00:00:00 · Israel Slodowitz, Molly O'Shea
[00:00:00] S0: Not flying blind. My name is Israel Slotowicz. I'm the founder and CEO of Kraft. OpenAI just announced that they're going to be public. We're seeing, like, not just insane wealth creation moment, probably the largest we've seen in the history of humankind, but we're also seeing shift in how people spend their wealth. The most sought after thing once you make some money is start flying private. It's like the one thing everybody looks to do. It's a truly unique tool that nothing else replaces. [00:00:25] S1: What does, like, a Jeff Bezos have? What does Elon Musk [00:00:28] S0: Musk have? Have? So when you think about, like, the Jeff Bezos of the world and Larry Page and Sergey Brin, they're typically g 700 global 8,000 category. That's, like, the top of the line. If you buy a $10,000,000 airplane, you could take a $10,000,000 business deduction the year you bought the plane. [00:00:43] S1: This is why people are buying $75,000,000 airplanes. [00:00:46] S0: That's exactly what people are like. There's no other good reason. [00:00:58] S1: Izzy, welcome to Sorcery. [00:01:00] S0: Good to be here. Thank you. [00:01:01] S1: What are we doing right now? Where are we?
00:01:01 · Molly O'Shea, Israel Slodowitz
[00:01:01] S1: What are we doing right now? Where are we? [00:01:03] S0: We're sitting on a Challenger three fifty. This is a super midaircraft that can fly coast to coast, New York to California. You can fly California to Hawaii or to Europe. This is one of the aircraft that we operate in our charter company. I operate a part 135 charter company that I started six years ago while I was still in college. We now operate a fleet of these. We have pilots and we fly them all year round. We do a lot of supplemental flights for NetJets and Flexjet and Wheels Up and all the large providers. And I'm excited to talk to you about what we're building and about the industry.
00:01:39 · Molly O'Shea
[00:01:39] S1: I'm excited. I came across you guys through LinkedIn and these posts. You were doing some collaborative posts with some of the interviews that we've done. I did this amazing series with Michelle Del Buono of a sixteen z perennial, which is Mark and Ben's multifamily office. We did two episodes so far, and it's all centered on the major wealth creation event that's happening right now. We're about to have more millionaires and billionaires minted than ever before with the OpenAI, SpaceX IPO, Anthropic IPO, the Cerebrisk one that just happened, and all the secondaries and tenders that are going on also behind the surface. But right now, we're in this crazy period of time where a lot of people are gonna be making a lot of money. And so with these conversations, I've been trying to get down to, okay, what do you do once you have that wealth? How do you manage it? And one of the topics in the conversation on wealth management is private aviation. So I'm really excited for to talk about this today, and I'm just really curious. So are we seeing more private jets? What's the state of the market? Yeah. I mean, so it's like you said, it's absolutely insane what's going on right now. We're sitting here on a Sunday. SpaceX is supposed to IPO this Thursday. So some of our clients and a
00:03:00 · Israel Slodowitz, Molly O'Shea
[00:03:00] S0: lot of our investors are gonna be in New York for this iconic IPO. It's probably the largest IPO by twice as much as the last one. And this is just the first of many, right? OpenAI just announced that they're going to be going public. And we're seeing like not just insane wealth creation moment, probably the largest we've seen in the history of humankind. But we're also seeing a shift in how people spend their wealth and their priorities and also the type of wealth that they are generating. It's not the same wealth that was generated historically, where people kind of built a business over many, many years and they slowly diversified. [00:03:43] S1: New money. This is just like completely [00:03:44] S0: new money. So there's like this massive tsunami that's hitting, and we're seeing it in our business. We're seeing it in the preferences of what people are choosing, how they're accessing private aviation. And of course, the most sought after thing once you make some money is to start flying private. It's like the one thing everybody looks to do. It's truly a unique tool that nothing else replaces. [00:04:09] S1: So how is that changing who's buying jets versus who's chartering them? What is the difference?
00:04:09 · Molly O'Shea, Israel Slodowitz
[00:04:09] S1: So how is that changing who's buying jets versus who's chartering them? What is the difference? [00:04:14] S0: First of all, we're seeing people entering the market buying bigger airplanes. So this airplane, for example, this is a Challenger three fifty. It's considered a super mid. It's considered what I like to call a proper jet. It has a flat floor. Normally, people would sort of enter the market by starting to charter or they would start with getting a light jet. And people are now going straight for the super mid, straight for the heavy. They're going straight towards buying or even chartering the latest and greatest. So we're seeing this big sort of skipping of steps that we are accustomed to in our industry. The other thing that I'll say about our industry is, you know, if there's almost 8,000,000,000 people in the world, if point 0001% of them are flying private today and that doubles, which I think it's going to more than double, to point zero zero zero two, that has like a huge cataclysmic effect on our industry. Why? What do you mean? So our industry is just not really built for the manufacturers, the OEMs, the supply chain, engines, parts, the speed at which these factories are able to build airplanes, the speed at which you can train pilots. [00:05:25] S1: Are we gonna have a shortage
00:05:25 · Molly O'Shea, Israel Slodowitz
[00:05:25] S1: Are we gonna have a shortage [00:05:26] S0: of There's gonna be a huge shortage. I mean, these are obviously depreciating assets. These airplanes you know, airplanes are equipment. They don't go up in value normally, but we're seeing them go up in value for the first time almost ever, especially in the higher end of the market. So that small little change in wealth, which I think is actually huge, is something this industry is not at all ready for. And and and I think we're gonna there's gonna be a lot of adjustment and price fluctuation and uncertainty until until, like, the the new the new wave sort of takes effect. [00:05:59] S1: I guess to give more of, like, the one zero one behind all the sizes and pricings and that kind of thing, could you walk through you mentioned it before, but, like, can you walk through all the sizes and then up to, like, okay. What does, like, a Jeff Bezos have? What does Elon Musk have? Drake has a very weird plane, but that's just him, and that was a deal. But I'm curious, could you, like, walk through all the different planes and, like, when you should start at which one? And then, obviously, we can talk about the different kinds of financing options for those. But I guess first, let's start with the sizes and the prices on them.