FlyExclusive expands remote maintenance, focus on fractional

Patience has not only been a virtue for FlyExclusive Founder, Chairman, and CEO Jim Segrave.

It has been a necessity.

However, he says the steady approach is paying off on a multitude of fronts.

During an interview at NBAA-BACE this past week, Segrave covered a wide range of topics.

At the top of the list was the 2023 IPO.

While costly and putting its financials in the spotlight, it has provided both discipline and “healthy transparency,” Segrave says.

He sees the quarterly earnings call as an opportunity to speak with customers and provide a rundown of the good, the bad, and everything in between.

“Customers want to know what is going on,” he says.

Providing the updates as the chief of a publicly traded company offers credibility that privately held rivals don’t have in their messaging.

FlyExclusive was added to the Russell 2000 in September.

“This milestone increases the company’s exposure with institutional shareholders and supports our goal to drive long-term shareholder value as we continue to execute on our compelling growth strategy,” Segrave said at the time.

FlyExclusive Fleet Update

With three more CJ3+s coming by the end of the year and another trio in 2026, FlyExclusive will have exhausted its order book with Textron Aviation.

It is continuing to acquire pre-owned Challenger 300s and 350s.

Segrave says the company wants to expand its light jet capacity and “figure out” what’s next in the midsize market, where it has a large Excel/XLS fleet.

However, Segrave says the key is reliability.

“Our customers have busy schedules, busy lives,” he says.

“My inclination is they care less about the aircraft type (within a category) and more about the condition of the cabin and that they are on-time getting where they are going when they want, when they were scheduled,” Segrave says.

Part of its reliability boost has been exiting older aircraft and types that had dispatch rates in the low 30% range.

Reliability Focus

Another element is doubling the number of its mobile service units.

“I don’t care if an airplane is in maintenance between 8 pm and 6 am. What matters is it is available from 6 am to 8 pm,” Segrave says.

Six more trucks will be located in the Northeast U.S., Florida, and the Southeast.

The units include maintenance technicians who can repair aircraft at remote locations overnight.

Segrave calls it “return to service in a massively intense urgent approach.”

The units can also perform minor repairs, such as fixing window shades, seat controls, lavatory doors, and similar items.

Segrave calls some of the defects “small stuff the customers notice and remember.”

Different Approach

The FlyExclusive boss sees its fractional program as a key to continuing growth.

The likely way forward is via pre-owned aircraft.

The target is aircraft with 1,000 to 1,500 hours where “somebody took the initial depreciation.”

With its in-house capabilities at its Kinston, North Carolina, base, Segraves sees selling pre-owned aircraft shares as a “competitive advantage” enabled by its paint and interior refurbishment capabilities.

It is the structure of its fractional program that he believes gives it a unique pitch.

There are no monthly management fees; however, like its partnership and jet card programs, you pay a daily access fee when you fly.

The formula dates back to FlyExclusive’s early days, when it focused on building the fleet through triple-net leases.

Segrave says, “It started with our partnership program, which was people who bought the whole or half an airplane.”

He continues:

‘It was built for somebody who was going to fly sporadically, one day or two days per month, and may go a month without using it. And the idea was from the partner, when they’re not using it, they shouldn’t be paying the overhead, and that’s reasonable. If I have the airplane in my operation and I can use it, I pay for the overhead. On the days when you are using the aircraft, you pay for the overhead. That’s where it was born. It worked really well, so we put it together for our Club program, and it’s worked really well.’

Segrave notes that when launching its jet card, it was initially slow going, but it recently passed the 1,200-member mark.

Segrave continues:

‘When you look at the other jet card companies, they have this hourly rate where they are essentially trying to protect themselves. If you are going to do a short flight, they don’t want to get crushed, so they charge a high hourly rate and have daily minimums. They are all priced for that two-hour flight. But then, on longer flights, the high hourly rates don’t benefit the customer even though that’s more efficient for the operator. So, the programs protect themselves on short flights but penalize the customer on long trips. It’s a disincentive to take longer flights.’

He reels off the type of missions where FlyExclusive typically beats other fixed-rate jet cards by thousands of dollars, and sometimes more than $10,000.

Think flights over two hours, transcontinental flights, multi-segment same-day flights, and same-day round-trips.

By the same token, for sub-60-minute flights as your only flight in the day, the daily access fee means your effective hourly rate “skyrockets.”

For fractional owners, the daily access fee replaces the standard monthly management fee charged by most fractionals.

Segrave says, “It took a bit for the market to figure it out with the Club. Then, as people figured it out, and how it worked, and how much they were saving, we’ve seen a huge upflow of referrals from members.”

He describes the fractional program as “in its infancy.”

He believes the pitch takes time to resonate.

“Then they start to think about it. They say, ‘I go to Europe for the summer,’ or I really don’t travel in these months. With us, they don’t have to pay anything when they’re not flying.” It takes a bit of time for it to resonate, but when it does, you can see the lightbulb go on,” Segrave says.

In terms of patience, Segrave will need a bit to close his deal with Jet.AI.

This week, the duo extended their agreement through the end of the year.

At the same time, a previously elusive deal with Volato is now poised to come to fruition.