Charting the way to lower prices
When Harold Okwa decided to try and solve the problem of excessively expensive charter rates for business aircraft in his native Nigeria, he realised that a new approach would be required. Alan Dron reports.
When Nigerian Harold Okwa was studying for his MBA qualification, he had to travel to London each month as part of his degree course. He normally travelled by airline premium economy or economy class and he admits that he dreaded the thought of the next intercontinental flight.
That started him thinking about other ways of flying. Business aircraft are one option for the busy and well-heeled. However, these are never cheap and Nigerian rates for executive aircraft are substantially higher than those in other countries.
The middle and affluent classes in Nigeria are still relatively small and “primarily it is politicians driving the market”, said Okwa, managing director of aircraft brokerage V-2 Aviation Solutions, which uses the trademark Jetseta.
“A lot of charters in 2014-15 were politicians or political parties. The other side of the market was the oil and gas industry, especially for helicopters – there’s a huge demand for that. However, towards the end of 2015, that demand had cooled significantly and some operators had 12 or more helicopters lying idle. I thought there was a lot of scope there.”
After kicking around a series of ideas, his company came up with an app that aims to solve the problem. Or. rather, two apps.
One is used by business aviation operators to post details on the Jetseta platform of their aircraft and their availability. The second is available to the public and allows them to type in their requirements for a flight on an executive aircraft, such as point of origin and destination, date and number of passengers.
The app allows potential passengers to specify a ‘full charter’, where the aircraft is booked for outbound and return journeys; ‘empty legs’, which takes advantage of one-way flights that the aircraft have to make anyway; or single seats/group shares if several people independently want to travel to the same destination on the same day and can effectively join together to share the costs of an aircraft.
Other options are for passengers simply to input details of when and where they would like to travel and the operators will reply with details of what aircraft they have available around that time.
At the moment, price is a deterrent to the development of the Nigerian business aviation market, said Okwa. “In Nigeria, prices are 200-300% more than in Europe. Taking a [Bombardier] Challenger from Lagos to Abuja, for example, at best you’ll get $6,000 for an hour-long journey, whereas in European countries you can get it significantly cheaper.
“I thought that if we could get these operators on this platform you would get competition between them and drive down the price.”
By the time the public app was at the ‘soft launch’ stage in late August, Jetseta had 15 aircraft on the platform “and we believe more will come on”, said Okwa. The portfolio ranges from Dornier 328s to examples of the Bombardier Global Express.
“Primarily I’d say we’re still a brokerage company, although we’re not operating in the traditional manner,” said Okwa.
“Within Jetseta we like to see ourselves as an information company: we’re selling information for business aviation.
“There are a lot of private jets down in Lagos and Abuja doing nothing; the economy at the end of 2014 and the start of 2015 was affected by the price of oil dropping sharp and I thought ‘Those guys probably need to do something with their jets’. I thought I would try to expand the market and started coming up with different ideas to do so.
“I spoke to some of the operators to see what they thought of the idea and they said ‘Yes, this could work.’”