Thomas Flohr is founder, owner and chairman of Swiss-headquartered block/on-demand charter operator VistaJet, which is building the largest owned fleet of business jets outside the USA.
How do you read the mood of this year's show?
Obviously the landscape is going to be completely different compared with the last couple of years. The manufacturers and suppliers especially are going to have a completely different mindset and expectation for the show. I think the general buyers' mood for services such as VistaJet, offering a programme of 100/200h [block time] rather than having to acquire assets, is going to be quite intense. There will be quite a good response. People will still want to fly private. I think the interest is going to be in a no-money-down flight solution. We have brought a couple of planes down and there is a lot of shopping going on.
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How has the economic downturn impacted upon VistaJet?
If you had asked me in November I would have been a lot more pessimistic. Once people realise that their worst case is say [their net worth declining from] $500 million to $200 million they're going to say: "Now let me find the best deal." That's going to be the attitude. The prohibiting factor right now is that the market is swamped with used planes. In an ideal world they would love to sell their jet at a fair market price and then move to a programme like VistaJet. What is holding this activity back is that they can't sell their used jet right now. However, having said that, there are a whole number of people out there who didn't buy a second jet and these guys today, they're not going to buy another jet. They're going to say: "Great, there's a 100/200h programme, and I get the standard of flying Emirates first class." That's what VistaJet is about. Our first quarter revenue was up 22% and the overall private jet market is down 20%. At the higher end of the market it's very resilient - [Bombardier] Challenger and upwards. The smaller the aircraft the more sensitive it is to the economic times. We're competing on Learjet and up, not Learjet and down. That, in combination with our geographic expansion into Middle East and Asia, is keeping us above everybody else.
Is the availability of cheap used aircraft affecting your business?
In 19 out of 20 cases, no. A one-aircraft operation is something incredibly cumbersome and inefficient. Your plane is in maintenance, the pilot's on holiday, somebody is sick, you have an AOG, etc. Our competition is not a used aircraft. If somebody wants to buy they buy anyway.
Last year you announced orders and options for 60 Bombardier business jets. Will you be scaling back on deliveries as a result of the downturn?
We've stretched them over longer period, probably some two years [longer] for some of the aircraft. It's simple numbers: if last year VistaJet doubled [in size] and this year we're quoting 22% [growth], I've got to adjust the fleet delivery to the revenue. Our commitment to Bombardier will stay the same but I've received a lot of optionality in terms of when exactly I need to take those planes. Our relationship with Bombardier is really like an airline. They give any airline the flexibility. I have to rave about Bombardier and the way they handled this [global economic] crisis. I think once things pick up again, we'll be among the first ones knocking on the door to take more deliveries, but there's no point in taking deliveries and having them sitting on the tarmac.
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What will be the focus of your marketing campaign at EBACE?
VistaJet right now is about the execution of the business model. We continue to hire top guys from the industry to lead our expansion. I want to put a stable manufacturer relationship in place, which we have [with Bombardier], I want to put a stable customer base in place and a stable employee base, and now it's clicking on the business model, Middle East expansion and so forth.
You have Learjet 85s on order for delivery from 2012. What role will this type play in your operation?
The Learjet 60 is a great aircraft and there is no alternative to it today. Bombardier want to deliver the Learjet 85 in 2012 and I don't know today if they will deliver it in 2012. In any aircraft programme I want to wait for the first flight. For our type of programme the Learjet 85 is a fantastic plane as it has a little more range. It really will be a replacement for the 60 and an addition to the fleet.
Will you be looking at business jets from other manufacturers during the show?
VistaJet keeps a close relationship with every [manufacturer's] chief executive. For the foreseeable future VistaJet needs a 4,000nm [7,400km] aircraft, widebody with 10 seats, and that's what the Challenger 605 is. Also we don't want to focus on too many aircraft types. We have four [types] and that's another efficiency issue. While we continue to talk to every manufacturer about future product developments, we feel very strongly about the Learjet 60 (and eventually the 85), Challenger 605 and Global Express.
Are you considering adding aircraft larger than the Global Express?
There is a market but it's very small and it's very owner dominated. I don't see the scaleability in that market at this point in time.
Are you seeing interest in block charter from corporations as well as individuals?
Our typical client is an ultra-high net worth individual worth $50 million-plus, who has a major stake in, or owns outright, a company. We are attacking the market for very large public limited companies and dealing with corporate flight departments more and more, but until recent economic times they weren't really talking to us. Now they have started talking because of the economic benefits.
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Do you have any ambitions to break into the US market?
I don't want to be in America because they don't value our service. I fly private jets in the USA and it is completely the opposite. There is no service, no flight attendant. I don't understand the US market and maybe one day someone can explain it to me? People still go to a Peninsular, Four Seasons or Mandarin Oriental [hotel] in the USA, but when it comes to business jets billionaires get a cheese platter and a stryofoam cup!
Has the pilot recruitment market eased as a result of the downturn?
Basically the market turned 180° within the last 180 days. You had pressure until October last year and now it's exactly the other way around and pilots are knocking at our door. We're priding ourselves that we believe we have certainly the top-notch, if not the best in the industry. That's a very crucial factor for our service because we want them not only to be a pilot, but the chief executive of that aircraft in terms of their attitude and the way they think and care about the aircraft and look after the clients.
What is your longer-term strategy for VistaJet?
I've reached with VistaJet a number two position outside the USA. Any business needs a number two. I'm not bashing Netjets because they've done a good job, but I'm saying: "Now the customer has a choice." I have never seen this kind of opportunity in a defined market and multi-billion dollar industry. I have only one focus and that is execution, execution, execution of the business model. At the right time there might be some great value in having a strategic shareholder, but they have to deliver more than money. There has to be a value for my clients.
Source: Flight Daily News
