{:en}BizavWeek continues to actively communicate with key players in the domestic business aviation market. Our main task is to understand the market sentiment and, if possible, predict the near future. Today our guest is the head of the Russian company TOPAVIA Denis Mazirka.
Denis, we are all closely monitoring the situation in the domestic business aviation market. Forecasts differ from each other only in tragedy. What is your personal perception of the market? Is this a “long-term bottom” or are we still in a kind of protracted recession with the possibility of a correction in demand in the near future?
Of course, it is difficult to make such predictions, especially recently. There are always several opinions on this or that matter, and in the end, anyway, someone will be right. Now it is difficult to predict how the market will behave due to the fact that it is not clear what will happen in the world in general. If, for example, there is a war, this is one story, if it does not exist, and the price of oil rises and the sanctions are lifted, then it is completely different. There are many more factors. From personal feelings, it seems that everything should work out, and relatively soon we will begin to get out of the crisis. Now there was a decline, natural for this period, and it is observed during a stable situation. And now it is already clear that customers are reviving, there are more applications for both charter flights and services for the purchase / sale of aircraft. So I see no reason to panic.
The numbers over the past six months clearly indicate a shift in customer priorities. The share of domestic flights is growing, albeit against the backdrop of a strong decline in international destinations. Can we say that the domestic market will soon somehow, but compensate for the loss of international traffic?
I don't think there will be any significant changes here. People who are accustomed to vacationing in Nice and Sardinia will not fly to Crimea. It is difficult for me to give an unambiguous assessment of why this is happening. Perhaps, with the advent of the crisis, people are forced to solve problems on the ground, in Russia, perhaps someone is looking for new opportunities to expand and do business within the country. There was the Olympics, there was the annexation of the Crimea, the regions are growing, these factors could affect the situation.
How much has the client's profile changed over the past six months?
I would not say that the client's portrait has somehow changed very much. Most people are more careful about spending, but I can't say that this was not the case before.
Is there a shift in aircraft types, for example, from large business jets to medium and small classes?
Yes it is. But then again, I can't say that the people who used to fly the Challenger took and switched to the Hawker. Such tendencies are noticeable – people began to bargain more often, compare prices from different brokers, study the offers on Empty Leg more carefully, try to ask for a plane from their friends, although they had not done this before. Of course, there are cases when they can reduce the number of passengers on the flight in order to take a smaller and cheaper board, but they are rare.
What options does the client refuse to optimize flight costs?
Honestly, here, if we do not consider a downgrade in the aircraft class, it will not be possible to save significantly. How can you save on the flight, on food? Yes, of course, but this is not a significant part of the budget on our flights. Well, what's the point of taking a jet for 30-40 thousand euros and flying hungry? Of course, the client is always right, but from my point of view, this is complete absurdity! Well, you can refuse VIP-lounges, and even then, this is more likely only in Russia, in most other places they are not needed anyway. All the most expensive items of flight expenses are actually required. We cannot refuel in half or exclude services that are simply necessary to ensure the flight. All brokers are well aware of the little tricks on how to get a good flight offer, but we try to refrain from such advice to our clients. We know that if you book a flight as early as possible, you can get the best deal, but as often happens, shortly before the flight, plans change, you have to refuse, pay airline penalties, and book a new flight. I don’t know how much this can be attributed to options, but it happens that people are ready to fly from an airport that is less convenient for them, because there is the most economical solution, or they are less picky about the year of production of the aircraft if it is cheaper than the “fresh” analogue …
Are there more private jet charter flights and what are the pricing for these jets? Are they beneficial to the end customer?
I would not say that the situation has somehow changed dramatically, but there is definitely such a trend, and I think that it will continue to develop. Pricing mainly depends on the cost of the flight and the owner's appetite. Nevertheless, often, if there is no heavy workload, it is cheaper to take a purely commercial plane from well-known companies, but during high seasons it is impossible to do without the help of private traders.
The air broker is the key link between the client and the aircraft operator / owner. How can this “link” survive in such difficult conditions? Will the client benefit from the inevitable market redistribution among aviation brokers?
Clients always benefit from increased competition. This is the law and it works everywhere. The recipe for survival, although this word is still probably too strong today, everyone has their own, because everyone's situations are different. Someone improves the quality and quantity of services, someone uses the old proven dumping – everyone has their own solutions. We, in turn, try to look for new niches, engage in related services, here it is not so “stuffy” yet.
Classic air broker or online flight booking sites – who is the future?
It depends on how the projects of online platforms will be implemented. There are interesting ideas, products in which, perhaps, I myself am ready to participate. Today they cannot fully compete with classic air brokers, at least in our country, in Russia. But this area is so fast-growing and aggressive, I mean not only in our area, but in many others as well, that everything can very quickly change in their favor. We are watching this closely.
Denis, please tell us how TOPAVIA ended 2014 and what projects will be announced this year?
The impressions from the end of the year are mixed. On the one hand, a decline began in the last quarter, because of problems with the owners, we stopped selling flights on two planes at once, which also negatively affected our situation. On the other hand, we have a new direction – aircraft insurance, which we are developing now, there are promising deals for the purchase / sale, therefore, despite the difficulties, we are optimistic about the future. Regarding the announcement of projects, I think it is better to do this as the final agreements are reached. At the moment, there is something to do and something to work on.
