The interior of a Pilatus PC-12 airplane
The interior of a Pilatus PC-12, used by Icon Aviation, a Brazillian business aircraft operator. Photo: Icon Aviation/Courtesy.

Individual seat sales boost business aviation and startups in this industry in Brazil

Startups like Fly Adam and Flapper take the lead when it comes to pricing these seats, but traditional companies such as Líder Aviação are also accelerating the pace to explore this new market

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Since the beginning of August, air taxi companies in Brazil have been authorized to sell individual seats to passengers, in much the same way as commercial airlines do. The permission of the National Civil Aviation Agency (Anac) came amid the COVID-19 pandemic and promises to leverage once and for all the business aviation sector in the country, which is already being pushed by startups that approached private aircraft to a brand new public, that previously did not imagine doing this type of trip.

The first step to take advantage of this new measure was taken by the startup Fly Adam, which started its activities in March 2020 as a marketplace for chartering business aircraft. In partnership with the air taxi company Icon Aviation, it started selling seats in flights between São Paulo (Congonhas Airport) and Rio de Janeiro (Santos Dumont) in September, on Mondays and Fridays. The price of the route in a Pilatus PC-12 airplane, for up to eight passengers, costs BRL 1,975. “We are going to bring more consumers to this market and offer more affordable prices”, says the CEO of Fly Adam, Daniel Diniz.

Daniel Diniz, CEO at Fly Adam
Daniel Diniz, CEO at Fly Adam, a Brazillian marketplace of business aircraft operators. Photo: Fly Adam/Courtesy.

Permission to sell individual seats solved a big problem for us, because we no longer need to be the agency that charters the flight, and now we can actually be the intermediary that connects the consumer to an operator

daniel diniz, ceo of Fly adam.

The part of the business responsible for pricing and selling individual seats is Adam Pool, and it is an evolution of a system created initially to help air taxi companies manage their aircraft. It was from this system that the Fly Adam marketplace emerged, which will now also sell individual seats directly to the consumer.

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A process that matured quickly, in the midst of the COVID-19 pandemic, and which already has more than ten partner operators, including some of the largest in the country. In summary, today, the startup has divided the business into three areas: Adam Pool (individual seats sales), Adam Private (charter) and Adam UTI Aérea (aircraft charter for medical transport).

The possibility of selling seats gave Fly Adam new horizons. The startup had to quickly increase its team to accelerate the development of the Adam Pool, after all the algorithms are crucial to achieving the best pricing process possible of the seats – there are about 40 parameters that allow the startup to set the price in real-time. “The project of selling individual seats is our big bet, a change from a customized trip to serve the final consumer. It is a new thing and we will find out in practice how it will work,” says Diniz.

A whole new market to be explored

As it is something new, neither Fly Adam nor the aircraft operators have an exact idea of this new market’s size. The number of business aircraft and air taxi companies certified in Brazil can give us an idea: there are about 600 airplanes, from 120 operators. Furthermore, the bet for this new type of activity is in the search for a different audience, consumers who never thought of flying in a business jet before.

“We did market studies, some international research, and we saw that this business model has proliferated a lot and its consumer profile is not the traditional audience. We believe that the younger consumers, up to 40 years old, are the ones with greater potential of using this service,” forecasts Flavio Pires, general director at the Brazilian Association of General Aviation (Abag).

It was Abag that took the air taxi companies’ demand about the new regulation to Anac. The major concern of the sector was the lack of clarity. Although they understand that they could already sell individual seats, the legal risks stand out. Therefore, what Anac did was to clarify the rules, which are initially valid for two years. The agency will open a public consultation process soon to format a definitive regulation on the topic.

Flavio Pires, general director of the Brazilian Association of General Aviation ABAG. Photo: Courtesy.

Brazil is still poorly served when it comes to regular aviation. Therefore, the sector saw the opportunity to occupy the spaces which commercial airlines do not reach. An opportunity presented itself. It is a new market not yet explored in Brazil

Flavio pires, director at the Brazilian Association of General Aviation (Abag).

The business aviation market is small compared to that of airlines, but it has been growing in recent years. Flapper, an air mobility startup founded in 2016, is one of the companies responsible for this recent growth.

In a way, the startup anticipated the individual seat sale, because in addition to chartering the aircraft, it also sells shared flights – Flapper charters the plane and sells the seats, even on pre-scheduled routes, such as São Paulo-Angra dos Reis.

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Compared to 2019, there was an increase of 200% in aircraft chartering on the platform, especially by people who had their first contact with executive aviation. According to Flapper’s CEO Paul Malicki, 40% of customers had never flown a private plane.“They were already first-class and business-class customers in commercial aviation, but they never flew in private jets. With that, we increased the size of the market,” he celebrates.

Currently, aircraft chartering represents 80% of Flapper’s business, but shared flights and individual seat sales are expected to grow. For now the startup does not have an exact date for starting selling seats, but it does know that the data obtained over almost four years of operation will help when that time comes.

“All the data we aggregate, helps to create a better system. This becomes a work of technology because later we make correlations and manage to improve the pricing system. This is very important because the Flapper Pool modality, which will be launched in the coming months, will be based on this information,” says Malicki.

Paul Malicki, CEO at Flapper. Photo: Pedro Vilela/Agencia i7/Courtesy.

This is our evolution. First, (we operate) as if we were Uber, from point A to B, which is the charter. Then we launch the pool because we already have the critical mass to sell seats. And eventually, we launch a pool model where the consumer creates his or her own flight

Paul malicki, Ceo at Flapper.

READ ALSO: Aviation startup Flapper adapts to respond to greater demand in cargo

Some traditional operators bet on their own technology

At the same time that Fly Adam and Flapper provide an almost ready system for air taxi companies, some prefer to follow their own path, with their own technology to reach customers. Líder Aviação is one of them. With an application created three years ago for the pricing of aircraft charter, the company will soon start selling individual seats on the same platform.

The idea is to not only launch scheduled flights and sell the seats, but also to optimize the use of aircraft on the so-called empty legs, when the plane is chartered for a specific route and needs to return to the base without passengers. With the possibility of individual seat sale, the company can offer this kind of route at a lower cost.

“We wanted to offer our service to more people and now we are, indeed, studying the demand, understanding, and crossing information from the consumer profile and the airline network in order to offer scheduled flights, but in a way that delivers value and that is not something that will die later,” says the director of maintenance, chartering and management of aircraft at Líder Aviação, Bruna Assumpção Strambi.

The sale of individual seats is expected to attract more people to business aviation, including passengers who would not normally think of private jets and would seek regular aviation.

Bruna Strambi, from Líder Aviação. Photo: Courtesy.

(The individual sale of seats) It will be more accessible, how much, we don’t know yet. I will be able to gain scale and, on some routes, enable a more attractive operation from the price point of view.

Bruna assumpção strambi, from Líder aviação.