The "Uber" of private jets? Interview with Eymeric Segard, CEO of LunaJets.
Q&A session with LunaJets Media Team (LMT):
LunaJets Media Team (LMT): Eymeric, 2014 has been a record year for LunaJets, can you update us?
Eymeric Segard (ES)- Yes. LunaJets’ volume was up 40% (vs 5% for the private aviation sector) to reach a revenue of almost US$20m. December was the best month ever in our books with huge growth notably on our long-haul flight segment. But 2014 started slowly for us, before taking off and accelerating drastically in early summer. Our Q4 itself was up 90% compared to 2013. We also reached 10,000 registered members, 4,800 Facebook followers, and 2,500 on Twitter.
LMT- So what about the start of 2015?
ES- We have a very good start so far - we should end Q1 with an increase of 45-55% vs same QLY. Our spring and summer bookings are already very promising.
LMT- How do you explain this performance?
ES- LunaJets has a unique offer in this market: the combination of innovating technology, low prices and very high standards of client service from a single 24/7 office. As clients value and trust our neutral advice, they fly more with us, and recommend us to friends and business partners. This affects positively our negotiating edge (volume discount) to get the best rate from operators, which we pass on to our clients. Our low-cost structure, our technology and human shrewdness is the perfect balance between the over-priced 25-hour card program, the expensive “old fashion” multi-office charter brokers and the new App-and-tech only automated booking platform with very little or no service.
LMT- So this is what you offer with your new slogan “Pay less – Fly more”?
ES- "Pay less, Fly more" is more than an end-line. It’s a mission statement, we work very hard to deliver an excellent flight experience at the best price.
LMT- You also launched recently a new web site?
ES- Our partners in New York have redesigned our website, and our App (available in May). The whole experience, from requesting, booking and managing the flight, has never been so easy and fast. But the most important part is the “disruptive technology” behind it, which really explains our exponential growth in 2014.
LMT- "Disruptive technology"? Do you mean LunaJets is an "Uber" of private aviation?
ES- The answer is Yes and No… Yes, LunaJets is also a technology company with developers, proprietary and disruptive technology, which allow us to source and manage the best instant availability worldwide, to get exclusive empty legs and free capacity of private jets, and to help manage extremely complex requests. Our new App, available in May 2015, will be a game changer, even simpler, faster, and more user-friendly, to access all information regarding your pending flights, empty leg opportunities and last minute deals, or to take-off in less than 90 minutes…
LMT- So where it is “Not” applicable to private aviation?
ES- Well, business aviation is a luxury service in a very complex industry. It means that it will always require intensive human supervision and assistance:
- From the flight request: search and selection of aircraft, to the negotiation, booking process, administrative red tape (passenger manifests, visas, payments, …).
- But also during the flight: itinerary changes, time flexibility, airport slots, special and personalised catering, art pieces transportation, passenger delays, Air Traffic Control delays, adverse weather conditions - the list is just endless…
LMT- Does technology work at least to get the “best offers”?
ES- It is not enough. These “online only automated websites” proudly market themselves as price comparison platforms, but in fact means: they “forward” directly automatic quotations and un-negotiated prices from jet operators to clients without any advice regarding aircraft, flight information, airport restrictions…
LMT- How is LunaJets different?
ES- LunaJets’ approach is the opposite - our technology sources the capacity and best deals and our team select only the best 2 or 3 options according to the clients’ true needs. Our advisors always negotiate the best rates then manage live all clients’ specificities before, during and after the flight. Once again it is a unique offer.
LMT- So why are so many new competitors comparing themselves to "Uber"?
ES- I can't answer for them. New technology and newcomers are always a proof of the great velocity of our industry. But the dynamic of the private aviation sector has little to compare with the “Uber” market in term of size, complexity and cyclicality. In fact none of those competitors currently run a sustainable business model or even a realistic business plan. We doubt they may survive the next downturn market.
LMT- How big is LunaJets today compared to these new online-only automated platforms?
ES- We are a leading independent booking platform provider of charter flights and currently by far much bigger than any of our direct competitor, including these new App platforms. We benefit from a “snowball effect”: the bigger we get, the faster we grow. We recently managed to gain the trust of some of the biggest corporations in the world, very rational, long term and price sensitive clients. We do not see how an “App Only” platform could serve and manage these requests.
