Heating Up The Digital Battle, Vista Global Is Buying Private Jets For The Masses App JetSmarter by Forbes – Entrepreneurs

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Vista Global said it has agreed to acquire JetSmarter, a Florida-based company that raced to fame by offering unlimited by the seat flights on private jets for members who in some cases were paying less than $10,000 per year. For the Dubai-based owner of VistaJet and XOJET, the move brings into its fold the upstart’s industry-leading technology platform.

Thomas Flohr, founder and chairman of Vista Global, said once the deal closes it will bring into the group technology that was previously outsourced and will increase the ease of booking for VistaJet’s global customer base, widening its access into the $11 billion on-demand private charter market.

Forbes’ billionaire Thomas Flohr has followed his acquisition of XOJET with a deal to acquire jet-sharing membership club JetSmarter.

Vista Global

Backed by Jay-Z and Saudi royals, as recently as two years ago JetSmarter was claiming a billion dollar valuation. However, it is currently facing at least a dozen lawsuits from unhappy customers as it moved to a model where seats can cost into the thousands of dollars per flight. It is trying to settle a class-action arbitration claim with a hearing to approve a proposed deal set for June 4.

As part of the Vista Global transaction, all JetSmarter investors, inclusive of Clearlake Capital and Jefferies Financial Group, will become investors in Vista Global. Flohr declined to discuss financial terms and if any cash was involved, but described the deal as primarily an equity swap. He is currently ranked #1070 on the Forbes rich list with an estimated net worth of $2.3 billion.

JetSmarter’s digital technology provides Vista Global’s VistaJet increased online distribution in the $11 billion private jet charter market.

Vista Global

Speaking from Dubai, Flohr said, “At Vista Global safety, integrity and reputation are the absolute priority.” He said plans are to continue JetSmarter’s current product lines, which includes crowdsourcing private jet flights, essentially selling flights by the seat. However, flights only actually operate once enough people buy seats on the proposed departure. “Like any business, it works in some markets, and doesn’t work in others,” he said.

JetSmarter also has an on-demand digital brokerage selling charters both via dynamic pricing and a fixed rate per cabin category size. At its peak, sales were thought to be around $250 million with some high-end customers who were spending over $100,000 per year on full aircraft charters.

Flohr said the deal sprouted from his acquisition last year of California-based XOJET, which has a longstanding relationship with JetSmarter marketing its empty legs and providing digital charter sales on its fleet of 43 Bombardier Challenger 300 and Cessna Citation X super midsize private jets. Flohr said the technology and distribution from JetSmarter’s app, which has had over two million downloads, can be used to drive bookings on VistaJet’s fleet of over 70 super midsize, large cabin and long-range private jets.

“While JetSmarter was primarily North America, a digital platform is global. We have offices in Hong Kong, London and Dubai, and a lot of data about charter pricing globally,” he said.

The move further sets up a global battle between Berkshire Hathway’s NetJets, Directional Aviation, which owns Flexjet, second to NetJets in the fractional share and lease market, and Sentient Jet, a leader in jet cards. Last year it snapped up U.K.-based digital charter broker PrivateFly and just this week merged its own brokerage, Skyjet into the acquired brand.

Wheels Up, another key player in the U.S. market, which owns a fleet of approximately 100 King Air 350i turboprops and Cessna light and super-midsize jets, recently announced it had hired Goldman Sachs and Bank of America to explore strategic options. Its founder Kenny Dichter has said a major focus in the future will be the digital side of its business. He also founded jet card broker Marquis Jet Partners before selling it to NetJets in 2010.

Flohr said VistaJet and XOJET will continue their models of offering customers asset light solutions via jet card programs and on-demand charter. Fractional and lease programs like NetJets and Flexjet typically require terms of up to 60 months, although Flexjet has begun offering a number of hybrid programs that bridge the gap between on-demand charter, jet cards and the fractionals.

For Vista Global, the JetSmarter acquisition will give it more juice the world of Google, where organic and paid search is thought to be the Rodeo Drive of the future for private aviation. For the next wave of UHNW consumers who are more tech-focused, being able to easily book their private jet flights from their smartphone is thought to be critical for future growth the thinking goes.

Upstart digital private jet booking app JetSmarter will help Vista Global challenge NetJets on Google’s digital Main Street.

Doug Gollan

At the same time, private aviation companies like VistaJet and XOJET have been stepping up the human touch side of the business. XOJET reorganized its sales team to provide dedicated account managers and has been expanding its luxury partnerships, while in the past year VistaJet has launched programming to appeal to children and pets flying on its private jets, as well as offering specialized fine dining and wine programs.

According to the announcement, the JetSmarter deal will close before July. Flohr said the company will continue to operate from its Ft. Lauderdale base. NetJets continues as the worldwide leader with a fleet of over 700 private jets split between the U.S. and Europe, as well as its management arm, Executive Jet Management, however, it is yet to offer an online booking app or portal.

April 10, 2019 at 09:14AM
Forbes – Entrepreneurs