Internet Intermediaries Link Corp. Buyers To Operators

<B> Internet Intermediaries Link Corp. Buyers To Operators</B>

By Jay Campbell

Much like their brethren in commercial aviation, air charter companies are spending much of their time in 1998 in search of more efficient distribution channels.

With more than 5,500 independent vendors and tens of thousands of aircraft, charter companies face a greater marketing challenge than airlines do. They, too, are looking to new electronic intermediaries to bring the buyers and suppliers of charter services closer together.

Traditionally, charter companies have relied on print directories to get the word out to corporate customers. Buyers flipped through the directories, looking for a potential fit based on their needs in terms of aircraft, operational standards and location. They then called the charter operators to discuss availability and price.

The process has grown domestic aircraft chartering to a $6.5 billion a year industry, and the vast majority of charter business continues to be done this way.

But the industry also is searching for easier and more cost-efficient ways to distribute its product to corporations.

San Francisco-based Air Charter Net, for example, offers a free online reservation system for charter aircraft. Users complete and submit a basic itinerary form, which the Website service forwards to charter operators matching the necessary criteria. The operators then return a bid--including aircraft specifications, terms of payment and other information--directly to the buyer via the Website. ACN charges a transaction fee of 5 percent or less to the charter operators for each booking.

"It's a network that not only gives business travel managers the names and addresses of charter companies and their available aircraft, but also provides a forum to solicit price quotes for a single flight," said ACN president David McCown.

ACN's charter supplier network has more than 500 members. While the look-to-book ratio is low, acknowledged a spokesperson, it is improving.

In an effort to increase its exposure to travel decision-makers, ACN last month signed a partnership with Microsoft Expedia to include a link to the ACN Website.

Also on the Web, The Air Charter Guide has built on its longtime role as a news publication and guide for charter services to expand into a searchable charter locator for more than 16,000 leasable aircraft worldwide. The electronic database (www.guides.com/acg) also contains hundreds of U.S. and international operators and brokers.

ACN, meanwhile, is planning a summer release of its publication on CD-Rom. In addition to comprehensive data on operators and their training, insurance and maintenance, the digital version will include interior photos of individual aircraft, video clips, graphics, variable search options and distance calculators.

Another charter service is using not only a Website, but also the more traditional computer reservation system distribution channel. New York-based InterJet Online Services, developer of a geographically based charter aircraft locating system, is the first company of its kind to be included in the CRSs. A 25-page description of the company's services became available in Sabre in October and in Worldspan last month; InterJet is hoping to be included in Apollo this month. The description shows travel agents how to book a charter through InterJet, how to get paid, what kind of trip is a good charter fit and more.

"This capability is a great opportunity for travel agencies to expand their revenues in today's challenging air travel market, and it utilizes the same basic system procedures that agents now employ when searching itineraries," said InterJet president Sam Trowe. Travel agents request an itinerary by phone, fax or e-mail. They include in their request the number of passengers, when and where the traveler wants to go and the return date.

The request is returned in the form of a "wholesale charter quotation," which includes the price and a customized itinerary. The itinerary offers flights within 24 hours of a requested domestic charter and within 36 hours of a requested international charter. When the traveler confirms the trip, the agent signs and returns the quotation to InterJet and a representative books the charter.

The distributor's fee is included in the wholesale quote, and travel agents add to it their commission, which is represented as a percentage of the total flight hours. A typical commission rate is 5 percent, which on average amounts to between $375 and $4,500. "More businesses and individuals are using charter planes so they can get to both larger and smaller airports on their own schedules," said Trowe. "Because charter aircraft take off and land at private airports which are often closer to business travelers' destinations, this service can be a great time saver."

InterJet also has a Website (www.interjet-osi.com) where buyers can use a search engine to locate charter companies.