““[Bill Gates] has been historically one of my best supporters…One of my favorite e-mails he ever sent me…I proposed this crazy project. And he sent back this two-line response: ‘This has got to be the craziest thing you’ve ever suggested. Please proceed.’” ”
Flight Options’ Owner Buys Flexjet
Directional Aviation Capital—the company headed by that owns Flight Options, Sentient Jet, Nextant Aerospace and Constant Aviation—announced this morning that it is buying fractional provider Flexjet from Bombardier for $185 million. The transaction is expected to close by year-end, pending U.S. government approvals. All Flexjet employees, including president Deanna White, will remain in place.
Flexjet LLC, which is DAC’s shell company for the acquisition, has placed a $1.8 billion firm order for 85 Bombardier business jets—25 Learjet 75s, 30 Learjet 85s, 20 Challenger 350s and 10 Challenger 605s—along with options for 160 more worth another $3.4 billion. According to Ricci, the Learjet 75 order is for a not-yet-announced LXi version, which has a six-seat cabin configuration with a divan. White said the order represents “more additions than replacements” and that Flexjet will be increasing its fleet size.
Ricci told BJT sister publication that Flexjet LLC will operate separately from Flight Options. The former will be a luxury “bespoke” fractional provider flying aircraft that are no more than four years old while the latter will be the “value” fractional with a fleet of mostly preowned or remanufactured jets.
Through its Flexjet, Flight Options and Sentient Jet brands, Directional Aviation Capital will offer private air travelers a full range of choices as to how they fly, including fractional ownership, membership, leasing, jet cards and charter, Ricci said. “Essentially, we’ll have two closed-fleet products—Flexjet and Flight Options—as well as two open-fleet options with Sentient charter and Sentient jet cards.” Combined, these businesses account for more than $1.1 billion in revenues and some 200,000 flight hours per year, he noted.
Looking at the bigger picture, Ricci said the consolidation of the fractional industry was “inevitable,” given that this market segment has matured and there has been excess capacity over the past several years. “This led to CitationAir exiting the fractional market and contributed to the recent downfall of Avantair,” he noted.
Though he admits that some excess capacity remains, Ricci is bullish about the fractional industry in the near and longer terms. In fact, he sees an opportunity in the ultra-long-range, large-cabin fractional market and said it is likely that Flexjet LLC will be announcing a follow-on order for Bombardier Globals by the end of this year. White, meanwhile, noted that “we need to have an international strategy” and that an order for a large-cabin, long-range bizjet to facilitate that strategy could be announced later this year, an apparent reference to the Globals.
In the meantime, Ricci’s focus will be on ensuring the seamless transition of Flexjet from Bombardier to Directional Aviation. “The goal is for Flexjet customers not to even notice that there has been a change in ownership,” he said. “I’m used to buying distressed properties, but Flexjet has been profitable and frankly there’s nothing really to fix. So it’s steady as she goes for now.”