Scott Duffy, founder and CEO of Virgin Charter, believes the biggest problem in private aviation is the difficulty of buying and selling journeys on the existing fleet of aircraft. He formed his online marketplace to tackle this issue.
By Clayton Moore
Few entrepreneurs can claim to have honed their business skills with Tony Robbins and landed Richard Branson as a strategic investor in their startup company. But Scott Duffy, the driving force behind the newly launched Virgin Charter online aviation marketplace, is proving he’s not just any entrepreneur.
By building up a powerhouse team of technology innovators and launching an aviation product with an unprecedented degree of transparency, Duffy has set out to change the face of the jet charter industry. His latest venture, originally formed in 2006 as Smart Charter, succeeded in attracting the attention of Virgin Group founder Richard Branson and the substantial investment and name recognition associated with Branson’s stable of companies.
Now Virgin Charter is taking the most useful technology features available online and fusing them into a powerful clearinghouse for the jet charter industry. After a successful test run last year, the service has opened to the public and is matching air travelers and charter operators together with ease and efficiency, while providing customers with unprecedented access to safety and quality data about each aircraft.
The primary function of Virgin’s online marketplace is to unite buyers who want to book private air travel with prescreened and qualified charter operators. With just 50 employees—many of them high-technology visionaries with experience at groundbreaking companies like Google—the Santa Monica, Calif.-based company has already received praise from CNN Money as one of “15 Companies That Will Change the World.”
Duffy first gained experience in the business world as a representative for motivational icon Tony Robbins. He later joined the technology industry, where he was responsible for launching successful websites that include CBS’s Sportsline.com and Fox-Sports.com. A few years ago, his introduction to aviation came through the fine art of charter flight brokerage.
Equipped with a deceptively simple interface and plenty of the Virgin Group’s playful humor, the Virgin Charter home page is an accessible entry point for both experienced and new jet charter customers.
“The more I heard about the private aviation business, the more intrigued I was,” Duffy said. “I decided to learn more about the industry by brokering trips myself. It was through that experience that I really fell in love with aviation. What I liked most were the people involved; that’s what got me hooked.”
With an unusual degree of foresight, Duffy started building a team of technology experts. They include Dr. Ron Garret, chief technology officer, who served previously as the principal scientist at NASA’s Jet Propulsion Laboratory and lead engineer for Google’s highly successful AdWords project. Chief scientist Steve Chien also heads the artificial intelligence group at JPL. More recently, the company recruited Eric Hofer, a travel industry heavyweight who led Travelocity Business to more than $1 billion in annual sales.
“We really have a technology all-star team that has come together to build this marketplace,” Duffy said. “What we’re great at is product development, technology and marketing and sales. Our staff is mostly comprised of people in those areas.”
Once the team was in place, they began building an aviation charter solution, not by reinventing the wheel, but by amalgamating the best features available in other successful online ventures.
“When we started to build this product, we asked buyers what they liked about different services available online,” Duffy said. “They told us they liked the simple interface of companies like Travelocity and Expedia. They liked the user ratings and buyer feedback available on eBay. They also found the idea of having operators compete for their business, the same way they do on Priceline, intriguing. We decided to combine all of those assets into this product to create the best solution for private aviation.”
Virgin Charter seeks to inform passengers about charter operators, as well as the class, quality and safety of the aircraft on which they will fly.
Duffy’s introduction to the Virgin Group came from a mutual friend. He quickly discovered that the multinational conglomerate had business interests that dovetailed with his own efforts.
“Virgin had looked into getting into private aviation for about two years,” Duffy recalled. “Richard Branson had the commercial airline, but he had always been intrigued by this space. Initially, they were going to build their own fleet, and when I met them, they were considering building a VLJ company. But what they kept hearing from customers was the same issue we were hearing. The biggest problem in the industry isn’t a lack of available aircraft; it’s that it’s too hard to buy and sell charter on the existing fleet.”
Although Virgin’s investment in the new company is substantial, Duffy believes that the Virgin brand is as significant an asset as its financial backing.
