When Thomas Flohr became a Bombardier business jet customer, he wasn’t taken seriously by the Montreal aerospace giant. Blame his appearance: Long, straggly hair, blue jeans and T-shirt, as if he were a Silicon Valley smartass pitching a startup. On the first few planes he bought from Bombardier, the company balked at designing the cabin the way he wanted it.
Today, almost a decade later, Bombardier Inc. worships Mr. Flohr and will do anything to keep their man happy. If he wants his sleek planes lined with the finest Italian wood trim and leather stitching, he gets it. That’s because he is now Bombardier’s biggest customer for business jets, an aviation mogul who keeps the production line buzzing even as the new C-Series passenger plane struggles to find buyers.
“In the early days, I wanted a consistent design. Bombardier didn’t listen much to me,” he says. “They said: ‘This guy’s got only three airplanes. He’s got this [design] obsession.’ Obviously today, as their largest client, they understand what I want.”
Mr. Flohr, 50ish (he declines to give his age), is the founder, chairman and 100 per cent owner of VistaJet, the operator of a global fleet of private jets that is emerging as a rival to Warren Buffett’s NetJets, although one with an entirely different business model.
By the end of 2013, VistaJet had 41 of Bombardier’s biggest and most expensive business jets – Globals and Challengers – in operation and the fleet is expanding by about 25 per cent a year. Its push into the United States, which was the big hole in its global market, should keep the growth momentum intact, at the risk of putting VistaJet in direct competition with NetJets.
Mr. Flohr collects modern art and his two passions are merging. A partnership with the graffiti artist Retna (real name Marquis Lewis), whose art is inspired by Egyptian hieroglyphics and the Arabic and Hebrew alphabets, was dreamed up by Mr. Flohr’s daughter, Nina, who was once in charge of VistaJet’s marketing and branding. The result was a jet whose tailfin was splashed with a bold Retna design. Two other VistaJets feature works by British abstract painter Ian Davenport and American “Shadowman” artist Richard Hambleton, who is known as the “godfather of street art.”
Clever stunt: The decorated planes become minor runway celebrities wherever they land.
Mr. Flohr has expensive taste in food, too, and describes Italian cooking as his preferred relaxation therapy. But he is not taking me to an Italian restaurant in ultra-posh Mayfair, the London ’hood where VistaJet has an office that doubles as his private art gallery. We’re off to Nobu, the fantastically expensive Japanese restaurant that was co-founded by Robert De Niro and whose celebrity chef, Nobusan Matsuhisa, is a friend of Mr. Flohr. A bottle of water alone costs £6, or more than $10. It turns out that Nobu is one of VistaJet’s caterers.
Nobu is just off Berkeley Square and is packed with wealthy patrons, although the place has a casual, buzzy feel about it. Mr. Flohr doesn’t like small restaurant tables, so he had booked a table for four even though we were only three.
His marketing and publicity vice-president, Danielle Boudreau, who was snatched from Bombardier, joins us and she and I agree that Mr. Flohr, as a regular, should do the ordering. Barely consulting the menu, he calls for yellow tail tuna, Nova Scotia salmon, spicy seafood soup, black cod, toban yaki beef and sea bass shiso, all delicate and delicious.
He asks for a small bowl of deadly hot jalapeno green peppers and soaks them in soy sauce. I try one and my tongue nearly melts.
Mr. Flohr made headlines around the world when, on Nov. 26, 2012, he signed a hangar-busting, firm order for 56 Bombardier jets with a list price of $3-billion (U.S.). (As a big customer, VistaJet would have received a substantial discount). The order included 86 options valued at $5-billion, taking the total potential order to $8-billion.
“Pierre was over the moon,” he says, referring to Bombardier CEO Pierre Beaudoin, who feared that VistaJet would go with rival Gulfstream, which almost happened.
VistaJet flies only Bombardiers and only the biggies favoured by the millionaires and billionaires with transcontinental and intercontinental travel needs. The sweetest bit of hardware in his fleet is the Global 6000, which can fly 15 passengers non-stop for 11,000 kilometres, can sleep seven, two of them on a queen-sized bed, and comes with Wi-Fi, two lavatories and a cabin hostess so you don’t have to schlep three or four metres to the champagne cooler. The price in the United States (the only market where pricing is publicly disclosed) is $15,950 per “occupied” hour, meaning the meter is off while you’re waiting for a takeoff slot.
