Podcast: Trailblazer—Thomas Flohr Shares VistaJet Milestones, The Future And More

Thomas Flohr, founder and chair of Vista Global, which operates VistaJet and XO, discusses the company's origin story, growth, his best business advice and more.

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Transcript

Molly McMillin:             Welcome to today's BCA Podcast. This one is part of a periodic series called Trailblazers, and as the name suggests, it features those who have made an important difference in the business aviation industry.

                                   I'm Molly McMillin, managing editor for Business Aviation with the Aviation Week Network. I'm delighted to have with me today Thomas Flohr, founder and chairman of VistaJet, a private jet charter provider, and a company he started in 2004. He just flew into Dubai, so we've caught him and we are so happy to have him.

                                   Welcome, Thomas. So we just wanted to start with a very basic question. How did you first get interested in the world of aviation? What was the catalyst? Was it as a child, did you have someone that you watched airplanes as a kid growing up or was it something else?

Thomas Flohr:               Well, no, I had the privilege when I worked in the '90s in the US that our corporation did have a business jet, and occasionally, very rare occasions I was allowed to come along with the CEO. I was intrigued by the business efficiency that a business jet can give to a corporation. Eventually when I left the company end of the '90s, I went out on my own in asset finance.

                                   Then of course when you start as an entrepreneur, you go fly economy and commercially because you want to get your business going. Eventually things started to go very well in my asset finance business. That's when I started looking at buying my first business jet or looking at the different options really that exist from charter to fractional to full aircraft ownership.

Molly McMillin:             So then you launched with three airplanes in 2004, but more with a regional focus. I know you've got a global focus today. I think there were some naysayers along the way, but what made you decide to just go in full bore?

Thomas Flohr:               Yeah, well look, I mean before I bought my first airplane, I analyzed the market and I was deeply unsatisfied with the charter market because you never knew what you would be getting until you arrived at the airport. Neither the exact specification of the aircraft or the actual touch, look, and feel. It's all about experience whilst at the same time the prices you're being charged are, I always say similar to a presidential suite at a five star hotel, but that you have for 24 hours. On a business jet, it's more like a one-hour price tag.

                                   If you think about how brands are going to the absolute maximum extent of making sure you have a perfect experience, I felt it just doesn't exist in the business jet market, especially in the charter market where you would just have a random airplane showing up. I could also not get my head around the business model where if you negotiate with a broker and obviously try to get the price down because one always negotiates, then the only way to make money for a broker is that he would find you the cheapest airplane.

                                   Think about it and pause it right here, do you really want to be on the cheapest airplane? The answer is, I don't, because maybe some operators cut corners on maintenance, on pilot training, or don't go the full fledge of what could be done. Then I looked at fractional.

                                   Having an asset finance background, fractional ownership did not make any sense whatsoever because if you buy a quarter of an airplane, you own a legal instrument, but you don't own an asset. It's completely controlled by the party you buy it from because you cannot sell it to the open market, you have to sell it back. I felt that was a very captive business model.

                                   So out of frustration, as I always say, I bought my first airplane and I made sure that the quality experience would be equal or better than what you would experience in a five-star hotel or in a presidential suite, et cetera, et cetera. That really made me go full into this market because I saw it way underserved. The quality of product was nowhere near the spending that the consumer or the client does.

                                   Thirdly, it was a very US-centric business, but if any business should be a global business, it's business aviation because these planes fly anywhere on the planet and clients need to fly anywhere on the planet. So I had this vision to build a global infrastructure of identically looking airplanes with an identical experience on every single continent. For that you needed obviously density and a network and enough airplanes to cover and actually give you an alternative to full aircraft ownership.

Molly McMillin:             You started out with a focus on the Middle East and Europe and now you're global. What's your biggest market today?

Thomas Flohr:               Today 50% is in North America and 50% in the rest of the world. It's more or less how dollars are being spent in this industry. Yes, we did start in Europe. We expanded into the Middle East, a little bit into Asia. Then the key decision was taken 12 years ago to actually dispose of the small airplanes and instead replace them with global express aircraft.

                                   So I said to myself, well, if it works in a certain region, then why wouldn't it work on a global scale, because at least on a global scale, you have a defined area. On a regional scale, if you start in Europe, you could end up with somebody wanting to fly to Africa, and then you have no customers in Africa.

