There has been a recent upturn in the number of low-cost private aviation companies offering their services to larger sections of consumers.
This has had a two-fold diminishing effect on profit margins – customers have more choice so they can go elsewhere, and other elements of the industry (such as commissioning agents) have greater choice when it comes to who they wish to deal with.
Increasing profit margins has, in the current climate, never been so difficult, but it is still achievable. Here are four ways in which private aviation companies can increase their profit margins.
Understanding Your Successful and Unsuccessful Selling Points
Gap analysis is a very important tool when it comes to measuring performance. Gap analysis is done by comparing expected performance with actual performance. By accurately measuring different aspects of what your company does, you can identify areas in which you either overachieve, underachieve or are performing as expected.
If you are underachieving then you need to find out why. An idea you had – such as short hops between two specific cities – may not be achieving all that you thought it would. You can either cut this loss maker from your services or change the way it is managed or advertised.
In areas where you are overachieving, you can either cut your budget in order to increase efforts in other areas or invest more if it is generating more income than you suspected.
Only Work with the People Who are Pulling in the Business
It’s easy to get stuck with certain people – such as travel agents as an example – through loyalty, but there’s one simple fact about loyalty, and that’s that loyalty only stretches as far in business as the dollars that are produced.
If you are not solely responsible for generating sales, then you will need to thoroughly review all the channels by which sales are generated, and the agents or agencies that generate them. If you want to be successful then you will need to stick with those who are good at their jobs and give underperformers the elbow.
The same goes for any external companies, such as parts or fuel suppliers, that you deal with on a daily basis. If their performance is unsatisfactory, then any profits generated as a part of their input will be too.
Always Be on the Lookout for New Sources of Revenue
If your sales are underperforming (i.e. you are not bringing in enough customers) then you will need to be looking at new avenues by which you can generate them. Even if your sales are satisfactory, then it never hurts to look at possible new ways you can persuade people to put their backsides on the seats of your fleet and be whisked away to their destination.
For example, if you simply rely on agents to bring you, customers, then you perhaps need to explore your own online digital presence. If you have your own website where people can book and charter your aircraft, do your potential customers know where it is?
In the olden days (okay, maybe as far back as 2010) people went to the Internet looking for services. That remains true to this day, but additionally, people expect the Internet to come looking for them. This is done via digital marketing using tools that work with major online providers such as Google, Facebook or Twitter. It’s likely that your potential customers – particular those under the age of forty – will be exposed to those three sites on a daily, if not hourly, basis. If your online presence does not stretch beyond your own website, then you will be losing out on potential business to your competitors whose online persona is a little more ‘in your face’.
Don’t Do All This Alone …
When you started working with your private aviation company, it’s doubtful you did so with the intention of answering emails, sending Tweets and creating a Facebook persona for your business. You may even scoff at these ideas and prefer to use traditional sales methods such as real-world travel agents, but the reality is you’re probably neglecting your online presence as you’re not sure how to go about it.
No one expects anyone to become an Internet expert overnight, and if you try to or delegate others in your company to create something that’s alien to them, you’ll simply be pulling them away from areas where they are needed and the results will be less than satisfactory anyhow.
It’s far better – in all aspects of business areas that you are unfamiliar with – to bring the experts in to make much better improvements to your processes than you would ever be able to.
Here at Offland, we’re ready to work for you, and we’ll help you to increase your profit margins as best we can. Call us at any time at 1-800-504-5193 or use the online contact form available on our website.