The son of a teacher, Mr. Flohr was born in Switzerland, had a “very humble upbringing,” studied political science at Ludwig-Maximilian University in Munich and went into the finance business.
Along the way, he married, and later divorced, Katharina Flohr, who would become the creative director of Fabergé and editor of Russian Vogue. He landed at Comdisco, a Chicago finance company that catastrophically strayed into tech investments and became one of the more spectacular casualties of the dot-com bust of 2000.
Mr. Flohr, who had cleverly left the company the year before, snapped up most of Comdisco’s European asset-finance arm during the bankruptcy proceedings.
To get around Europe, he chartered aircraft and found it bad value for money. The planes came in all sizes and conditions and would sometimes get yanked from service at the last minute if their owners suddenly needed them. “I was so unhappy with the quality of the charter business that I decided to go out and buy my first plane,” he says.
His first purchase, from Bombardier in late 2003, was a second-hand LearJet, the smallest product in the Montreal-based company’s biz-jet fleet. He had it painted silver, accented by a thin red stripe along the entire length of the fuselage. Except for the addition of artwork on some of the tail fins, the design has not changed.
But it wasn’t design so much that set VistaJets apart. It was the company’s business model.
At that time, there were two ways to book a private aircraft. You chartered one from an owner or you went to NetJets, the pioneer in the “fractional” ownership industry, in which, typically, four investors would split the cost of a plane and divvy up the flying hours. The owners had to finance the purchase, take on the asset risk and still pay the maintenance and operating costs. In exchange, they would get guaranteed availability.
Mr. Flohr’s plan was a go-anywhere any-time fleet of big jets that he would own and rent, with all the costs rolled into the hourly price. He would buy only new jets and sell them after four or five years, while their residual values were still fairly high and their warranties intact. He estimates that the biggest jets retain as much as 70 per cent of their value after that much use. “The most significant downside of fractional ownership is that there is no market to sell your fraction other than who you bought it from,” he says.
He would also have enough bases around the world to avoid a lot of profit-killing empty return flights.
The concept took off, although there were scary moments. In the 2008-2009 financial crisis, he was terrified that the banks that financed his jet purchases would collapse. “The instability of the system was extreme,” he says. “I had a European bank and the bank almost went under. They held the mortgages on my planes. If they had taken my planes – boom! – where’s my equity?”
Since VistaJet is private, it does not make its financial statements public. But Mr. Flohr says it pumps out “strong” cash flow and operating profit. Revenue rose even during the financial crisis, although he had to drop the rental prices to keep customers.
Certainly, he doesn’t give the impression that he’s struggling. He sponsors his daughter, who is working on a real estate project in Madagascar and is famous for hosting lavish parties. Her 18th birthday was an historical extravaganza, held in St. Petersburg, Russia, that WSJ Magazine called a “Hollywood-worthy production.” It featured 300 guests and the actors came dressed as Bolshevik peasants, Soviet soldiers and imperial Russian royalty.
Mr. Flohr himself races cars and has twice put himself and an old Porsche 911 RS through the 4,500-kilometre East African Safari Rally. In the 2011 edition, a flash flood swamped the car, putting him out of contention. He now pilots GT3 cars in world circuit races.
His modern art collection is superb, is biased toward street art and includes pieces by Jeff Koons, Keith Haring and Sterling Ruby. The London gallery can be seen “by appointment only,” he says.
But it is Bombardier business jets that he is most interested in collecting and he gives no hint that, a decade after VistaJet’s launch, he’s ready to slow down or sell out.
Bombardier could not be happier. “I am the biggest Bombardier customer in the world,” he says. “And the Global is the best product in the industry.”
Personal: Father of Nina Flohr, 26, trained in marketing and branding. “I was a single dad. raised her.”
Favourite pastimes: Playing squash and cooking. “I love to cook Italian food. It’s the only thing that destresses me.”
Favourite author: Hermann Hesse (author of Steppenwolf)
Favourite food: Italian
Favourite drinks: “A great glass of red wine and mojitos.”
Favourite holiday destination: Anywhere in Africa, especially Kenya.
Modern artists collected: Keith Haring, Richard Hambleton, Retna, Ian Davenport
Car used in East Africa rallies: Classic 1976 Porsche 911, without a turbo engine or four-wheel drive
IN HIS OWN WORDS
What he wants to be when he grows up: “The same young man I am today.”