Founder and Chairman / PresidentVistaJet Group Holdings SA / Bombardier Business Aircraft
Berkshire Hathaway Chairman, markets guru and NetJets owner Warren Buffett once said “you should run, not walk the other way” in terms of following what’s trendy when it comes to market advice for business decisions. Bombardier Business Aircraft and VistaJet nearly a decade ago were among the few that bet against the red hot Very Light Jets market and focused on ultra long-haul private jets. That bet is now paying off with Zurich-based VistaJet’s fleet hitting the 50 jet mark. Recently VistaJet made its biggest news ever with a $7.8 billion order for 25 Global Express 5000s, 25 Global 6000s and six Global 8000s starting in 2014. Recently Elite Traveler Editor-in-Chief Douglas Gollan caught up with VistaJet Founder and Chairman Thomas Flohr and Bombardier Business Aircraft President Steven A. Ridolfi for lunch at The Four Seasons Restaurant in New York, where they talked about how they got their bet right and what they see for the future.
ET: Tell us about the start of VistaJet.
Thomas Flohr: We started about eight years ago with one plane. I thought all the white (private) planes were boring so I had it in silver. I didn’t like that so I put a red stripe down the sides and then it was cool. We started getting so much (charter) business that the jet was never available for me, so we bought another one. The people at Bombardier asked me how I wanted the interior and I was busy so I said “the same as the first,” so we started off with a standardized product.
ET: What did you do before VistaJet?
Thomas Flohr: My background is asset finance, which comes in handy when buying aircraft.
ET: At the time the smart money was on VLJs and air taxis, and most people saw the big growth in the short-haul market. What were your thoughts?
Thomas Flohr: In 2002 Goldman Sachs coined the term BRIC for Brazil, Russia, India, China—the fast growth emerging markets. The megatrend Bombardier and I saw was the need to get between these places and the rest of the world. And it is more than the BRIC countries: Mongolia, Kazakhstan, Uganda, Nigeria, Angola and you can go on. Some of these economies are growing at 15 percent. The year is not done and so far we have flown to 136 airports in Africa alone!
Steven Ridolfi: It used to be somebody from Nigeria came to the US to go to school and when they finished they stayed in the US or London to make their fortune. Now they go back to their home country to launch their businesses. At the same time Western businesses are looking to these countries to expand. A typical trip includes visiting a partner in Russia, seeing a supplier in China and then a customer in Australia. Commercial airlines are not set up to accomplish these missions easily.
ET: How is VistaJet doing?
Thomas Flohr: In 2012 we will have had 10,000 flights and will have transported over 25,000 individuals on those flights. Our revenue this year is 25 percent up over 2011 and that is on top of 22 percent growth last year and 20 percent in 2010.
ET: What about the recession?
Thomas Flohr: We know there is a recession, but to be honest, when you go to Ulan Bator or Luanda you don’t feel like there is a recession.
Steven Ridolfi: And when you are at the airport and you see the private jets parked there it means there is a chairman, CEO or UHNW individual there because there are business opportunities. We see 24,000 new private jets being delivered by 2030. The wealth is out there. The need is there. There is a lot of runway for us!
ET: What do you see in terms of future travel patterns?
Steven Ridolfi: It used to be a lot of travel was just within North America or within Europe, now it is from China to Brazil.
ET: Anything else you would add?
Steven Ridolfi: The airplanes are bespoke. Our customer base is about a third UHNWs, a third corporations and a third fleet operators such as VistaJet. With UHNWs we see the demand for customization like showers and high design.
Thomas Flohr: When you are flying 200 or 300 hours a year it might make more sense to use VistaJet than own your own plane, so we have a huge customer opportunity. At the same time we have corporations that need extra (long-haul) lift and even UHNW jet owners who need to fly family. VistaJet offers new planes and the type of style and experience they expect.