The Asset Insight Podcast

Tony Kioussis (00:33):

Welcome to another Asset Insight podcast covering the aircraft ownership life cycle. I am Tony Kioussis, president of Asset Insight, and your host. Bluetail Inc. provides an aircraft record management system built for business aviation that allows aircraft owners and operators, the ability to digitize and organize their aircraft paper records including logbooks, maintenance records, manuals, and other related documents. Joining me today to discuss the company system and more importantly the value it provides to business aircraft owners is one of Bluetail’s co-founders, Stuart Illian. Welcome, Stuart. Thanks for taking the time to discuss your company service.

Stuart Illian (01:18):

Thank you for having me on today. I’m really pleased to be here and I appreciate that introduction you just gave us. Yes. So yeah, you hit the nail on the head. We are what I tell people, an aircraft records content management platform. We were built basically from the ground up as a clean sheet application built in the Cloud. And we gear our app towards owners and operators in business aviation. And like you said, we digitize those aircraft paper records. We organize them, we index them, we put them up in the Cloud, so we protect them. We make them shareable. We make them actionable. And the reception has been very positive to what we bring to the market.

Tony Kioussis (02:00):

Before we get into how Bluetail system works, I’d like to cover what it offers aircraft owners. In other words, what you see is the real value for utilizing Bluetail’s offering to the business aircraft community?

Stuart Illian (02:12):

Yeah, that’s a great question and one that we get frequently. So what I tell people is, first and foremost, Bluetail is peace of mind. It’s basically insurance that should your important aircraft records which includes the logbooks obviously, should something happen to them, that ultimately you’ve got those records protected and digitized in a system that is recognized by the FAA as being a legal backup. So that’s the first part, that your records are protected. They’re digitized. And I think it’s actually not known by everybody. I’m sure you know this Tony, that your aircraft records actually aren’t insured. You can ensure the aircraft, but the records themselves aren’t insured. So that’s the first piece.

Stuart Illian (02:57):

As you use the app, I tell people that there’s a number of different use cases. For example, if you’re getting ready to go and do a major maintenance event, a modification, a repair, an alteration, the old days, you would typically put the records in the airplane, you would fly out to the MRO and then they would have your records onsite. They start going through and looking for things like 3307, 3130s before they start the work, whereas now with Bluetail, that you can basically give the MRO access to those records well in advance of that major work. So there’s a whole proactive nature to looking at those records.

Stuart Illian (03:34):

And that same kind of situation applies on the sale side too. So if you’ve got to sell your airplane, the current way of doing that is typically you’d send your director of maintenance or your director of aviation, you put them on an airplane. They’d go and look at the perspective aircraft. They’d sit in a room and then they’re would peer through binders and logbooks and other records on a coffee table and just sit in a room for a couple of days to do that, whereas Bluetail allows you to share those records remotely so that prospective buyer can look at that airplane offsite and see everything that they want to see.

Stuart Illian (04:08):

So by definition, you have more people looking at the plane. There’s more transparency in the record. So those are a couple examples of the value we bring. One more quick example is in the charter world. Currently, and you’d know this Tony, when a 135 operator brings a new aircraft on the certificate, they go through a conformity process. It’s a very labor intensive and long process it can be. So in some respects, they do a lot of what we do today. They’ll hire somebody to scan those records. They’re tagging those records or organizing those records. What we offer today with Bluetail and what we will be offering in our next release the whole aviation is to take that time and basically crush that time. So if it’s two or three weeks to do that today, we see that as being something much less, maybe two or three days with our current version of the app and then where we’re headed with the app.

Tony Kioussis (05:01):

Okay. So how does the program work? How would an aircraft owner convert their paper records into the digital format offered by Bluetail?

Stuart Illian (05:12):

We thought long and hard about this process when we launched the company. And frankly, it took us a little bit longer to put what I’ll call the operations infrastructure in place. So that’s basically a scanning network of a few different partners that have 120 locations in the US and Canada, where one of our clients can take their records and have those digitally scanned. And I should say that these just aren’t any scanning locations. There’s a whole level of certification in the scanning world. One is SOC 2 Compliance, which means that there’s tight security in place, there’s cameras in place. These are professionals with high-end scanning machines, there’s chain of custody. There are all kinds of controls to get that level of certification. We partnered with these people that have these 120 locations. And those 120 locations are in the places where basically business aviation is, so places like Van Nuys, like Teterboro, Dallas, Seattle, Chicago. We’ve got five locations in Florida.

Stuart Illian (06:15):

So we really tried to go to the mountain so to speak, knowing that people aren’t going to send us their valuable log books through the mail. That just doesn’t happen. They’re just too valuable and there’s always some risk in doing that. So we have great locations close to where business aviation is and the client can drop off their records, or we can have a bonded courier pick up those records. We don’t keep the records long. Typically, if you’ve got three or four banker’s boxes, that’s maybe three or four days. We promptly return the records. And that’s when the magic starts. That’s when we go in with our customer service team, our customer success team, and we index those records, we organize those records. We compress the files, we organize them. There’s a very lengthy onboarding process. The way that that happens ultimately is per the client’s wishes because there’s all kind of different ways that we can do that organization. But that’s basically the process. It takes a couple of weeks from start to finish. That’s it basically in a nutshell.

