VistaJet's Thomas Flohr
Interview by Charles Alcock - February 1, 2010
Remember Victor Kiam–the man who liked Remington electric razors so much he bought the company? Well, you might say VistaJet chairman Thomas Flohr is Kiam’s alter ego–he disliked an industry so much that he started a company to try to fix it. The industry in question is business jet charter. When Flohr began chartering aircraft he became frustrated at what he saw as great inconsistency in service and an absence of transparency. So in 2003 he bought his own Bombardier Learjet 60 and within two months found it was in such strong demand for charter that he could hardly ever use it himself. So he bought a larger model, a Challenger 604, and then he bought an operator and this became Salzburg, Austria-based VistaJet.
Six years later–with business aviation enduring a historic slump–you might well ask whether Flohr wishes he’d stuck to his first professional callings, computing and finance, and kept his aircraft to himself. But apparently he doesn’t. On the contrary, Flohr sees the current crisis–which he believes has now passed rock bottom–as a catalyst for long-needed change and an opportunity.
What bothered you about business aviation when you came to it as a charter customer?
I didn’t know what aircraft and crew would be coming or who the operator was. It’s as if you book a hotel and have no idea what you are getting except a bed. Private aviation is like the Wild West. The industry gets away with it because it is still in puberty.
Also, the financial and contractual product was cumbersome and not transparent. It was hard to finance and expensive, while not giving you value. It was driven by a situation where there was no number two or number three, just one provider [NetJets Europe]. And there was no contractual framework that I felt was fair.
So we said, “It’s very simple, Mr. Client. Either we own the aircraft and will give you 200 hours [per year] or if you insist on owning the whole asset, we will buy back 600 hours and you have 200. Either way, you are free to do what you like if it isn’t what you want anymore. But the aircraft will be silver with a red stripe and we will operate it. If you want a pink carpet you need to go somewhere else, because this fleet has to be completely interchangeable. If I fly you to Dubai tomorrow and pick you up in four days, the likelihood that you are going to be on the identical airplane is close to zero but you won’t notice the difference.”
You’ve built your entire fleet around Bombardier aircraft, including the Learjet 60, the Challenger 605 and the Global 5000 and XRS. Why is that?
With NetJets, there are 15 or 16 types so it is highly complex in terms of pilots, landing permits, parts and maintenance. It is cumbersome and costly, and we
want to pass on as much of the economic benefit of our business model as possible to our clients.
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