Thomas Flohr and VistaJet: A Competitive Edge in the Private Aviation Industry

Owning or maintaining a private jet once served as a sign of business success. However, it’s an investment that comes with financial burdens, including the high costs of purchasing, maintaining, and repairing an aircraft. VistaJet founder Thomas Flohr has provided clients with a more innovative way to have the access they need to private jet travel without the hassles of ownership.

VistaJet offers corporate clients a subscription model, giving them business jet services only for the time they actually need the aircraft. VistaJet customers avoid the need to own an aircraft, or a fraction of it, that’s required by competitors such as Netjets or Flexjet.

“I believe that corporations should invest their equity in building their core businesses,” Thomas Flohr told McKinsey & Co. “At the end of the day, an aviation service is a service you can easily outsource. Why would you have your equity stuck in something that is not your core business? So, I believe in subscription models.”

The Traditional Private Jet Model

Historically, there have been two primary ways to gain access to private jets: full ownership and fractional ownership. Full ownership, though offering complete control and exclusivity, comes with immense financial responsibilities, both in terms of acquisition and ongoing maintenance. Those costs can vary widely, with the purchase price of a private jet ranging from $2 million to $100 million, according to Investopedia.

The logistics of scheduling, managing crew, and adhering to regulatory requirements further complicate the process and mean the aircraft won’t necessarily be available when required. Fractional ownership, where clients purchase a share of a jet, offers a more affordable alternative in terms of capital investment, but even this option carries a considerable price tag and steep asset depreciation.

Both models require significant financial commitments and operational complexities that detract from the convenience and luxury private aviation is supposed to provide. This is where Thomas Flohr’s vision for VistaJet offers a disruptive solution.

How the VistaJet Subscription Service Works

Thomas Flohr created VistaJet in 2004 in response to his frustration with finding a company that offered dependable private jet service. “There were no global brands I felt I could trust, which seemed remarkable for an industry that sells to the wealthiest and most influential people on the planet,” Flohr told McKinsey & Co.

VistaJet quickly became an iconic brand in the private jet industry, with clients including celebrity passengers such as George Clooney, Beyoncé, and David Beckham. Its distinctive silver-and-red planes have flown to 2,700 airports in 96% of the world’s countries. The fleet includes the Bombardier Global 7500, the world’s largest and longest-range business jet.

Part of VistaJet’s appeal to businesses is the straightforward approach. Clients sign a three-year contract and only buy the hours they need by becoming a member at the Program, VJ25, or Corporate level. The entire deal is handled in a three-to-five-page contract. In return, firms can request jets when and where they need them. With a global fleet, VistaJet can quickly respond: Availability is guaranteed in North America, South America, the Middle East, Southeast Asia, Europe, and other locations around the world.

“We happen to fly airplanes, but it’s a subscription business model. Think about Vista as a subscription, luxury business model,” Thomas Flohr said in an interview with CNBC.

The Downsides of Fractional Ownership

Thomas Flohr has established a competitive advantage through use of the subscription model, as opposed to offering clients fractional ownership of aircraft, a method used by many competitors.

Fractional jet ownership comes with a number of disadvantages. One significant drawback is the high outlay associated with fractional ownership. Buyers typically purchase a share of an aircraft, a cost that can run into the millions. The value of the plane also depreciates over time.

Fractional owners are also responsible for ongoing expenses like monthly management fees, maintenance fees, and variable flight costs based on use. These fees add up quickly, resulting in significant and unexpected expenses, especially for those who don’t fly frequently enough to justify the bottom line.

Another downside is the limited choice of aircraft. Fractional ownership agreements typically involve the purchase of a specific aircraft that the company offers, which doesn’t provide the freedom to choose from multiple types of aircraft that come with the subscription model.

Shared availability with other owners is another significant disadvantage. Unlike the advantage of on-demand chartering, fractional ownership sometimes requires staying with a preset schedule. Even if a company offers another aircraft, that can result in extra fees or longer wait times.

VistaJet Offers Financial Flexibility and Cost Advantages

One of the most significant advantages of VistaJet’s model is the flexibility it offers. Its VJ25 membership level is designed for those who expect to fly 25 to 50 hours per year. This option provides guaranteed flight availability on nonpeak days as well as most peak days. Clients can access many amenities, such as private dining, Wi-Fi, and flexible cancellation terms.

The program level is designed for those who expect to fly 50-plus hours a year. It includes guaranteed flights at all times, as well as access to VistaJet amenities.

The most comprehensive service level, Corporate, offers an unlimited number of flight hours and guaranteed access at all times. Corporate members also can book two flights at the same time, have increased flexibility in departure times, and have a variety of payment options.

All three memberships include onboard service provided by staff trained at the British Butler Institute, Norland College, and Wine & Spirit Education Trust. VistaJet also offers clients the option to customize their membership, including requesting a specific aircraft.

Ultimately, VistaJet puts an emphasis on the expression of luxury in flight. Flohr told French fashion magazine L’Officiel that upscale services offer peace of mind.

“Luxury is being surrounded by products or providers that allow you to focus on what is important for you,” he said. “That’s why learning about our clients is so important, and giving them that comfort of a continuation of their lifestyle: It creates time and energy for them to focus on what is important.”

Flohr told McKinsey & Co. he’s willing to take any phone call or meeting to discuss the benefits of a subscription service over fractional ownership. “Instead of owning a plane,” he said, “it is much more effective to simply have a subscription that gives you access to the right aircraft for that mission, anywhere on the planet.”

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