Tony Kioussis (07:15):

Why would someone need Bluetail’s service if they’re using maintenance tracking software? In other words, how does your system compliment offerings from the maintenance tracking platform providers?

Stuart Illian (07:29):

Great question. That was probably the first big question I got even before we launched Bluetail. One person told me [inaudible 00:07:37] why I used XYZ maintenance tracking application. They’ve got 80% of my records. Why would I need Bluetail? So, my basic response is I kind of point people towards the commercial industry, which has great maintenance tracking companies just like business aviation, but they also have records management companies like Bluetail. And it’s been that way for many years. They’re two very unique things. And I think the high-level answer is the maintenance tracking companies, they basically do content creation. They’re generating work cards, they’re tracking life limited parts, calendar items, they’re forecasting maintenance for the next three, six, 18 months. Whereas, Bluetail is more of a content curator. We like to say that we are the back to birth history of the aircraft so our goal was to have a 100% of those aircraft records in the system.

Stuart Illian (08:30):

If you have a maintenance tracking system, they’re great for what they do, but I can guarantee you that all those records are not in a maintenance tracking system. Plus, we built Bluetail from the ground up to be a record’s management, content management system. So things like sharing, things like moving records around, adding new records, and all those different pieces organizing those records, we do that part extremely well. And that’s only going to get better. So there’s a very big difference between the two. I think it’s a perfect compliment. It’s a model that’s worked very well in the commercial industry. And we’re looking to expand that model in business aviation.

Tony Kioussis (09:09):

Yeah. As you stated, digital records systems have been used by the commercial airline side of the business for some time and they’re not inexpensive. How does the cost of those systems compare with what Bluetail is offering the business aviation community?

Stuart Illian (09:24):

Bluetail pricing is meant to be affordable and valuable so you’re basically looking at about $3 a day for a light jet, whereas in the commercial world… And in all fairness to them, I mean, if you’ve got an Airbus A340 with millions of parts on it, there’s a lot of paper obviously that’s generated for that. And think about that aircraft being owned by a lessor, and they want every last rivet track on that airplane. So it’s a very, very, very complex application and a factor of maybe 10X what Bluetail would charge. Plus, there’s a big IT component to making that work on their side. Whereas Bluetail, we recognize that if you’re a 14500 flight departments, sure you’ve got IT resource that can help with implementation of something very complex. But we like to think that anybody that would use our product, they don’t need a big IT staff.

Stuart Illian (10:23):

We make the product really easy to use. We make it affordable and valuable. There’s a noticeable difference between how we’re approaching the market at that. And we think that we’re building a better mouse trap, one that ultimately does some of the work that’s done in the commercial space manually today. They have this term it’s called the mechanical turking and I’m not making that up. It’s basically having analysts go through and scan things and index things and it’s very labor intensive. So our whole vision with Bluetail is to automate a lot of those processes and procedures because people don’t have the budgets in business aviation, but they should have a lot of those same tools at their disposal. That’s what Bluetail is looking to achieve.

Tony Kioussis (11:06):

I believe Bluetail launched in May of 2020, a tough time to be entering the market for sure.

Stuart Illian (11:12):

Indeed.

Tony Kioussis (11:16):

How’s it going so far and what have been some of your initial hurdles and challenges?

Stuart Illian (11:22):

Yeah, thanks for that. So we launched in May of last year. And we all know what happened in 2020. It was certainly a challenging year for everybody, commercial aviation, business aviation, general aviation, and of course all other industries in verticals. We spent a lot of time thinking, “Should we delay the launch, given the environment?” We talked to our advisors about it. I talked to my partner about it. And at the end of the day, we said, “Nothing’s really changed for why we built Bluetail. It’s a great idea and the market needs it so let’s get it out there and see what reception is.” And so in spite of the climate, by all accounts, we’ve been really successful. The market has really positively received Bluetail. The feedback has been really tremendous. We’ve got all the major OEMs represented in the platform now. We’ve got some more birds in the platform. We’ve got our first UAV, we’ve got some helicopters, we’ve got some GA planes representative. We’ve got a lot of heavy planes in there.

Stuart Illian (12:23):

We’ve been pleasantly surprised that the market really likes what we’re doing. And I guess, at the end of the day, we feel that if we could be this successful in such a challenging environment, that as things continue to improve, that the sky’s the limit for where Bluetail will go.

Tony Kioussis (12:39):

From an appraiser’s standpoint, the service that you’re providing is extremely valuable to the operator. I mean, the value degradation to an aircraft from the loss of records is pretty substantial, not for the faint of heart to be sure. I give you credit for providing a terrific service in the marketplace, which I think will help a lot of operators who have had the misfortune of having their records destroyed or misplaced, or what have you maintain the value of their aircraft. That’s terrific. So what’s next for Bluetail?

