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Stacy Meichtry has a fascinating report over at The Wall Street Journal about Thomas Flohr, the German-born private jet magnate who has managed to fashion his own unique brand of luxury jets, VistaJet, despite the stress of the 2008 financial crisis.Here’s what Flohr is doing differently that’s making his company such a success in a market that includes competitors like Warren Buffett:
- He charges hourly rates–a flight between London and Moscow could cost 40,000 euros. Buffett’s company, NetJets, employs a fractional jet ownership strategy where travellers are required to own stakes in the planes they use. For VistaJet, Flohr told Meichtry, more travellers are trading down to avoid the risk of investment.
- He targets Russian oligarchs, Chinese entrepreneurs, and Middle Eastern oil tycoons less affected by the Western economic slump.
- He buys his own lavish Bombardier jets, unlike competitors that operate planes owned by other companies. It’s riskier, but it means he has complete control over the whole operation.
- He keeps maintenance costs down by selling the jets before their warranties have expired.
- He’s turned his jets into a proper brand with a sophisticated image by working closely with his 25-year-old daughter, Nina Flohr, whose mother is the creative director of Fabergé and a former editor of “Russian Vogue” (her parents are divorced). As the brand manager, Nina’s revamped the jet company’s image, most importantly by having each jet’s tailfin painted with graffiti.
Meichtry noted that Flohr won’t provide detailed numbers, but he did tell Meichtry that VistaJet’s revenue rose 25 per cent, to 300 million euros, last year.