parallel tracks for many years, trying to establish a global market,” Berg told AIN. “This is also about creating the next-generation marketplace and we have decided that we will reach further and faster together. This is only the beginning. We will continue to invest in the system.”

Trenton, New Jersey-based Charter X has become a wholly-owned subsidiary
of Avinode, which is headquartered in Gothenburg, Sweden, and also has a U.S. subsidiary in Miami, Florida. Charter X subsidiary Wyvern, which provides safety audits for aircraft operators, continues to trade as an independent entity. The Avinode site currently includes data from rival auditing group ARG/US.

Berg said customer reaction to the proposed merger has been very positive, despite the possible perception that the move will give the combined company a dominant market position and so reduce competition. “It is our strong belief that the customers will benefit the most from this,” he told AIN. “Customers have told us they are relieved that they will have to update aircraft information and hourly rates in only one place and that their staff can deal with just one system.”

Following the closing of the merger, the two companies are now able to exchange customer information. They intend to provide a new bundled subscription offer for the combined system. “The idea is to provide more value and you can’t charge more than the value you are bringing [to the market],” concluded Berg.

Avinode 2.0 Advantage
One key improvement in the new 2.0 version of Avinode is that it quickly identifies the best aircraft options for a flight from a variety of airports in one metropolitan area or region, such as London, to suitable airports in another location, such as Moscow. The more powerful search engine processes aircraft availability data in a more sophisticated way to reveal more diverse flight options. By optimizing operators’ availability and pricing information, Avinode 2.0 presents more dynamic trip options, offering the most cost- and time-efficient trip routing.

Avinode 2.0’s dynamic route construction feature is supposed to optimize fleet utilization not only by searching for the current position of each aircraft but also by integrating projected empty legs and future positioning flights into the search results. The improved system can also better accommodate aircraft that have more than one home base or simply float from airport to airport.

For operators with large fleets or for those whose home bases are not in close proximity, Avinode will build ferry legs incorporating whichever home bases are closest to the requested arrival and departure airports. For smaller operators, the system can set a group of neighboring airports as home bases so that when a client searches for any of those airports the price quote will not include ferry fees. There is also now a so-called “last leg” option that takes into account multiple home bases so an aircraft will always complete a given trip by returning to the home base closest to that of the arrival airport.

Avinode connects aircraft operators with potential charter buyers, including brokers and other operators needing more capacity. The portal has real-time aircraft availability and allows operators to post interior and exterior photos of aircraft, as well as important documents such as air operator certificates, audit reports and insurance documents that are required by many clients.

Operators pay a fixed monthly fee based on the size of their fleet, regardless of the number of bookings they generate from the system. This includes technical support and the work need to integrate Avinode with fleet management systems. Additional charges might apply for software development needed to integrate with a fleet management system that is not already covered by Avinode.

Not Designed for End Users
The system is not designed for end-users, that is, passengers who want to book their own flights, mainly because the data it presents is fairly sophisticated and needs to be interpreted by professionals who know how to structure a flight request in the most effective way. Avinode has no intention of eliminating the role of the specialist broker in the executive charter sector.

“It gives brokers the maximum possible choice of aircraft, suggesting options that they might not have considered,” said sales director Johan Sjoberg. “If we sold Avinode to anyone we could end up clashing with our own customers, and the quality of [flight] requests on the site is higher this way [that is, with access restricted to charter professionals].”

The Avinode software can be integrated with 15 different fleet management systems, with access protected by a password and user name. This means that operators can just update aircraft status data in the fleet management systems
and it will be automatically updated to Avinode about every 15 minutes. “The main advantage for operators is that it clearly shows where their aircraft are at any time,” Sjoberg told AIN. “Without it, operators would not have the time to communicate their availability.”

Dealing with Empty Legs
A key function of Avinode has always been to help turn empty-leg flights into revenue flights by showing flight bookers where empty-leg capacity can be tapped at any given time. So, for example, if a customer wanted to fly from Gothenburg, Sweden, to Geneva, the system might propose an aircraft due to fly empty from nearby Oslo to Lyon, France.

“This is about marketing empty legs in a much more efficient way because it can show them any airport near where the passenger is or is going to,” explained Sjoberg. “There doesn’t have to be a perfect match between aircraft and one specific airport, and depending on the length of an empty leg, the system can show different parameters [for the aircraft’s availability].”

Operators can download flight requests directly into their fleet management system. Once the operator’s system has confirmed the price it can be uploaded into the Avinode system for the prospective flight booker to retrieve. This makes transactions much quicker because previously an operator had to receive a request, retype all the information and then send it back to the broker in a process that might have to be repeated several times before a booking could be agreed upon. Avinode already posts charter prices in several different currencies and plans to extend this to a total of 20 in the coming months.