VistaJet and Jet Aviation Want to Rule the World
When European jet company VistaJet began operations in the U.S. in 2013, it had the deck stacked against it. While it had expanded during the recession—when many corporations rid themselves of private jets due to maintenance costs that could run upwards of $50 million a year—the company was relatively unknown to the domestic market.
VistaJet stood out from competitors by offering truly luxurious amenities: Christofle flatware and food catered by Nobu, a crew trained by the British Butler Institute and dressed in Moncler-designed uniforms, Egyptian cotton linens. But the biggest difference between VistaJet and its competitors was its strategy of offering all-inclusive one-way pricing and the uniformity of its fleet: It includes 72 planes—Bombardier Globals for long-haul flights and Challengers for shorter distances—which have an average age of under 3 years.
What VistaJet didn’t have in the U.S. was an aircraft management company to service its planes and manage operations. Enter Jet Aviation, a division of General Dynamics, which partnered with the company in a limited arrangement that initially oversaw operation of U.S.-registered Global 5000 jets. “The U.S. is now our No. 1 country in the world for signing up new subscription hours,” says Thomas Flohr, VistaJet’s founder and chairman. The company’s expansion in the country against market leaders such as NetJets, Flohr says, is due largely to the quality of Jet Aviation’s operations, including the expertise of its pilots and its superb safety record. Jet Aviation vice president Don Haloburdo adds, “You can’t afford not to be partnered with people who share your values.”
Four years after that initial deal, Jet Aviation now operates all of VistaJet’s domestic U.S. flights on the U.S.-registered Global 5000s and Challenger 350s. Worth sat down with Flohr and Haloburdo to discuss their partnership’s growth.
HOW HAVE CHANGES IN PRIVATE AVIATION AFFECTED YOUR BUSINESSES OVER THE LAST FEW YEARS?
TF: Corporations and individuals are moving away from asset-heavy solutions such as fractional ownership or full ownership. Fractional is worse because you’re not in control of your asset. That’s where our growth is coming from. We grow 20 to 25 percent a year, while our competitors’ flight hours are only growing 5 percent. That means we’re taking market share with our solution—that’s the simple math. There’s a huge business benefit by having access to a fleet of aircraft anytime anywhere in the world at a moment’s notice. Executives can use their time better by not flying commercial.
DH: In the past companies spent all kinds of money setting up private flight departments, building very expensive hangars and just putting a lot of money and cost into a situation that they don’t need to.
WHAT DOES THE VISTAJET–JET AVIATION PARTNERSHIP OFFER TRAVELERS?
TF: Jet Aviation pilots can fly anywhere. They can take VistaJet’s own aircraft registered here in the U.S. and fly from Dubai to Beijing. That is the network our clients are benefiting from. It gives us the flexibility to operate lines easily, to have crews shared between the different aircraft, and that means clients get the VistaJet product all around the world.
DH: We provide a consistent experience, particularly on the cabin service side, where we have a seamless integration in training.
TF: In the past you had to spend tens of millions of dollars to have that privilege. We lowered that entry point with VistaJet and JetAviation to just buy the hours you need, use the aircraft you actually need for that flight—use a 350 if you pop down to Florida, take a Global if you go up to Seattle or Hawaii—and pay as you go. Yes, we have little goodies such as WiFi connectivity and mixed drinks crafted by a world-leading bartender—that’s all very nice stuff, but the underlying trend is we made business aviation more affordable at the top end.
JET AVIATION DOESN’T HAVE THE MOST FBOS. ISN’T THAT A DISADVANTAGE?
DH: We don’t need to be everywhere. We just need to be in the most connected cities around the world. We’re serving a very large segment of the business aviation community. Jet Aviation is not ever going to be the leading FBO by the number we have around the world, but by being in the most connected cities providing jet services.
TH: While we recognize that the FBO is an important aspect of the value chain, the real driver is beyond the physical real estate of the FBO. What’s happening in terms of pilot attitude, safety, training, quality and the flight experience is what matters.
SO BREADTH IS MORE IMPORTANT THAN QUANTITY.
TF: We’re the only company covering the globe. We currently have a 2.7 percent market share globally of 1.8 million hours being flown in our marketplace, and we’re marching toward a 10 percent market share whether it takes three, five or seven years.
SOME IN THE INDUSTRY PREDICT SPACE TRAVEL WILL BE A COMMON MEANS OF TRANSPORTATION IN THE NEAR FUTURE. YOUR THOUGHTS?
TF: It’s a huge undertaking that we want to serve the world by taking market share from fractional or full ownership. So far we don’t have any outer space requests. Outer space can be covered by other providers; we’ll focus on what we’re good at.
DH: Jet Aviation doesn’t have plans to take passengers on space travel. But if Thomas changes his mind, we’ll try to figure out a way to support that.