Stuart Illian (13:14):

We’ve got some exciting things that have been happening. We’ve done some recent hiring on the technical side, on the customer success side and on the sales side. And we’ve got a very, very detailed product roadmap that once we launched, we really started hearing from customers. My partner likes to joke that we took a crack at what we thought the market really wanted with our first release. And then as we launched, the customers have been telling us exactly where we need to take Bluetail.

Stuart Illian (13:42):

So our next release, which is currently in test right now and it is slated for release towards the end of this quarter, we’ve already been told by some of our clients and prospects that it’s a game changer. I don’t use that term lightly. And I started to touch on this earlier in one of your other questions, but our next release is going to have a search component to it that uses some AI. So machine learning, that’s part of our platform and available through some of the tools from AWS, whereby we’ll be able to basically upload documents, [inaudible 00:14:17] those documents, make them searchable either from your laptop, from a cell phone picture.

Stuart Illian (14:23):

And as near as we can tell, no one’s really done anything like that yet. So this gets back to what I stated about really trying to reduce and crush that onboarding time, that three weeks and taking that down to something that’s a lot less. So you reduce the time, you reduce the resources and ultimately you have a lot more utility in the app. Right now, if you’re in Bluetail, we index things, we use tags and keywords and descriptions to find things. This new release will basically make that all automated. So you could go in, for example, if you know a part number, you’re looking at a log book entry, and then you go to the work order and then you want to find some additional documentation through the part number, you can just do a part number search. You can do an 8130 form number search. I mean, you can do a search for an AMP technician and try to find all the records that they signed off.

Stuart Illian (15:19):

I mean, we have countless use cases that we’re going to be promoting as part of this new release. So that’s the big thing happening for Bluetail this quarter. And then, there’ll be some follow on releases in subsequent quarters that we’ve already identified that we’ll take advantage of that new technology. We couldn’t be more excited than we are right now with what we’re about to release. And customers excited about it. We’ve got some new business that’s coming as a result of this new release. We think it’s going to be, like I said, a game changer. It’s ultimately on us to prove that. You’ll soon see that in our marketing in a major release.

Tony Kioussis (15:55):

Terrific. Thanks so much. Great information. Anything we have not covered that you would want people to know about Bluetail services relative to the business aviation market?

Stuart Illian (16:06):

We get some technical questions around just compliance of the app. People have asked me before, “Well, if I get my records Bluetailed, does that mean that they’re FAA compliance?” So, I point to a couple of things when people ask me that question. There’s the FARs, right? There’s the FAR Part 43, covers all the maintenance documentation for what you need to put in the log book entry, how you monitor that information, how you control that information. So that’s the first part of the answer, that ultimately we have AMPs on staff that ultimately oversee. It’s a scanning process. That’s the first piece. But tied to that is, anytime we start a job, we deal with the director of maintenance with the maintenance facility. So basically, they control the records, they organize the records, we inventory those records, they monitor the process throughout. There’s an onboarding process. There’s a training process. There’s a handoff process where they basically go in. They verify that all those records that they gave us were scanned properly, that we didn’t miss anything, that nothing was duplicated. And they essentially sign that off.

Stuart Illian (17:13):

So the whole process is basically controlled from technical resources, both within Bluetail and on the client side. And then of course, we hand it off to their director of maintenance, to their maintenance department. And it’s their platform moving forward. There’s that part of it that speaks to the FAR. And then the other important piece is the advisory circular that covers electronic records, e-signature and manuals. And that’s AC 120-78A, and we’ve gone through every last word in that advisory circular. Bluetail is basically an approved aircraft records system for that advisory circular. So between those two pieces, if something were to happen, some records that have been digitized, were damaged or lost or stolen, Bluetail would be a legal backup for basically what I just said.

Stuart Illian (18:03):

So that gives our clients peace of mind. If the unforeseen should happen, that they would be legally able to use a Bluetail digital copy to satisfy compliance with the regulators.

Tony Kioussis (18:16):

How do potential clients get in touch with Bluetail? How would they get ahold of you?

Stuart Illian (18:21):

Yeah, so it’s really easy. Just go to our website, it’s bluetail.aero. You can just fill out a contact form. We’ve got a toll free number you can call, or you can just fill out a quick demo request. And what I tell people is, give us 15 minutes of your time. We can give you a real quick demo. You’ll get to see the app. We’ll get to ask you a couple of questions about how you keep your records today and understand your requirements a little better. And it doesn’t cost you anything. If nothing else, you can give us some feedback on the app because maybe it’s not appropriate for you right now, but then maybe it is. And then, that’s our hope. And we’d love to get you on the platform.

Tony Kioussis (18:59):

This has been another Asset Insight podcast covering the aircraft ownership life cycle. Please visit our ever-growing podcast library at assetinsightpodcast.com and select from any number of topics discussed with business aviation industry experts. This is Tony Kioussis and as always, thank you for listening.

If you enjoyed listening to this podcast or reading the transcription and want to engage with Bluetail, contact us today.