““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
A New Way to Shop for a Jet
A Company called The Jet Business is taking aircraft sales right to billionaire main street with the launch in London of what it claims is the only retail outlet of its type. The first store in the chain opened recently at Hyde Park Corner, right at the meeting point of three exclusive neighborhoods–Belgravia, Knightsbridge and Mayfair. Now the company plans to add stores in Beijing and, eventually, New York City. "Think of it as Starbucks for billionaires," said Steven Varsano, the Jet Business' founder and managing director.
At the heart of the London boutique is a mockup of an Airbus ACJ319 cabin with an interior that can be removed to display other options. Beyond the cabin mockup is a meeting room featuring a video wall on which sample interiors can be displayed, along with data about available aircraft. On the other side of the store are six workstations–designed to look like cockpits–where The Jet Business' sales executives and technical experts confer with clients and match their preferences with available aircraft. The store–which mainly trades in preowned aircraft but can also assist with purchases of new models–has legal and financial expertise on site to help close deals.
Varsano, who has completed more than 300 aircraft transactions since 1979, said he opened the store because he believes business aviation could expand its client base–especially in emerging markets–if customers had a more user-friendly way to get acquainted with its offerings. He intends The Jet Business to serve as a one-stop shop where buyers can view an array of options in a neutral environment.
You might wonder why the company opted to start in London, given that the UK economy is hardly in robust health. The answer is that London remains arguably the world's busiest hub for ultra-high-net-worth individuals. Within walking distance of the new store are many massively wealthy expatriates from across the Middle East, Russia and the Commonwealth of Independent States, Asia and Africa.
In addition to engaging directly with business aviation's growing potential customer base through his store, Varsano is working to show aircraft manufacturers how his business could benefit them. "We want to partner with OEMs in a way that they feel comfortable, bringing their clients into our space," he explained, pointing out that the stores could be used to stage promotional events for airframers. In particular, The Jet Business is looking to establish sales representation agreements for the planned Aerion supersonic business jet and the Virgin Galactic space flight program.