FlyExclusive flew from a standing start in 2015 to become the USA’s fourth largest charter operator by the early years of this decade. Now, 10 months after taking the company public and with a new fractional side of the business gaining traction, founder and chief executive Jim Segrave is looking forward to a “really good” 2025.
That comes after a challenging set of results for 2023 – largely the period running up to its December initial public offering (IPO) – during which the Kinston, North Carolina-based business made a net loss of $46.8 million on revenues down slightly to $315 million, from $320 million in 2022. Much of that fall had to do with its abrupt termination midway through the year of a deal with fellow charter provider Wheels Up, to which FlyExclusive was providing flights on a wholesale basis.
However, Segrave’s eyes are firmly on the immediate future after “a lot of transitional work to put us in a position for a really good year next year”. That has included a fleet overhaul, with the shedding of around 20 “underperforming” aircraft – mostly long out-of-production types such as the Gulftream GIV SP and Cessna Citation X – and the addition of new types that will return its portfolio to more than 100 aircraft this year.
In September, FlyExclusive struck an “aircraft management services agreement” with troubled fractional operator Volato, which has the largest HondaJet fleet in the USA, which will see it take over the running of Volato’s third-party owned aircraft. These comprise 13 fractionally owned, eight leased, and four managed examples.
FlyExclusive will work with the Federal Aviation Administration to transfer the aircraft to its own air operator’s certificate. In the meantime, it will operate flights for the approximately 184 fractional and 265 block charter customers on the Volato certificate. Under the deal, FlyExclusive will retain several Volato employees on consultancy contacts equivalent to their current salaries and pay Volato a monthly licence fee for its software.
According to Segrave, Volato’s aircraft can be added to FlyExclusive’s fleet with “virtually no additional overhead”. He adds: “We will leverage our infrastructure to make [the Volato business] a profitable part of how we operate. We are sure we can get 80-90% extra utilisation from these aircraft.” Volato recorded more than 12,000 total flight hours in 2023.
The agreement represents a dramatic reversal in fortunes for Atlanta-based Volato, which operates Gulfstream G280s as well as HondaJets. Company representatives rang the bell at the New York Stock exchange after going public through a SPAC (special purpose acquisition company) merger last December, the same month as FlyExclusive.
Textron Aviation Citations remain the biggest brand for FlyExclusive, representing around 80 of its soon-to-be 100-strong fleet. At last year’s NBAA BACE, the company was revealed as the fleet launch customer for the new CJ3 Gen 2 light jet, which is due to enter service next year. The previous year, FlyExclusive announced plans to take on up to 44 new Citations, including as many as 30 of the CJ3+, the current production version of the CJ3.
The CJ3+ order was the catalyst for FlyExclusive to launch its first fractional programme at the end of 2023 – until then it had operated a solely company-owned fleet, offering ad hoc charter as well as jet card membership programmes. So far, says Segrave, the company has sold 67 shares ranging from quarter ownership to one-sixteenths. “We are happy with our performance so far, and where we are going with it,” he says. “There is big competition out there.”
Wholesale services represent about 40% of FlyExclusive’s revenues, but this part of the business took a knock last year when FlyExclusive stopped supplying flights to Wheels Up over an acrimonious payment dispute. All Segrave will currently say about the situation is: “We are not supplying Wheels Up.”
However, providing services to other charter operators will continue to be an “important” part of the FlyExclusive model. “It allows us to sell empty legs and stay efficient,” says Segrave, who adds that there are rarely any conflicts of interest working for a company that is its competitor on another day. “When we fly a wholesale flight, the customer is the wholesale customer,” he says. “Our pilots provide a great service, but they don’t hand out business cards to passengers.”
As the company nears the first anniversary of its IPO, Segrave – who still owns 70% of the company stock – says the culture of the company has not changed. “There is more regulatory oversight, but in a way that’s healthy, and the accounting is different to what you can do as a private company,” he says. “But day to day, we run the business the same way, except that I have an independent board of directors now, who are smart and successful people who I can turn to for advice.”
In a currently thriving market, Segrave maintains that a lack of potential customers is not a concern. “We have built this model on taking market share, so demand is not an issue for us,” he says. “Constantly delivering dispatch reliability to stay ahead of the competition is the biggest challenge.”
