Aviaa wants to buy everything for you

Alud Davies
By Alud Davies June 7, 2018 09:22

Aviaa wants to buy everything for you

A new membership club formed by Aviaa wants to simplify how aircraft owners buy services. And it’s claimed it will save them money in the process.

Co-founded by former Hangar8 founder Dustin Dryden and group-purchasing expert Jim Hall, Aviaa was set up in 2017 to bring predictive analytics to the Group Purchasing Organisation (GPO) principle.

By signing up to Aviaa, aircraft owners get access to specially negotiated rates on services including fuel, maintenance and insurance. According to the company’s website, based on usual yearly operating costs, the owner of a Gulfstream G650ER, could save upwards of $135,000 per year.

Aviaa does this by going into the market and negotiating prices based on the group-purchasing principle, where discounts are giving for large orders. For aircraft owners the benefits are clear, but Aviaa’s CEO Gillian Hayes says she is often asked why a supplier would lower its prices.

“Customer acquisition and customer retention is really expensive, and we help with that. Marketing and sales are also very expensive. And although companies do have their own in-house teams looking at purchasing, we work alongside them,” she says.

Alongside volume and being able to reach customers, Aviaa also delivers suppliers repeatable business. And with more and more aircraft owners signing up to the Aviaa network, that volume and repeatability will only grow.

Following its soft launch in 2017, Aviaa already has just over 100 members signed up to use its services
Once new members join, they have the option of letting Aviaa’s analysts going in and looking through their books. A company will already have supplied its data to Aviaa, but Hayes says that, often, a company will agree to having her company look through the client’s books to act as a second set of eyes.

“They actually find it a great benefit in a lot of cases. Did you get the rate you were supposed to be getting? And if not, how can we mediate that? Did you have a pilot who decided to make a different choice than he was supposed to make? We can look at all of those kinds of things and help clients see where they are missing their savings on the supplier side.” Says Hayes.

Aviaa can also help suppliers find out why owners have chosen to use a different company’s services. They do this by talking to the owners about the choices that they make, trying to understand the value benefit of using one company rather than another.

This will often differ from what owners will tell the suppliers when they are taking their business elsewhere. Whereas, for example, owners could tell the supplier that they had chosen a different supplier because of choice, it could be because they simply don’t get along with somebody from the original supplier, or there’s just something about the supplier in one location that they just don’t like.

That can be fed back to the supplier, although Hayes is keen to stress that any feedback given to suppliers is not traceable back to an individual aircraft owner. But that feedback is a crucial part of the process and can often help a supplier realise they it has an unspotted issue in a place they did not realise.

That can work the opposite way around as well, with Hayes saying that they can spot trends and gaps in the market and can feed that back to the suppliers to help with any possible expansions plans.

“This is what people are doing in other industries, we just haven’t quite gotten there yet in private aviation. And that’s why its important to us to build the company that we have, where about half of our people are from aviation, because we have to have that deep aviation expertise, and half of our people are from other places. So we have people from financial services, from tech, from hospitality, and they bring those perspectives from those industries and we can take the best of all of that and bring it together to do what we do.”

For Hayes, who holds a PhD in computer science from Georgia Tech and is currently on sabbatical from her position as a tenured professor of Information and Computer Sciences at the University of California, volume is the biggest driver and believes that unless the company is truly global, across all suppliers and have a large number of members, there won’t be enough of a value proposition for it to be successful.

So far, just over 100 members have signed up and this number is growing rapidly. Hayes says that she sees 250 members as a tipping point, saying at that point Aviaa will be bigger than most management companies.

Aviaa could reach that magic 250-member number before the end of the summer, although its near-term goals are much higher. “I would like to be at 1000 members by EBACE next year. I do think that the pace will pick up, the first 20 customers are a lot harder to get than the however many, but I think that 1000 will be a push goal for us by this time next year, but why not do things in an audacious way. If we are going to do it, then let’s do it!”

Alud Davies
By Alud Davies June 7, 2018 09:22

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