                                   So I said to myself, well, if you acquire customers all around the globe, then your efficiency is so big that you would, every time a customer requires you to fly to a certain destination, most likely have another client in that next destination who needs your airplane and then fly to his desired location. So that really happened over that long period over the last decade to move it from a regional business to a truly global business. Yeah, we have about a 50/50 between North America and the rest of the world.

Molly McMillin:             So I know it's really grown a lot, especially in the last couple of years. Is that right? What do you attribute to that, the most recent growth? What's been the key to your success there?

Thomas Flohr:               I mean, look, if we take the last five years, if we take these years from 2019 to 2024, it's exactly a 3X. So the company tripled in size, it tripled in financial performance, which is EBITDA. It tripled in fleet size, and I think it's the combination of a market that grows at about double GDP. So if the GDP grows 3%, this market grows about double due to the wealth effect.

                                   More importantly, the real background is that we have been very successful in replacing full aircraft ownership. So an addressable market is 24,000 corporate jets in the world, and very often these airplanes are only flying 250, 300 hours per year. The efficiency of our business model is we just charge for the hours that a company needs.

                                   So if a company needs 250 hours, you just sign a simple three-year program agreement, it's a subscription agreement, and you have access to the entire fleet on every continent. Equally importantly is you choose the airplane which is right for your mission. So if you have a flight from let's say New York to Florida, a Challenger is perfectly fine, transcontinental airplane.

                                   Then if you need to go from Florida to let's say Italy, you take a Global Express. If you buy an airplane, well you buy one of the two, the Global might be too big for that three-hour hop, but it gets you nonstop to Italy. If you buy a Challenger, it's perfect for that three-hour flight, but then you need to stop.

                                   So access to a total fleet for the always right airplane for the mission is another efficiency factor. So on a purely financial basis, we're approaching usually the CFO of a corporation, we're showing them what their aircraft costs them by a full ownership versus our subscription model. In most of the cases, we're significantly less expensive whilst we're offering 365 days guaranteed availability.

                                   That's an important point here because if you own an airplane, we own more than 250 of those, they're only available about 300 days a year. The rest is down for maintenance, pilot training, and what have you. 365 days of guaranteed availability every day of the year, that's a huge driver, other than the cost advantage.

Molly McMillin:             Has the typical customer changed along the way? I was just thinking too, how does wanting privacy figure into why a customer turns to a service such as yours?

Thomas Flohr:               Yeah, Molly, I think it's an excellent question. I think more and more corporations don't necessarily want to be seen with their tail number. It's all trackable in today's world that you know exactly where that executive might fly to. Maybe they're involved in an M and A transaction, maybe they're involved in a sensitive client meeting, government meeting, et cetera.

                                   Being trackable with your own tail number, this is what some of the competitors or these plane spotters are doing. So if you subscribe with us, you're on an anonymous tail, you don't know the passenger list. You exactly have the opposite effect of total privacy that doesn't disclose where you're actually traveling to.

Molly McMillin:             You start in 2025 with a $1.3 billion in investment into your company. That's quite a ways to start a new year. So tell us what the future holds and what your plans are.

Thomas Flohr:               Well look, we always focus on our rolling five-year plan. So we are approaching the second half of this decade. I think the client experience is at the forefront of what we do. So this investment will continuously help us with the client experience upgrade. This is from maybe deploying Starlink or on top of some of the high-level KU band that we have today, to other client experience matters. It'll also contribute to our deleveraging as a company.

                                   So the overall award chest that we have as a company post this investment allows us to laser focus on sizing opportunities that exist in this business. We'll be focusing on those on basically every single continent to continue to take market share from what we continue to see as a huge white map of these 24,000 corporate aircraft and turn them more and more into a subscription model, which we continue to believe is more attractive.

Molly McMillin:             What would you say the biggest challenge is for you today?

Thomas Flohr:               Well, I mean certainly over the last couple of years we have seen some geopolitical conflicts around the world that have influenced the global air travel significantly. I think that is something that we obviously monitor daily, hourly to make sure that we are in outside any conflict zone with our overflight permits, et cetera. I think that I would see today continues to be a significant challenge.

                                   I believe what we've seen lately with the tariffs is really not affecting us at all because we're a service industry. If anything, I think there's a certain concern right now for corporations buying an airplane because you don't know what the ultimate cost will be. Manufacturers are obviously looking at that very, very deeply, but we're certainly not affected by any of the tariffs.

