The private aviation industry is currently undergoing a massive image change. Although aircraft operators and brokers haven’t actively rebranded their services, COVID-19 and its effect on the travel industry have completely altered perceptions about private jet travel, making the practice of chartering aircraft more popular than ever before.
In this article, I’m going to examine how fintech is helping the private aviation industry rise to the challenges of increased demand and changing client preferences by improving payment technology and eliminating common pain points in the booking process.
The private jet booking process
Until recently, the private aviation industry has had little need to adopt the latest technologies or update best practices, often relying on trust when dealing with a mature clientbase used to more traditional methods of payment.
Traditionally, flights are booked by phone via a broker, who searches the markets for available aircraft and price offers using services such as Avinode or Leon Software, relaying the information back to the client.
The entire process typically takes 3-5 hours, and whilst the booking platforms mentioned above can partly cover payment needs, many companies still prefer to manage transactions themselves, with invoices generated in the traditional manner and payment arriving via bank transfer.
After COVID-19 brought worldwide travel to a standstill, the subsequent surge in popularity of flying by private jet threw up several fresh challenges:
- Interest from first-time clients was growing rapidly.
- Client demographics were beginning to shift.
- The booking and payment behaviour of new clients was very different.
- Crypto processing was in high demand.
- Companies were beginning to search for alternative solutions to traditional banks, aiming to optimise internal processes and gain more efficient functionality.
This rapidly changing landscape has been a catalyst for change within the industry, with operators and brokers increasingly seeking fintech solutions to solve the problems brought about by increased popularity.
The changing demographics of private aviation clients and their expectations
The private aviation industry has typically served a more mature client base, who often leave the process of booking flights to personal assistants. However, with cryptocurrency values soaring, a new generation of young millionaires has emerged, and many are keen to spend a portion of their profits on fast and discrete private air travel.
These new clients are more likely to tap on a smartphone screen than delegate the booking process to a PA. They also prefer to pay with more modern payment methods, including cards, digital wallets, and of course, cryptocurrencies.
In fact, with such a dramatic shift in user demographics, some operators are reporting that up to 19% of clients are now paying via crypto. However, despite the popularity of crypto payments, many businesses have been slow to adopt the technology, primarily due to a lack of technical know-how or fears of negative attention from regulators.
Today, fintech platforms offer operators and brokers the ability to receive cryptocurrency payments automatically converted to USD or EUR, GBP removing a layer of complexity and adding a simple, transparent new method for receiving payments.
A rise in first-time bookings from new clients
Now private aviation has officially gone mainstream, the number of new clients making their first booking has increased exponentially. Despite bringing unprecedented growth to the industry during troubled times, new clients actually pose a serious risk to brokers and jet operators.
Low transaction limits can make moving large sums of money difficult. If an acquirer’s limits are low, clients will often try to split payments into multiple smaller transactions. When issuing banks see this type of activity, it triggers fraud-monitoring systems that can prevent transactions from closing successfully.
Fintech solutions have allowed the industry to rise to this challenge, offering higher transaction limits and features such as pre-authorisation, plus unified dashboards to carefully monitor payment statuses.
Dealing with the common problem of last-minute bookings
Before the global COVID-19 pandemic, private flights were booked 6 months or more in advance. Today, that figure has dropped to a single month, with some clients requesting flights with only a couple of hours’ notice.
Typically, this hasn’t posed too much of a problem in a high-trust industry that serves mature, financially stable clients. Brokers are often willing to vouch for existing customers when bank transfers are delayed or made at extremely short notice. However, with the influx of new clients, brokers and operators increasingly needed to find faster methods of transferring funds to ensure payments cleared before aircraft left the runway.
Here again, the industry turned to fintech, using technology such as Open Banking and payment link e-invoices to process and keep track of bookings.
A closer look at the fintech solutions embraced by the private aviation industry
As I’ve previously highlighted, SEPA and SWIFT transfers with manual invoicing have served the industry well for decades. However, as businesses modernise to meet increased demand, fintech platforms have introduced a raft of new technologies to solve common pain points such as high fees and declined payments. In addition, fintech solutions allow businesses to follow payment statuses in the same way we track UPS or DHL parcels, with dedicated team member having access to the status of transactions.
Open Banking has reshaped the daily habits of operators and brokers by offering a superior payment flow, as well as enabling faster, more user friendly experiences for end-clients. With instant account-to-account payments, simple verification, and convenient access to hundreds of banks across the EEA and UK, the technology has been a significant force for change.
Multiple payment options
Advances in payment technology mean that private aviation companies can now easily and quickly accept payments from clients worldwide, integrating Visa, Mastercard and Amex into booking workflows, as well as region-specific payment methods and digital wallets such as Apple and Google Pay.
Generating and issuing invoices can slow workflows and cause severe delays — especially if operators and brokers are performing manual checks to ensure payments have been sent and funds have cleared. Pay-by-link solves these issues with one-time digital invoices that are generated in just a few clicks, allowing businesses to send payment details to clients via email or messenger, making it possible to pay for flights in just a few taps of a smartphone screen.
COVID-19 has been a significant catalyst for change within the private aviation industry, scaling the demand for flights and introducing a new generation of clients to the world of personal jet charters.
Rapid growth has necessitated the implementation of fintech solutions that offer faster and more flexible payment experiences, whilst also helping the industry to future-proof itself in a changing economic landscape — a move that’s looking ever more prudent as aviation companies are forced to pivot due to recent unprecedented geopolitical changes that could permanently alter the nature of how transactions are conducted.
About the Author
Simona Moosar is a business development manager at ECOMMPAY – a leading international payment service provider with its own fintech ecosystem. As an expert in payment solutions and technologies, online business growth, and localisation, Simona specializes in payment solution adapting, helping companies to scale globally whilst being local.