Nipping into the niche

— 29.05.18 BY Jill Stockbridge
 
 

However, nature abhors a vacuum, and business aviation rolls on. Several of these aircraft have now been snapped up by a new company, built on a very similar business model, and also based in Singapore. The new OJets has certainly started with a bang – having announced their formation and the planned launch of services on 5th April, the company then announced the acquisition of European aircraft management company Elit’Avia, allowing them instant access to AOCs in Malta, San Marino and Slovenia.

An initially surprising move, closer inspection reveals that the CEO of the new company is none other than business aviation veteran Nick Houseman, formerly of Bombadier and Zenith, and co-owner of Elit’Avia.

The canny move provided a fast way to launch the charter company into the market and there are plans to expand just as rapidly.

Houseman explained how the company was created: “The Ojets team began as three people who saw an opportunity in the aircraft that became available and the niche in the marketplace. They had the financing, but they needed someone who could operate the fleet. That is how we came together, putting Elit’Avia and OJets together.

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“I was the co-owner of Elit’Avia, with Michel Coulomb who founded the company in 2008. We sold it to the OJets group and they gave me a day job, moving up to the group level as CEO. So we still have the business unit Elit’Avia, which does aircraft management and charter. They have 21 aircraft that are being managed and some are available for charter.

“And then we have OJets, which are fully-owned aircraft, available for block charter and ad hoc charter, with no owner approvals required. OJets has three owned aircraft right now, two Global 6000s and a Challenger 650, which are all Maltese registered and operating under the Elit’Avia AOC. The fleet will float. They have no home base, and they will travel the globe.”

The new company has plans to expand rapidly, utilising the stock still available on the market to triple the number of aircraft by June. The business model is one that Houseman believes is ideally suited to the developing regional market.

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He said: “I think the business model has been proven out. Obviously, Vista Jet has been out there promoting this model for a long time, and they have been very successful. There seems to be a lot of demand in the region for a service like this.”

The region is still learning about the use of business aviation and the economic advantages of private jets, which makes the simplicity of the model ideal for new users.

Houseman explained: “Our solution is the entry level. You just give us money and you get time on the aircraft. It is very transparent on pricing. You don’t have the complexity of operating, or hiring the pilots. You are not putting an asset on the balance sheet; you are not taking any depreciation risk. There is no fractional ownership. It is literally just buying time. It is a very simple solution for the customer. They outsource everything to us and the only thing that they have to do is pay.”

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Houseman sees great potential in the region, particularly in mainland China, where many businesses are looking to expand globally. He believes that will be the main source of clients. He said: “We are looking for the people who are doing a lot of international business – going to Europe, the US and Africa. I think everyone is aware that China is expanding globally, looking outwards and doing business all over the world. The United States has around 3,000-4,000 airports. China has a very small number. If you want to go point-to-point anywhere it can be a challenge. We can service those routes, such as when someone wants to go from Beijing to Africa. On commercial airlines you might have two or three stops and it is going to eat up a couple of days. That is where our solution fits in.”

So, the ethos behind the brand is clear and the niche into which he feels the company fits, but what of the brand itself. Houseman smiles. “We went through a branding exercise and had lots of different names, but we were pretty sure of the name Otto Jet. We wanted to have something that was really simple to remember. At the same time we were looking at different symbols and logos. We came up with the O, which represents the ensō symbol [a Japanese word meaning circle and strongly associated with Zen], which is part of Asian culture, and it sort of fits with what we are trying to do, as it represents strength and elegance. And when we put the symbol together, with the red and the black as you see on the tails of the aircraft, its pretty cool.

“So, we went with it, and someone said, what about just OJets? The symbol fitted, the name was simple and it just all seemed to work.”

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Service is OJets USP

The brand aims to differentiate itself from competitors by providing outstanding service coupled with the best connectivity, two things that Houseman believes make all the difference to charter clients. He said: “Our biggest selling point is the service level. If you look at somebody doing one trip, what they really feel is the service. They are not thinking about the aircraft. They are thinking about what is going to happen in the aircraft.

“We’re offering a more Asian-focused service, with Asian catering and Asian crew we have recruited here in the region. We will provide Chinese-speaking crew for Chinese-speaking clients. Since spending more time in the region, I have found that this is a big issue. English is not as widely spoken as you might think.”

The team is also prioritising connectivity, with the fleet equipped with Honeywell’s JetWave hardware powering Jet ConneX, Inmarsat’s Ka-band network for business jets, and providing a global footprint and strong, reliable service 24/7 worldwide.

Houseman added: “If you are going to sit on an aircraft for 10 hours, you want to be connected. So it is the service level and the connectivity that are big issues. If you are a charter user, you feel the service level and the people serving you – that’s your interaction. You are not really interacting with the flight crew or the aircraft, beyond the connectivity. That is why we are focussed on those particular areas.”

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The standards will be maintained through inhouse training. “We have training programmes for the cabin crew on service levels, catering, medical,” said Houseman. “To a certain extent, as part of the crew, you have to adapt to who the client is. If the client is Russian they have certain expectations, if the client is Chinese they have certain expectations, and they are very different. So we need to adapt.

“Over time we are going to have regular customers. It is about getting to know those customers, so that when they come back they do not have to tell us what they want. We should know.”

That also brings home the advantages of having a single manufacturer fleet, as repeat customers do not have to learn how to operate the IFE or where to find the bottled water. They should feel at home straight away. There are also economies of scale in having the single aircraft make. The company can, to a certain extent, standardise pilot training, maintenance support and servicing, which helps to control costs.

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Houseman said: “For OJets it is a fully Bombardier fleet, because those are the aircraft available. That is not to say that we are always going to be Bombardier. There are a lot of good products out there. As we develop we will consider our needs. We have the long-range aircraft, but do we need feeder aircraft? That is a discussion we are going to have as we prove out the long-range business model.”

The team aims to have the aircraft operating around 100 hours per month, which Houseman feels is an achievable target.

He said: “In the owned aircraft fleet it is really about getting volume on to the aircraft and generating enough hours that you can cover all the costs, including the ownership costs of the aircraft. In aircraft management, typically the owner doesn’t factor in the cost of ownership. He just wants to do a bit of charter to cover the cost of the crew, or to recover some of the management costs. But the aircraft ownership is never really factored in.

“Our target is to do 100 hours per month, per aircraft. The interesting thing about our model is that everyone has the perception that the aircraft will be flying every single day. But if you are doing Beijing to the West Coast of the US and back, you can build up 22-23 hours in two or three days. It is really about the long range flying. That is what we aiming for. The short trips can be serviced by managed aircraft.

“And that is really why we are focussing on China. If you look at the geography of Asia, it is big. I flew here to Shanghai from Singapore, and it was five hours. And Singapore is a near neighbour. There are no short flights, which will help with our business model, because if we are doing a lot of international flying out of China it is going to be six, seven, ten hours plus.”

He concluded: “Collectively, our clients will benefit from access to more aircraft and more pilots, and an extended global reach, with fixed operations and offices in Asia, Europe and North America. Our vision is to draw from our numerous strengths to offer an unprecedented level of service to discerning clients worldwide.”

 

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