Even in a digital age, face-to-face meetings remain a staple of doing business. However, getting to and from those meetings, which are often across the country or around the world, presents an obstacle for most companies because of the steep cost of private jet ownership. With VistaJet, Thomas Flohr has created a more cost-efficient way for firms to maintain personal contact with even the most distant clients.
Flohr’s vision has put VistaJet at the forefront of the subscription-based model for private fliers. Like all successful enterprises, VistaJet thrives because it offers a service that fills a need and makes good economic sense.
The Vista Members’ fleet consists of over 300 aircraft that have traveled to 1,900 airports in 96% of the world’s countries. The iconic silver and red planes come in a variety of sizes and styles, so that clients enjoy the best aircraft for their mission. VistaJet’s, which Flohr founded in 2004, Program membership offers a bespoke number of flying hours to clients based on the amount of time they expect to fly. They then have guaranteed access to jets when they need them without the steep costs of ownership and maintenance.
In addition to the reduced cost, Thomas Flohr says part of VistaJet’s appeal is that he keeps contracts with clients straightforward. It’s an approach the Swiss-born businessman learned to value during his career, which started in asset finance before he decided to form a global business aircraft company.
“How we offer it is in a very simple way. We offer a subscription business model where you only buy the hours you need on a three-year contract,” Thomas Flohr told CNBC. “It has been hugely successful and hugely popular around the world. And it’s a simple three-to-five-page contract which says you have an obligation to pay and we have an obligation to fly.
“And it’s guaranteed availability, anywhere, anytime. Whether you’re in Japan, in Southeast Asia, in the Middle East, in America, South America — you have guaranteed availability around the globe.”
He also offered a succinct way to think of VistaJet. “We happen to fly airplanes, but it’s a subscription business model,” Thomas Flohr said to CNBC. “Think about Vista as a subscription, luxury business model.”
What Thomas Flohr and VistaJet Offer Makes Good Business Sense for Clients
The costs of jet ownership are substantial. They also impact multiple areas of a company’s budget. The first is capital expense, as the upfront costs of purchasing a plane can range from $2 million to more than $100 million depending on the aircraft’s size, model, and features. Just the initial price tag alone is a barrier for many businesses.
Then there are operational costs, which include fuel, maintenance, insurance, crew salaries, and hangar fees. Fuel costs are hard to predict because aviation fuel prices fluctuate. However, Elite Traveler estimates that for a company that uses a large cabin business jet for 300 flight hours a year, fuel costs could reach up to $1,000 per hour or $300,000 per year. They also note hangar fees hover around $3,000 per month.
Private jet owners also must commit time and resources to adhere to government regulations in areas such as safety standards, airspace regulations, and maintenance guidelines.
Taking everything into account, Investopedia writes, “As a rule of thumb, you can expect to pay around $500,000 to $1 million annually in operating costs.” Businesses also must add depreciation in the jet’s value to the financial calculations.
Thomas Flohr said he developed the model for VistaJet while still working in asset finance and learning about the costs of partial or full ownership of a private jet. He observed that it makes even less sense for companies that only use private jets around 250 hours per year, which he says is the typical level.
“I believe that corporations should invest their equity in building their core businesses,” Flohr told McKinsey & Company. “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.”
He added, “We don’t think corporations should invest in their own aircraft because we have proven we can do it for them at a price point that can be less than half the price of owning a jet.”
How the VistaJet Subscription-Based Model Works
VistaJet offers its flagship Program membership for those flying 50 hours or more oer year, in addiiton to VJ25 and a tailored Corporate membership for organizations. All are investment-free and feature exclusive benefits available only to Members, including onboard service provided by cabin hosts trained at the British Butler Institute, Norland College, MedAire, and Wine & Spirit Education Trust. All memberships are customized to suit the individual’s flying needs, including requesting a specific aircraft type.
The Program membership is intended for those who expect to fly 50-plus hours a year. They have guaranteed flights at all times, as well as access to all the amenities VistaJet offers. This is the original, bespoke program that provides the asset free option to businesses with transparent hourly rates.
The VJ25 membership is designed for those who expect to fly 25 to 49 hours for business travel per year. This “high quality, low frequency” travel option offers guaranteed flight availability on off-peak days, as well as most peak days. Members at this level have access to many of the amenities VistaJet offers, including private dining, Wi-Fi, and flexible cancellation terms.
The Corporate membership presents an unlimited number of flight hours and guaranteed access at all times to a global fleet of jets. This membership also allows for booking two flights at the same time, increased flexibility in departure times, and a variety of payment options.
Thomas Flohr said all VistaJet memberships offer a viable alternative to jet ownership — even fractional ownership. As Flohr pointed out to McKinsey & Company, fractional ownership — where a business enters an agreement with others to buy a plane, much in the way a timeshare works — requires a company to sign a share purchase agreement, management agreement, and operating agreement.
He noted that a subscription-based model gives firms more flexibility. As Flohr explained to McKinsey, “When corporations buy an aircraft, they’re generally looking at a minimum of a five-year horizon. We offer a three-year horizon, and then you can either renew or exit the contract, which provides more flexibility.”
Thomas Flohr added that with all the benefits that a subscription-based model offers business clients, his goals are high for VistaJet, saying, “It’s my determination to convert as many corporate jets as possible to a subscription model.”
