BizAv digital transformation
Blog, Aviation Industry, Private Jets

BizAv Seeks Efficiency Through Digital Transformation

Posted on by Ivanna Nikolskaya

Imagine an experienced tightrope walker moving gracefully along a thin rope stretched between mountain peaks. This is the current state of the business aviation market. On the one hand, economic headwinds threaten to disrupt the smooth path, but on the other hand, strong tailwinds of pent-up demand and the drive for efficiency are propelling the industry forward.

For decades, business aviation has been a bespoke flight tailor, meticulously designing customized travel for a discerning clientele. However, beneath the cloak of luxury lies an outdated system in need of modernization. Many small operators are struggling to compete, clinging to these antiquated workflows in desperate need of innovation. Consolidation, a potential solution, is proving elusive due to the fragmentation of the market. Meanwhile, advances in IT technology offer opportunities to streamline operations and consequently reduce costs. But again, the solution is not so easy to embrace.

The Paradox of Progress: Acknowledging the Need, Resisting the Change

While business aviation is challenged with a well-outdated system, something that most professionals recognized a couple of years ago as we recovered from Covid, for some reason no one is in a hurry to take action or make major steps away from the traditional request-and-quote system, often associated with Avinode, which remains prevalent. Operators acknowledge its limitations and desire a more efficient approach. Yet, a sense of “fear of the unknown” exists, leading to resistance towards new solutions.

This inertia stems from a fundamental principle in human psychology: the status quo bias. Even when presented with potential improvements, the mental effort required to transition to something new, even if objectively better, can be perceived as a cost, and perceived risk associated with change can outweigh the anticipated benefits, keeping us anchored in our comfort zone, further tipping the scales in favor of maintaining the status quo. The business aviation industry, long known for its conservative approach, exemplifies this status quo bias, often prioritizing familiarity over potential advancements. Operators are well-acquainted with the outdated systems they use, and this comfort level can act as a barrier to adopting more advanced solutions. Transitioning to a new platform can be a complex process for both operators and technology providers. While operators yearn for the benefits of tomorrow’s technology today, successful implementation requires their active participation in the adaptation process.

Furthermore, operators remain focused on market share, neglecting the potential of improving contribution margins through increased operational efficiency. While the industry is seeing increasing adoption of software, most solutions address specific pain points without disrupting the fundamental change in the market. In addition, they often lack the necessary integration capabilities, creating a fragmented software landscape. Operators are forced to contract with multiple technology companies to solve different problems. 

Another major hurdle is the lack of full digitalization among operators. The way forward is not to completely abandon established practices. Many operators are used to a familiar request and offer system, and understandably so. The key to success lies in finding solutions that bridge the gap between the current state and the possibilities of a fully digital future.

Breaking the Monopoly Mindset

The industry is on a quest for a “holy grail” solution: a platform that completely replaces the monopoly solution, boasts immediate and widespread adoption, offers an extensive feature set, is user-friendly, and comes at a minimal cost – a tall order in a fragmented market.

Another layer of complexity is the perceived cost of new solutions. While some operators haven’t embraced automation at all, relying on manual processes, a significant portion utilizes in-house developed solutions or older systems that are still functional. These operators may have invested heavily in their existing systems, creating a reluctance to switch. It’s crucial to address this concern by framing the investment in new technology as a necessary step towards future growth. Legacy systems, while functional, may eventually become obsolete and hinder efficiency. Viewing past investments as sunk costs allows operators to embrace the potential return on investment offered by modern solutions.

The ideal solution, according to many, would be a comprehensive platform that completely replaces existing systems. Matching solutions, such as VOO, are already on the market and are fully operational, yet suffer from the same notorious hesitancy of operators to step up. This particular solution that prioritizes efficiency, automation and connectivity is now well positioned to play an important role in the ongoing digital transformation of the industry.

There is also a growing industry focus on providing comprehensive training and support for operators adopting new technologies. This ensures a smooth learning curve and allows operators to take full advantage of the system’s capabilities.

Data as Fuel for More Efficient Aviation Operations

Despite the limited number of B2B competitors, there are a significant number of B2C platforms available. The key to success lies in ensuring seamless connectivity between the entire business aviation ecosystem – brokers, operators and end customers (B2B2C connectivity).

The winners will be those operators who embrace digital transformation to use data as fuel for efficient operations. Becoming reliable and efficient comes down to how well they can utilize software capabilities to extract more value from data and make more informed decisions faster than the competition. 

The Perils of Short-Term Thinking: Beyond Flashy Marketing

As much as the market is rippling with indecision, say, if the new owner of Avinode invests in an overhaul of their brand, it will be by all odds universally applauded. While the recent well-known acquisition by CAMP Systems might indeed lead to a marketing metamorphosis, a flashy ad campaign alone won’t solve the industry’s problems. What’s needed is genuine innovation – a platform that addresses the core challenges and offers tangible benefits to all stakeholders, not just a marketing facelift.

Although the industry already openly recognizes the need for change, the reluctance to abandon established practices creates a tension between innovation and inertia. No one likes the limitations of the traditional system of request and offer anymore, and therein lies a lesson for those operators who think bigger and want to grow rather than move with inertia – something between Icarus, the Tortoise and the Hare.

The business aviation market can be perfectly compared to mirroring the ascendancy of a well-funded startup. Like the venture capital backed company, it has experienced explosive growth fueled by innovation and a focus on valued customers. However, as with any startup, the market must now go through a period of maturity. Investors are scrutinizing costs, and efficiency is paramount.

A Multifaceted Transformation

The good news? There are ways to make the transition smoother. Operators who currently use one or another legacy system don’t need to worry about starting from scratch. Ideally, new solutions should be compatible with existing platforms, allowing operators to leverage their investment and access new features. Imagine a system that seamlessly integrates with existing workflows, offering real-time data and streamlined communication. This can lead to significant efficiency gains, allowing operators to focus on what they do best: delivering exceptional service to their customers.

The vision extends beyond brokers and operators. Ideally, the system will integrate with brokers’ (or technologically equipped brokers’) CRM systems to give end customers direct access to booking information, further streamlining the process.

Stuck in a request-and-quote holding pattern, business aviation grapples with outdated systems. However, with revolutionary new technology solutions already available for operators to utilize, gradually the light at the end of the tunnel is becoming visible and the hope that digital transformation will fully take over the industry and propel it forward is growing stronger.

Adopted and published text – Business Air News, page 14 – 15.