LMT- But aren’t both markets, private jets and cars, comparable?
ES- Not really! “Uber” is an amazing business model, which operates in a huge and quite simple market. Let me highlight 5 big differences between these two transportation services:
- Uber is a "go-now" only service, whilst private jets have a median of 6 days advance booking. Last minute, within 12h, make less than 10% of the overall flights.
- Uber has a +/-$12 average ride cost, whilst last year our average private jet flight was +/- $12,900 – or 1,000 times more!
- Uber’s market is not highly “Trust" sensitive, whilst private aviation is exactly the opposite.
- Uber’s market is “soft regulated”, whilst private aviation is over-regulated (flight authorisations; airport and air traffic control and slots; crew qualification, training, and rest; weather effects; airport opening hours; even passenger and luggage weight…!)
- Uber’s clients are not specially "service" sensitive, but when you pay between $2,000 and $30,000 or more, you expect more than just a smart mobile App to anticipate and manage your needs.
LMT- Ok but in the near future do you think there is a chance an Uber-like model may work for the Private Aviation market?
ES- If ever, it will be a very slow process as long as the private aviation sector operates in this legal and regulated environment. LunaJets is a multi–platform (apps, website, email, telephone, social network). We develop all the tools to give our client the choices. In 2008, no one believed that an internet website could attract clients in such a luxury, expensive, competitive and niche market… Yet here we are.
LMT- So what are business aviation clients expecting?
ES- Business aviation is firstly an efficient “investment”. They just need a simple and flexible platform, trust, no minimum notice, no long term commitment - an easy way to request and book a flight. But at the end they are no different than any other customer, they want flawless service and to pay the fair price.
LMT- How much has the recent Swiss franc exchange rate move affected your business?
ES- We see NO negative impact on our business. For swiss-based customers the impact is even positive, they can fly 15-20% more than before! We even noticed a stronger demand from our Swiss clients, who booked in advance their summer flights and take advantage of this exceptional opportunity. Last year 97% of our bookings were denominated in Euro, GBP or USD so for our non-CHF-denominated clients, they will incur no material impact whatsoever. Despite this strong currency history, Switzerland is by far the biggest private aviation hub in the world in regards to its GDP and per capita.
LMT- LunaJets just opened a London Mayfair office. Do you have plans for any other office opening soon in the world?
ES- All our 24/7 worldwide flight operations are managed from our Geneva HQ trading floor. Our London Mayfair and Budapest offices are only commercial units. We will re-open in May our seasonal Ibiza, Olbia and St Tropez offices. Our US client base is growing and enjoyed using frequently our "empty leg" transatlantic flights but we do not plan to open any office there - we are looking East more than West.
LMT –So far LunaJets has grown only organically. Do you plan possible future acquisition?
ES- It is true to say that LunaJets is very well capitalised and we may use this surplus to acquire a small competitor. We are always open for discussion, but as a fast growing company with a very young, energetic, strong business culture, we strive to hire the most motivated and service oriented people… We speak 9 languages at LunaJets, including Japanese! We want more.
LMT- In a recent interview on Bloomberg TV, you mentioned the impact of commercial aviation strikes on your activity?
ES- On both recent occasions, the September Air France strike and December’s Lufthansa strike, we experienced a dramatic growth in request by +200% and confirmed flight bookings by +45%. The impact is important but very short-lived. The profile of these stranded clients is very different from our usual customers. Most of them are in distress and we try to find quickly the most affordable solutions. We find private jets capacity anywhere in the world, and our last minute medical or evacuation segment is growing even faster. In urgent situations, we can take off in 60-90 minutes if all goes well.
LMT- What’s is ahead for LunaJets in 2015?
Our sector is very much macro-economic sensitive, and we maintain a prudently optimistic approach by raising again our cap-ex and hiring new employees to reach a 25-30 team by the end of the year. For the medium term we target 40-50% organic growth per year over the next 5 years which means more than $100M revenue, all financed by our cash flow and our solid balance sheet.
LMT- Thank you Eymeric.