Molly McMillin:             What about your sustainability goals? I saw written somewhere that your goal is net-zero emissions. Is that this year or?

Thomas Flohr:               That we have achieved, we're writing 2025. This is the year where we can tick this box. It's the green box tick. That was a massive investment that we made and continue to make in order to live up to this promise. It was a heavy lift, but it's something that we are committed to.

                                   We have also communicated this intensely with our client base. They're making a fair contribution to it as well. I think it's an educational process. Our teams are educated towards that. I think it's a wonderful thing that we're doing, having this active dialogue around this important subject.

Molly McMillin:             So let me ask you a question, and this may be equal to choosing among your most favorite children, but what's your favorite airplane? Do you have one?

Thomas Flohr:               That's a difficult question. I give you two answers. What Bombardier pulled off with a Global 7,500, soon 8,000 is wonderful. This is just absolutely industry leading. About four to five years ahead of any competition. We were the launch customer. I placed the order in November 2012. It was first called Global 7,000. There was more range in the airplane, and we continued to have either speed records or range records with the airplane and soon to be upgradeable to 8,000.

                                   What Bombardier with this airplane, and Vista, of course at the same time is able to do is that we can keep this entire cabin of that 7,500 on the 8,000, whereas there's other manufacturers have to shrink the cabin to get that extra range. That's just counterintuitive. The longer you fly, the more space you want to have. So why would you shrink it? So that's certainly a absolute favorite.

                                   In the day-to-day usage, I am in love with the Challenger 350 or 3,500 today. You get a good six, seven hours range. I came into Dubai today with that Challenger aircraft and it's incredibly versatile and just right for the mission.

Molly McMillin:             How many hours do you fly personally? It sounds like you're doing a lot.

Thomas Flohr:               Well, I used to fly a lot more. I would say probably today the right number is somewhere between 300 and 400 hours per year.

Molly McMillin:             So what advice would you give to your younger self just starting out in business? For that matter, what advice would you give to other business people in today's world? What's your biggest advice?

Thomas Flohr:               Well, what I would say is trust your guts and trust your instincts. I think if you do have a business sense, then what you want to do is that you have to analyze a certain market that you might believe in. You need to find that right balance between deep analysis numbers and sizing the opportunity. Ultimately, it's what you sense and what the deep inside guts is telling you of what you should do.

                                   I think I should sometimes have trusted my guts earlier in my life. I think that is later on when you look back five or 10 years when you trusted your guts, I always took the right decision. When I doubted about a certain aspect, and it's sometimes when I took the wrong decisions and the guts told me something different. So if you're really, really true and truthful to yourself and you have a clear idea backed up by numbers, then you should go for it.

                                   At the same time, I want to add one thing. Remember, you always have to be a good person, along a very long journey. That brings us maybe to one of my hobbies, which is endurance racing. You got to make sure that you have the endurance stamina to do something over 10, 20, 30 years, and you will come out well at the other end.

                                   There are no shortcuts in life. I think that's the other message. If you think you see a quick trading opportunity, you will not build a business. You have to stand in there over the very long term and be focused and execute and work hard.

Molly McMillin:             You mentioned endurance training. Can you talk a little bit about that?

Thomas Flohr:               Well, I'm racing the FIA, which is the Fédération Internationale de l'Automobile, which is regulating Formula One. They also have a second world championship other than F1, which is called WEC, World Endurance Championship. I'm racing for the Ferrari team. It's a championship with eight races a year.

                                   You got to be physically very, very fit to participate. It's a great challenge physically and mentally from a focus point of view. It's a great hobby to do. It really makes sure that you're very, very focused.

Molly McMillin:             So one last question. What's one thing that most people may not know about you?

Thomas Flohr:               A very difficult question. I don't know what other people don't know about me, but if I were to speculate on that is probably the focus and determination that I'm having. It sometimes looks easy to be the founder and chairman of a large company that's actually quite an attractive business. People look at business aviation as an attractive business. It's a lot of very, very focused execution every single day of the year, caring about your clients, that is getting you to where ultimately you are in a successful environment.

Molly McMillin:             Well, it looks like we're out of time. Thomas, thank you so much for joining us today and sharing your insights. Thank you all for listening. Don't miss the next episode by subscribing to the BCA Podcast wherever you listen to them. One last request, if you'd like to support us, please leave us a star rating or write a review.