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Special Deliveries

<< Back to Robb Report, 2015 Private Aviation Sourcebook

Flexjet begins adding Gulfstream jets to its fleet. 

In a hangar at the Savannah, Ga., headquarters of Gulfstream Aerospace (gulfstream.com) earlier this summer, two new customized versions of the G450 gleamed under spotlights, commanding the attention of the small group of guests and media members who had been invited to watch the fractional-shares provider Flexjet (flexjet.com) take delivery of the large-class business jets. They are the first two planes in a 50-aircraft order that Flexjet placed with Gulfstream last year. The deal includes 22 firm orders and options to buy an additional 28 aircraft.

In front of the audience, which included Gulfstream engineers and technicians who developed the G450, Kenneth Ricci, the principal of Flexjet parent company Directional Aviation Capital, spoke about his affinity for Gulfstream aircraft, how he has logged about 4,000 hours piloting Gulfstreams, and how he recently bought his own GV. 

Later, Ricci spoke about his plans to make Flexjet the fractional-industry leader by adding a fleet of new long-range Gulfstream aircraft and by offering clients a new premium program that includes a dedicated crew for each jet and customized interiors for the aircraft, and another new program with a pricing system based on flight distances instead of flight times. 

Flexjet is celebrating its 20th anniversary this year. For its first 18 years it was owned by the aircraft manufacturer Bombardier, which supplied all of the jets for the fractional fleet. With the addition of the two G450 models, the company can now offer Gulfstream jets for the first time. Following the delivery ceremony, Ricci, seated in a leather armchair in one of Flexjet’s new aircraft, explained that the decision to place the order with Gulfstream came just after NetJets—the fractional industry’s leading company—signed a major purchase deal with Bombardier. “Since NetJets went with Bombardier, we asked ourselves, ‘Do we want to be the guys who have that same product, or do we want to be differentiated by our product?’ People aren’t going to come to us only because we have Gulfstreams—we still have to provide good service—but it was a market niche that no one else was holding at the time.”

Flexjet’s relationship with Gulfstream is not exclusive. The company is purchasing a yet-to-be-determined number of new aircraft from Embraer and Bombardier, because as Ricci explained, those planes suit the needs of Flexjet customers. But the new Gulfstreams—which will include at least 10 G450s, and a combined total of 12 G650s and G500s—will significantly grow the company’s fleet of long-range aircraft. Before taking delivery of the two G450s, Flexjet had only 11 aircraft capable of transatlantic flights. The first G650 is expected to join the company’s fleet early next year. That aircraft has a cruising speed of 561 mph and a range of 8,055 miles. 

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To further differentiate itself from its competition, Flexjet is launching the Red Label program, a premium tier of fractional ownership that will feature the company’s new Gulfstream aircraft and only aircraft that are 5 years old or newer, low fixed maintenance fees that reflect the newness of the jets, and a dedicated crew for each plane. “The pilots fly a specific [tail] number,” Ricci explained. “The fractional business used to be like an airline, where somebody who qualified in a Gulfstream might fly this plane next week and that plane the week after. We’ve changed that whole model because we think it offers safety and better service.

“Pilots like to be evaluated on how they’re doing,” he continued. “They want to know where they stand, and when pilots fly a specific airplane, their standing is very apparent. They can take pride of ownership not only in safety, but also in the pride that they’re achieving their missions. And mission achievement is what pilots like to do. I took a lot of pride to say that I flew around the world and never had a breakdown.”

Flexjet also offers the Global Access program, in which prices are based on flight distance, not duration. As Ricci explained, the first hour of flight is always the most expensive because of the amount of fuel burned during takeoff. Once the plane reaches cruising altitude, fuel burn decreases and with it, the operating costs. “It’s all in getting the plane in the air,” he said. “So the longer you go, the lower your price per hour will be.”

The interior of each Flexjet Gulfstream will be customized to include an S-shaped galley and one of three distinct design motifs. Ricci likened the cabin designs to the varying decor found in Ritz-Carlton presidential suites. “You don’t say, ‘Oh gosh, I hope it’s great.’ You know it’s going to be beautiful. It might be blue, or it might be pink, but you know it’s going to be bespoke in its own right, and that’s what we were shooting for here. I’m sure not everybody loves a black couch, but no one can fault us for having something that’s elegant.”

Following the delivery ceremony, Flexjet CEO Michael Silvestro boarded one of his company’s Bombardier Challenger 300s en route to New York and spoke about the appeal in general of private flight. “There’s something about driving up to the airplane knowing that it’s waiting for you,” he said. “It’s a sense of accomplishment that’s very special to me.”

A moment later, the Challenger sped down the runway, and as the wheels lifted and the tarmac disappeared from view, Silvestro smiled and said, “This is a thrill that never gets old.”

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Flight Club

According to members of the Robb Report Private Aviation Advisory Board, the flight-services industry has stabilized. The companies that survived the Great Recession are solvent, and new companies seem to be on firm footing. One new business is finding success by borrowing from an old business plan, and an industry leader has a new but familiar leadership team.  

“It’s déjà vu all over again,” says advisory board member James Butler, the CEO of Shaircraft Solutions. He is speaking of the industry as a whole, but he could be referring specifically to Wheels Up (wheelsup.com), a membership-based private aviation company that entered the market in 2013 with a fleet of Beechcraft King Air 350i turboprops and Cessna Citation Excel/XLS business jets. In May, Wheels Up announced an order for 35 new examples of the King Air 350i, a perennial Robb Report Best of the Best selection. But the aircraft are only part of the company’s appeal. “It’s about things other than the plane,” says advisory board member Keith Swirsky, the president of GKG Law. “It’s about the attraction that people have to the membership.” 

Wheels Up memberships include benefits from the company’s Wheels Down club, a lifestyle, events, and concierge program that provides access to exclusive parties and events such as the Super Bowl and the Masters. Wheels Up recently partnered with the Greenbrier in West Virginia, enabling members to book preferred tee times on the resort’s members-only golf course and giving them access to special events at the Greenbrier Classic, a PGA Tour FedEx Cup event hosted by the resort. 

Wheels Up was founded by Kenny Dichter, who revolutionized the private aviation industry in 2001 by launching Marquis Jet and its 25-hour flight card. In 2010, Dichter sold the company to NetJets, which used to offer a host of concierge-style perks to its customers but has scaled back on them in recent years. With Wheels Up, Dichter has brought back and evolved this business model. 

“Kenny hit it on the head with the trend, and he no doubt would say that his plane is superior and his price point is fine and people are flying the hell out of his product,” Swirsky says. “But I think people want to be a part of a club. They want to enjoy the benefits that club membership offers.”

Meet the New Boss

The new leadership team at NetJets (netjets.com) includes newly promoted chairman and CEO Adam Johnson, who previously served as vice president of sales, marketing, and service, and Bill Noe, who has reassumed his roles as president and COO after briefly leaving the company. According to advisory board member Peter Agur Jr., the chairman and founder of the VanAllen Group, the NetJets shakeup is a promising development. “I’m optimistic that they’re going to realign themselves with the needs of the customer,” he says. “The CEO who just left [Jordan Hansell] was not perceived to be customer oriented, nor was he perceived to be an advocate for his own employees. So it appears that the change in leadership is likely to lead to better times for NetJets.” 

Last year, VistaJet (vistajet.com) entered the U.S. market with a fleet of Global 5000s operated by Jet Aviation. In July, it introduced the Challenger 350 to the U.S. fleet with plans to have four by the end of the year. The Challenger 350s are operated by Priester Aviation.