Flexjet's Ricci: Privacy, reliability driving corporate private jet use

Flexjet, Inc. Chairman Kenn Ricci told attendees at the Corporate Jet Investor conference, which started yesterday afternoon in Miami that fractional ownership operators are benefiting from business travel demand.

Flexjet, Inc. includes jet card seller Sentient Jet, on-demand broker FXAir, and its namesake fractional brand. Next year, its European jet card and ad hoc broker PrivateFly will be rebranded as FXAir.

Business from the corporate side is being driven by the desire not to have their movements tracked.

Celebrity flight trackers like Jack Sweeney have shown that it is relatively easy to track the movements of owners’ jets, from Elon Musk and Mark Zuckerberg to Taylor Swift.

“A lot of large corporations have shares with us now that they use when they don’t want to be tracked,” Ricci told the audience.

Maintenance delays

Continued supply line challenges impacting private jet maintenance also increase the need for companies that own business jets to have guaranteed supplemental lift solutions.

“One of the things that the aircraft brokers (on a previous panel) were talking about was maintenance,” Ricci noted, continuing, “Just think – about a third of our (Flexjet) fleet will not operate on any day. That’s just the scope of what maintenance is today.”

While it’s a challenge for Flexjet, it’s also an opportunity.

“It’s also one of the positives because whole aircraft operators, faced with this downtime, pick it up on fractional, and so they transfer that problem that they have,” he said.

North America’s second-largest flight provider has been investing in in-house capability.

“We have 1,400 techs in our maintenance department spread over 10 different facilities, three completion centers,” Ricci said.

Ricci added that the key is the ability to do maintenance in-house on Saturdays and overnight when customers aren’t flying.

MROs typically work standard hours Monday through Friday, he said.

Last year, Flexjet Co-CEO Andrew Collins said the company’s decision to expand its MRO capabilities organically and through acquisitions was paying off.

In this year’s subscriber survey, 95.8% of Private Jet Card Comparisons subscribers who fly with Flexjet rated it Excellent/Very Good.

That was in line with 96.3% last year and up from 80% in 2022 during the Covid demand surge.

Ricci noted during the surge, off-fleet flying increased to 13%.

It’s now back to 2%.

2021 set a record for demand, surpassed only by 2022.

READ: Why private aviation’s supply chain and labor crisis isn’t going away

Pilot salaries

Corporate private jet owners have seen the salaries they pay to pilots spike. Ricci said that has also turned into a silver lining for Flexjet.

“On a micro level, the increase in pilot compensation has helped a lot because it doesn’t take a buyer too long to understand that higher paid pilots somehow translate to feel like a safer bet,” he said.

While Flexjet is a privately held company, Ricci noted, “We readily publish our pilot salaries today,” adding, “Our senior international pilots are (making) close to $400,000 a year. Our starting salary is $185,000.”

Flexjet IPO

Ricci also said he is happy that he ditched a planned SPAC IPO.

He told the CJI audience, “Number one was, I never had one owner call me up and say,’ Congratulations, you’re going to be public. ‘They all called to say, ‘Have you lost your mind?’ They asked if they were aware of the disclosures. ‘Are you aware of that?’ So, that was number one.”

Ricci said being public would have been a competitive disadvantage:

‘But the one that really struck home is when you start to go through the filings and everything when you go public is about explaining to amateurs what the potential risks are. So, you start telling you know what the what could go wrong with the business. In case you’re not in the marketplace, which I am every day, here’s how the sales pitch goes today. ‘I’m Warren Buffett. I have all the money in the world. Who the hell is Kenn (Ricci)?’ We bring people in and say we have 300 planes. We have the best pilots. We say come visit us at our operations center and see who we are. But (NetJets’) play always is, ‘You’re not financially stable like Warren Buffett.’ And I was just going to give them fodder in those filings that would have showed them all the chinks in the armor, and they would have construed whatever could have, and I just began to believe was going to be a horrible to sell in that marketplace.’

Ricci said the proposed IPO “was the biggest mistake ever…it cost me $30 million to not do the transaction.”