Speaking on CNBC’s Squawk Box, Flexjet CEO Mike Silvestro said the fractional share, lease and jet card provider is ready for any potential storms, financial or in the skies
Flexjet’s CEO Mike Silvestro made an appearance yesterday on CNBC’s Squawk Box.
During a roundtable with the program’s hosts, he said the number two provider of private jet fractional shares and leases is ready for bad weather, both in the skies and on its balance sheet.
Of course, in addition to the business talk, there was some levity as well. After Silvestro waxed about the flexibility his company provides private aviation users, Joe Kernan quipped, “That’s why they call is Flexjet.”
In terms of net worth needed to fly with Flexjet, Silvestro surprised the panel by saying $10 million.
Andrew Ross Sorkin retorted he expected the number to be closer to $50 million, to which Silvestro responded Flexjet is seeing more customers in their 30s and 40s entering private aviation at a younger age.
Positioned for a slowdown
Kernan asked, “Are you vulnerable to a big slowdown? Could you go out of business if there was a multi-year recession?”
Silvestro said, “Absolutely not.”
He added, 60% of its business is now corporate, particularly supplemental lift for flight departments and private aviation solutions for companies that don’t want to own their own jets, plus “sophisticated long-term customers.”
Silvestro told the audience a key attraction of fractional ownership with Flexjet is having a specific aircraft type with the flight crew who are full-time employees as well as the confidentiality of not being able to track tail numbers.
Rebecca Quick asked about who pays when there is extra flying time because of the weather. For the most part in private aviation, it’s the customer.
However, Silvestro noted while commercial airlines fly to 500 U.S. airports, private jets can access over 5,000. He said in many instances Flexjet can use an alternate minimizing any delay.
Flexjet new aircraft orders
Last month, Flexjet made news with a $1.4 billion order for Embraer’s Praetors and Phenoms in the morning. Then in the evening, it was the launch customer for Gulfstream’s next-gen G700.
Silvestro said Flexjet hasn’t set pricing for the G700. However, pressed by the hosts, he said estimated around $11,000 to $12,000 per hour, including fixed fees.
Earlier this year Flexjet launched a days-based model to sell shares on its G650 fleet. It also hinted it might use the formula for other large-cabin jets.