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VistaJet CEO takes aim at US before China push
“We’re in talks about setting up in China and we’re on track to get an airline operating certificate for China in the first quarter of 2014,” Flohr, who founded Zurich-based VistaJet in 2004 and remains the privately-held firm’s sole shareholder, told Reuters.
“China could be huge for us but I’m concentrating on getting the U.S. up and running properly first.”
The company, which offers long-haul flights at hourly rates across Europe, the Middle East, Asia and West Africa, will launch its U.S. fleet of long-range Bombardier business jets next March to be operated and managed by General Dynamics unit Jet Aviation.
However, VistaJet, which also has a major office in London, faces serious competition in the United States from market leader NetJets, owned by Warren Buffett’s Berkshire Hathaway Inc.
Travelers using NetJets are required to own stakes in the aircraft they use but VistaJet’s Flohr believes his clients - top companies and individuals from Russian oligarchs to Chinese entrepreneurs - now prefer to pay by the hour, avoiding the investment risk.
“The financial crisis helped us. People had been buying private jets and seeing their value declining so we had people coming to us saying ‘give us stability, a cost per hour and no asset risk’, and they continue to do that today,” the German-born Flohr said.
“For us the U.S. was the missing link. There are some 10,000 business jets in the U.S. compared to 8,000 in the rest of the world so the move will be transformational for us.”
VistaJet reported a 25 percent rise in 2012 revenue to around $400 million. NetJets has revenue of around $2 billion a year.
Investment bank JPMorgan said in a recent note that the business jet market remained “highly mixed” with a recovery in large-cabin jets, such as those used by VistaJet, being offset by sluggish sales at the smaller end.
Bombardier believes the business aviation market will be worth around $270 billion between 2013 and 2022.
VistaJet carried 25,000 passengers on 10,000 individual flights. This growth rate could top 30 percent once its U.S. operations are up and running, said Flohr, who is also in talks about entering India.
VistaJet, whose fleet currently consists of 35 Bombardier business jets, has had no trouble accessing finance to expand since the 2008 financial crisis, according to Flohr, who, as yet, is not keen to pursue a flotation of the business.
“Right now I enjoy owning 100 percent of the company, which allows me to be decisive and quick to take advantage of opportunities,” he said.
“We’ve had conversations with banks and institutions about the idea and maybe it could happen at some point but not imminently.” (Reuters)
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