“Virgin is one of the most respected aviation brands in the world,” he said. “We’ve leveraged Virgin’s expertise in aviation to help build and grow this business. We’re now associated with a company that’s really the people’s champion. Richard currently has more than 300 companies with 50,000 employees on five continents. What impressed me is that if you look at where these companies are ranked in terms of customer service, by whatever ranking system audits that particular space, they’re always number one.”
With a stable technology platform in place and the Virgin brand behind them, Duffy and his team launched a test platform in June 2007 to gauge the reaction from passengers and charter operators to Virgin Charter’s service.
“The response far exceeded our expectations,” Duffy said. “We let a small number of buyers into the system and a relatively small number of sellers. The process confirmed our belief that there’s a very strong need for this product. Taking the technology approach to the problem is clearly what people are seeking. We’re seeing it with the demand on the site. People aren’t only voting with their trip requests; they’re voting with their wallets.”
Virgin Charter has replicated the best concepts from other successful online enterprises, such as allowing charter operators to vie for a passenger’s business with competitive pricing.
To reassure both experienced and neophyte charter customers, Virgin Charter has collaborated with established aviation safety consultants at J.D. Power and Associates, Wyvern Consulting Ltd. and Aviation Research Group/U.S. Inc. to provide what Duffy feels to be one of the most important components missing from the charter experience—information about safety and quality.
“I’ve often referred to the charter experience as the ‘blind date,'” Duffy said. “Sometimes you know what you’re going to get, and sometimes you don’t. Sometimes it works, and sometimes it doesn’t. I think the biggest problem in private aviation has been the complete lack of transparency as to what you’re going to get in terms of safety and quality. What we’ve done is create a marketplace where you’re going to get all the information you need: who an operator is, the specific aircraft, safety ratings, quality ratings, buyer ratings and price. Before Virgin Charter, you never knew what you were going to get. Now you have all the information you need to make an informed purchase decision.”
Virgin Charter has also formed an industry advisory board to create a quality rating program similar to those found in the hotel industry. Members of the company’s consortium include representatives from established and respected companies, including Key Air LLC, The Air Group Inc. and Showalter Flying Service.
To generate its own revenue, Virgin Charter charges passengers a small fee to use the site and charges operators a percentage, albeit a significantly lower one than those charged by traditional air charter brokerages.
Virgin Charter has already sold trips ranging from a few thousand dollars to multimillion-dollar journeys. The site currently lists available trips from about 100 of the country’s 2,500 charter operators, representing about 1,000 aircraft ranging from light turboprops to jumbo jets.
Some charter operators and industry observers have questioned the viability of Virgin Charter’s model and its potential impact upon the private aviation market, but Duffy says the feedback from its listed charter operators has been positive.
Investor and Virgin founder Richard Branson believes that buying and selling empty legs, represented by the company’s “Hot Deals” page, is one of Virgin Charter’s most promising opportunities.
“When we first started to talk to charter operators almost two years ago about our product, one of their concerns was that Virgin Charter could bring down prices,” Duffy said. “That was one of the reasons we went out to create the quality program. Many operators provide a great customer experience, but there was no way for the cream to rise to the top. The operators have been telling us that they’re encouraged that, for the first time, they have the opportunity to compete not only on price but also on quality.”
Duffy finds that the efficiency and expediency provided by private jet travel is a big boost to his own team’s effectiveness. He described the working conditions he experienced while recently traveling with his group to meetings in Boston, New York, Atlanta and Chicago within a matter of days.
“I never could’ve made it to those meetings by flying commercial,” he said. “I wasn’t only able to get to each meeting and accomplish our goals; the process of traveling in the private aircraft let us get more work done. It was a huge productivity gain.”
As Virgin Charter continues to collaborate with new charter providers and manage an increasing number of customer requests, Duffy finds himself poised to take advantage of the creativity and ambition instilled in him by the business icons that inspired him.
“I’ve been very fortunate,” he said. “I think what’s most remarkable about Tony and Richard is that they both have an incredible sense of possibility. We’re doing things at Virgin Charter that are helping to positively impact and reshape this industry. It’s great to have been influenced by people who are able to think so big and so far outside the box.”
For more information about Virgin Charter, visit [http://www.virgincharter.com].