Flapper's CEO Paul Malicki.
Economy

The Brazilian app that wants to make business aviation something popular

In an interview with LABS, Flapper's CEO Paul Malicki explains how the platform has attracted users to share private flights and charter airplanes via mobile

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Traveling aboard an executive jet in Brazil is for the few. And it is precisely this affirmation that Flapper intends to change by allowing more people to enjoy premium aviation facilities and services, by democratizing business aviation. After three years of operation and 20,000 paid users on the online platform that connects passengers and air taxi companies, it has proven to be a feasible mission.

Founded in 2016, Flapper positions itself more like a “boutique airline” than an “Executive Aviation Uber”. In order to do so, it sells seats on air taxi planes on pre-programmed routes and intermediates the charter of planes to any destination in Brazil and even to another country. A seat on a flight between Sao Paulo and Angra dos Reis can cost BRL 300 and another until Trancoso can cost BRL 1,500. All booked from a mobile phone app where you can view available flights and aircraft, quote charters, and pay by credit card.

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The startup was welcomed by ACE accelerator and received an investment of BRL 3 million from Confrapar and Travel Capitalist Ventures funds. In October this year, it beat Pitch @ NBAA at the world’s largest business aviation event that took place in Las Vegas, United States.

Leading Flapper is Polish Paul Malicki, who was CMO of Easy Taxi and served as an advisor to Mastercard, Farfetch and Nubank. He was listed in 2017 on Forbes 30 Under 30.

Flapper’s CEO Paul Malicki at the startup’s headquarter. Photo: Flapper.

In this interview with LABS, Malicki talks about the challenges of being an aviation startup in Brazil, the strategies to grow the user base and future plans that involve even autonomous drones.

LABS – Aviation is a very complex and closed market, full of regulations and variables. In Brazil, there are still cost and infrastructure issues that limit the sector’s growth. How to overcome these obstacles to facilitate people’s access to air transport, specifically from the premium market?

Paul Malicki – We believe there are two engines that help and are crucial to the journey of executive aviation democratization. First is technology, in its broadest definition. In our case, it is the use of an app for flight distribution, online payment services that allow the use of credit cards, anti-fraud systems, etc. We use technology to educate the market and bring business aviation closer to the end-user. The second pillar of this strategy is the sharing economy itself. And this we have already proved several times. For example, we could offer a flight between Sao Paulo and Rio de Janeiro or Angra dos Reis, for BRL 950 precisely because it is a shared flight. When we put technology and sharing economy together, they help scale the business a lot.

LABS – There is also the convincement of users, who are used to commercial aviation. Airplanes are different, smaller, in some cases single-engine, turboprop. How to break the barrier, especially fear and stigma, and clarify costs?

Paul Malicki – We are challenged by the lack of user education; the lack of understanding that flying in business aviation is safe. There are accidents on private piston-engine airplanes in remote and unstructured locations. But the user does not understand the difference between this and a jet or air taxi turboprop. That is why we explain the product well. In the app, the user has an explanation of everything, as it is, the capacity, and if it is approved. The product is the most important thing and we have to explain that the plane is safe. All this generates certain confidence. We share data and examples that used to be hidden from the end-user.

LABS – Brazil has one of the largest general aviation fleets in the world, but it is restricted to a small number of people and companies. Many of these aircraft are grounded, without flying, and causing damage to companies. Is it possible for plane owners to come in as partners too?

Paul Malicki – Today we have two markets, the air taxi with 450 aircraft, and the private market with about 12 thousand aircraft. The difference is huge. The point is that the air taxi has requirements that an airplane owner cannot easily fulfill, such as having two pilots, training, a simulator, stricter maintenance, and passing ANAC [the Brazilian National Civil Aviation Agency] inspections. It is difficult to be an air taxi in Brazil. We work with companies in this sector and complement the offer with private aircraft, but they are in the air taxi.

There is a bill under discussion in the Brazilian Congress that deals with the creation of a private air taxi subsector, with the simplification of the rules. If this happens, there will be more options.

One of the reasons for this law is, for example, (a situation in which) someone who lives in the Amazon region needs medical attention and is in a place that can only be reached by plane. Currently, the law does not allow a private plane to go there and transport this person.

LABS – Is this one of the difficulties you encountered when starting a business in this sector in Brazil? Many people talk about the costs in Brazil, that it is harder to do business, that there is a lot of bureaucracy, many rules, and little freedom…

Paul Malicki – It is difficult to disagree with this thesis. I’m a fan of Brazil, it’s a fantastic country, it gave me a career opportunity, but it’s a country of monopolies. As they say, it is not a country for amateurs. To be an entrepreneur here you have to be strong, you need a very broad vision and a very good understanding of the market. And that generates cost. That is why there are so many monopolies in Brazil. In our business, we had seven competitors when we started and today we have none.

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LABS – Flapper was born in 2016, a period when the economic crisis in Brazil was getting worse. How did the company managed to go through that moment and stay in the market?

Paul Malicki – We started in the crisis period, but it was the only way to start the service because in the crisis the air taxi operators needed us, contracts were terminated and the planes were underused. We managed to move them. And since the launch of Flapper, we have grown during every quarter. Of course, this is a seasonal product, very strong at the end of the year, for example. However, we still managed to grow in every period.

In November, we will break our revenue record and this is in line with our plans. It will be the first month with break-even.

It is a profitable business. The prospect of growth is very ambitious. Today we have 20,000 paid users with the potential to reach 2 million people who can pay per seat in business aviation. We are still in the beginning.

LABS – In some cases, Flapper charters the plane in advance and sells the seats. How to deal with the risk of not selling enough and bearing the brunt of that flight?

Paul Malicki – Of course, we are at risk with some flights. Yes, we have losses. However, it does not mean that the business has a loss. In the case of the stretch from Sao Paulo to Angra do Reis, it is practically profitable. Angra makes money by selling more seats than the plane costs. On the other hand, a flight between Sao Paulo and Rio de Janeiro is more complicated because we compete with others. And any business has risk.

LABS – The next barrier is autonomous vehicles. They already exist on the ground but are still under development for air transport. However, there is an expectation about the potential of this mode. What is still missing, whether in Brazil or in the world, for this to come true and how does Flapper intend to be a part of it?

Paul Malicki – Today we have 200 autonomous drone projects in the world. Of these, two actually did fly and ten more are in an advanced stage for this. An autonomous drone algorithm is 15 times simpler than a Tesla car, for example. There is no traffic, no light, pedestrians, etc. The first thing in this market is that it’s not a joke. These projects will happen and we are following them closely. We already have an agreement with four companies that are producing outside Brazil, but that can come here. We want to connect the Guarulhos Airport with downtown São Paulo, for example. We don’t have something concrete yet, but we’re talking to Anac, Decea [the Brazilian Airspace Control Department], SAC [the Brazilian Civil Aviation Secretariat], and everyone supports that. In the near future, I believe, we will have these vehicles.

Translated by Jennifer Ann Koppe