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Overcoming sales hurdles through digital transformation
Stuck in a request-and-quote holding pattern, business aviation grapples with outdated systems. VOO's Ivanna Nikolskaya shares her thoughts on the importance of adopting tech that already exists to make things easier.

It is great, says Ivanna Nikolskaya, to see the industry slowly recognising its legacy system is in need of updating and digitalisation, but it’s all moving extremely slowly. Many small operators struggle to sell flights efficiently, possibly because they lack sufficient resources to have a large sales team or the reach to a broad customer base. She also sees the need for consolidation in the industry, either through brokers, IT platforms, or even collaborations between operators. But how to achieve true consolidation when operators want to keep control of their own sales and maximise profits?

Imagine a tightrope walker moving along a thin rope. This, she says, is the current state of the business aviation market; on the one hand, economic headwinds threaten to disrupt a smooth path but on the other hand, strong tailwinds of pent up demand and the drive for efficiency are propelling the industry forward.

Business aviation is a bespoke flight tailor but beneath the cloak of luxury lies an outdated system in need of modernisation. Many small operators are struggling to compete, clinging to antiquated workflows in desperate need of innovation. Consolidation is proving elusive due to fragmentation of the market, although advances in IT offer opportunities to streamline operations and reduce costs.

The paradox of progress applies; operators acknowledge the limitations of the traditional request and quote system but resist change. This inertia is the status quo bias; the mental effort required to transition to something new can be perceived as a cost, and any perceived risk associated with change can outweigh anticipated benefits. Long known for its conservative approach, the business aviation industry often prioritises familiarity over potential advancements. Transitioning to a new platform can be a complex process, both for operators and technology providers, and successful implementation requires active participation in the adoption process.

Furthermore, operators remain focused on market share, neglecting the potential to improve contribution margins through increased operational efficiency.

While the industry is seeing increasing adoption of software, most solutions address specific pain points without complete disruption. 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 digitalisation among operators. The way forward is not to completely abandon established practices. Many operators are used to the request and offer system. The key to success lies in finding solutions that bridge the gap between the current system and the possibilities of a fully digital future.

Is this expensive? Some fear it might be so continue to rely on manual processes. A significant number use in-house-developed solutions, or older systems that are still functional and in which they may previously have invested heavily. It’s crucial to address this by framing investment in new technology as a step towards future growth. Legacy systems are a sunk cost and, while functional, may eventually become obsolete.

The holy grail would be a platform that completely replaces what we have now, can achieve immediate and widespread adoption, offers an extensive feature set, is user-friendly and comes at a minimal cost – it's a tall order. Matching solutions, such as VOO, are already available and fully operational, yet suffer from the same hesitancy from operators. But they are well positioned to play an important role in digital transformation and, for the most part, provide comprehensive training and support.

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). 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 utilise software capabilities to extract more value from data, and make more informed decisions, faster than the competition.

Many recognise the need for change despite a reluctance to abandon established practices. No one likes the limitations of the traditional system, and there are ways to make the transition smoother. Operators who currently use a 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. And ideally, the system will integrate with broker CRM systems to give end customers direct access to booking information.

Technology solutions, she says, are already available for operators to use, and the hope is that digital transformation will propel the industry forward, making it, and operators, stronger.

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