CitizenPlane: the first few months in review
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CitizenPlane started a little over a year ago and made its first sale in March 2018. Everything started when Charles chartered a plane to Hadrien. While doing so, he noticed that, for a round trip, he would pay for 4 flights.
Indeed, no plane can wait on the tarmac for 4 days: a plane is only profitable when it’s flying. Therefore, there are lots of empty legs: flights with no passenger, no cargo, merely to move the plane to one point to another. This got us thinking: why are these seats not monetized? As it turns out, 1) they’ve already been paid for (by the charterer) and 2) access to the distribution is overwhelmingly complicated.
Fast forward a few months: Alexis and I joined Hadrien and Charles in the CitizenPlane adventure to make sure anyone having free seats on a plane could sell them in minutes online.
CitizenPlane’s pitch
In order to do so, CitizenPlane offers tour operators, charter brokers and small airlines an online platform to de-stock part of their unsold air inventory online instantly.
Indeed, access to online distribution is difficult and marketing a flight properly even more so. To provide some hindsight, best airlines manage a 95% load factor (i.e. the number of seats occupied vs. the number of seats available), when the industry as whole hovers at a 84% average.
Of course, part of these unsold seats will never be sold (because they are part of inherent business losses, are not competitive, etc.), but a sizable volume isn’t sold because it’s simply not distributed. What’s more, distribution of air tickets is a rather mature market, with many resellers.
Hence, CitizenPlane builds the missing link between resellers and suppliers by acting as a virtual airline. CitizenPlane offers an exclusive stock of routes, fares and availability to travellers and provide them a uniform experience by managing all the after-sales process.
Main figures and popular routes
Over the past eight months, CitizenPlane has sold more than 36,000 tickets and re-distributed €5.5 million to suppliers. As of now, most of our stock is coming from various tour operators, mostly in France and Belgium.
Therefore — and rather unsurprisingly one may say — our most popular destinations are touristic Mediterranean spots: Tunisia, Greece, Spain and Turkey, etc.
Since we are looking at selling more long-haul flights during the winter season (when the sun is farther away), it will be interesting to see how this data changes.
Besides, an other interesting stat is the most popular routes chart. As you can see, there are some discrepancies in prices between routes. This can be explained by a simple demand / supply rule ; but also by whether the destination is part of the Open Sky or not.
Mainly, we can see that highest performing routes are the ones where demand is more important than supply during peaks (eg. Tunisia) and where Open Sky isn’t up and running.
Routes are to be read both ways. Indeed, CitizenPlane only sells flights on a per-leg basis. CDG-DJE can then be read as CDG to DJE or DJE to CDG. This is an important point of our model: customers can bundle our flights with any other airline.
This dramatically increases our distribution power: we can serve customers whose dates of travel do not exactly match what we have in stock. From a supplier perspective, flights balance out in the end, leaving planes with almost no vacancy.
Finally, it’s interesting to see that even though the big cities represent the bulk of our volumes, smaller cities are not to be forgotten.
For instance, in France, smaller airports account for 25% of Paris’ traffic.
Key learnings
Keeping in mind the relatively specific sample taken into account here, we can nonetheless share some key insights we have learnt:
- There is no difference between charter, low cost and scheduled flights on the short/medium-haul market. That’s understandable since planes are roughly the same (Airbus A320 or Boeing 737 families) and all economy seats adopt the same pricing model (luggage, seat selection, etc. are a paying extra). We sold various airlines, charter, scheduled and flag — there is no difference in terms of sell rate.
- Because flights all look the same, plane tickets are super-price sensitive. Even a 10% difference between a flag carrier and a low cost carrier (LCC) at roughly the same time is enough to make the balance tip towards the LCC. Let’s stop kidding ourselves with the rest, nothing matters more than price.
- What matters on the contrary are the flight’s time and whether it’s non-stop or not (especially on short-haul flights). About a third of our flights are not the cheapest but the best mix between acceptable times, number of stops and fare.
- Last-minute sells: on average, our tickets are sold 15 days prior to departure. Even though airlines are trying really hard to make people book as long in advance as possible, people still like the flexibility of buying last-minute.
- Because last-minute flights sell, it’s some huge potential revenue for distressed stock: if you have seats that you can’t sell or a very small inventory, you’d probably better wait until prices go up and maximise your profit or reduce your losses.
What’s next? On average, we noticed a fill rate of 50% on our inventory. These were seats destined to be doomed, lost for ever in the limbos of the air market. With this in mind, we’re now preparing for 2019, with more distribution power to open more markets. 🚀
Interested in CitizenPlane? Reach out at welcome@citizenplane.com or click the link below to learn more!
