00:25:25 · Kenn Ricci
[00:25:25] S1: Kinda. He saw me, he saw me have a business. He saw me fly. He flew on one of my first Learjets, loved it. Okay. But he never, I mean, know, he would never, he never saw this coming. Got it. The only job I can have in law school is a part time pilot. So I'm a fill in pilot for a company called J and J Aviation. And J and J Aviation was a fraud. I mean, I'm just an employee there, but what they did was in the early eighties, they had investment tax credit of 10%. And if you bought an aircraft, you got an immediate 10% credit. So they would sell these Citation jets for $750,000 So they had about a fleet of about six airplanes. And then they'd sell these Citation jets to investors on the West Coast, a long way from Cleveland. And they would, they'd get the $75,000 investment tax credit, and then they'd pay the $750,000 for the plane. And then the head of J and J was a guy named Jeff Toke. And every month he would pretend that these aircraft were on lease, but they weren't. The aircraft didn't even exist. He would make up a dummy statement. He would say it flew forty hours this month. The revenue was $90,000 The expenses were $78,000 Here's your $12,000 check. So he simply put the 70, the million 5, the two aircraft, and put the million 5 in the bank and kind of dribbled out the interest in a fake statement. Well, after about a year and a half, the owner said, we gotta see our jets. And they were never, they were always in the air. They were never around. But one day they caught him and he flew the coupe. So this little company, J and J Aviation had like three employees, you know, a secretary, a dispatcher.
00:27:00 · David Senra, Kenn Ricci
[00:27:00] S0: And is this just charter? What's the charter? [00:27:03] S1: Using these managed airplanes or these Phantom airplanes, but there were six of them. They were Navajos and these little tiny piston engine aircraft. And the dispatcher, dispatcher there, Rick Michaels calls me up and he says, he said, You know, nobody here wants to do this. And I don't have, I'm not smart enough to do it, but you seem to know a little about aviation. You should buy the company. So I call my dad. And you're how old at the time? [00:27:28] S0: 26. And you never thought you were going to be an entrepreneur? [00:27:31] S1: No, in fact, I didn't even buy this company to be an entrepreneur. Bought it so I could still have a job. Like I needed to make sure these airplanes didn't go away so I could keep flying. I mean, that was the whole goal. [00:27:40] S0: And Rick said he could do it [00:27:41] S1: by himself. So I left, I kept, I knew [00:27:43] S0: I had to employ the dispatcher and run. It ended up with two of the planes left.
00:27:43 · David Senra, Kenn Ricci
[00:27:43] S0: I had to employ the dispatcher and run. It ended up with two of the planes left. [00:27:47] S1: So I had four airplanes when I started. And I called my dad and I said, dad, I want to buy this company, J and J Aviation. I'm actually going to name it Corporate Wings. And he goes, oh, he goes, I go, it's $27,500 And he said, well, how are you gonna pay for it? And I said, well, the company has 27,000 in the bank. So I think I can just use their own money to buy them. And he goes, Oh, he goes, Well, what are you doing for the other $500 I go, Why do you think I called you? So that was really how I bought corporate wings. And that company's still here today. [00:28:18] S0: Explain how you get from corporate [00:28:20] S1: wings to Flexjet. Right away I decided where's the niche for this corporate wings? Like everybody has a charter plane, like, but how do I get bigger niches and so on? And I, you know, life is timing. I met someone who worked for Chapman Freeborn. Don't know if you know this company. They move all the rock stars around. So they move the freight. You know, every rock star comes with a stage. And part of that stage can go on the land. Part of it has to go in big aircraft depending upon what, but it's a cargo moving system. And along with it, had this ancillary business to move the star, to move the celebrity.
00:28:20 · Kenn Ricci, David Senra
[00:28:20] S1: wings to Flexjet. Right away I decided where's the niche for this corporate wings? Like everybody has a charter plane, like, but how do I get bigger niches and so on? And I, you know, life is timing. I met someone who worked for Chapman Freeborn. Don't know if you know this company. They move all the rock stars around. So they move the freight. You know, every rock star comes with a stage. And part of that stage can go on the land. Part of it has to go in big aircraft depending upon what, but it's a cargo moving system. And along with it, had this ancillary business to move the star, to move the celebrity. [00:28:53] S0: I'm watching this documentary on the Eagles, the band The Eagles. And they had a bunch of success early on. And one of their favorite things about being in a band and being a rock star is that they have this private plane. It's like little like turboprop Yeah. [00:29:07] S1: Big groups went in those turbo props because they needed 15, 18 seats. It's the single performers that went in the corporate jets. Okay. I flew Elton John, Bryan Adams, Bruce Springsteen, Tony Bennett, Barbra Streisand. Those were the ones, those were my clients. So with Chapman Freeborn, whenever they would get a cargo movement and they needed to move the celebrity, I made a deal with them to do that. And that was how, that was really how- [00:29:33] S0: Was your initial niche? [00:29:34] S1: But it was really because I wanted to fly and I thought it'd [00:29:36] S0: be- Oh, you're piloting
00:29:36 · David Senra, Kenn Ricci
[00:29:36] S0: be- Oh, you're piloting [00:29:37] S1: that? Yeah, of course I am. Of course I am. Sure. And you know what? It was a good gig because you, when you flew those celebrity tours, say a pilot at that time got 7,000 a month. If you flew a three month tour, you would get 20,000 a month. Of course you had no work for that. And it was kind of perfect because I could fly the tour for three months and then have the rest of the time I'd work on the business or, you know, kind of learn the business and figure it out. So I'm building the business concurrently with doing these celebrities. Then I have these big planes. So I start to go more international. Fly, you know, I flew Richard Branson for a year and a half. I live in London. Best flying because I got to learn the world. [00:30:17] S0: Wait, wait. So you're flying Richard Branson. Now this is a corporate private jet. Correct. And you're [00:30:22] S1: just Well, remember to get the celebrities, I had to go to people that wanted to buy a large, like a Gulfstream, a Gulfstream II at the time. And I had to tell them, you use the aircraft, I'm gonna lease it out three months a year, which will pay for the aircraft for the whole year. And so I got people to give me airplanes on that financial agreement. [00:30:40] S0: They're putting up the money? Yes, correct. Okay, so that's how you're doing
00:30:43 · Kenn Ricci
[00:30:43] S1: this very limited? Correct, I'm doing it without any, there's no Kenn capital at this point. I don't even have, I got the $500 from dad. So now go into the nineties and along concurrent with building this business, once you have the large cabin filling in the rest of the fleets, kind of easy. Because people think if you can do the big stuff, if you can travel the world handling my airplane, so we, is, you must be qualified. So we start to build a managed fleet of aircraft till it gets to in the low 20s. And there's, you know, when you build businesses, there's these steps, right? Like without any other help, I could run three airplanes myself, you know. But then if I want to run 15, that's kind of the next step. I need 17 people to run 15. And then I need 17 till I get to 30. And then when I get to 30, I need 35 people. There's these steps of infrastructure. So I'm about where I need to be. And so in the early nineties, we don't even realize this today, but today big manufacturers, Gulfstream, Bombardier, Cessna, they pre sell their aircraft and they don't build them if they're not sold. But going back to the nineties, they looked at it like the car industry. Cessna had a dealer network where people, to be a dealer, you had the level of dealer. If you bought three single engines and one twin engine, you were this level. If you bought Ford twin engines, you got this commission structure and you were a larger dealer. But when the business didn't sell, there were all these white tails. So- Wait, what's that? A white tail. So a white tail is a plane that doesn't have an end number on it because they don't know who to title it to because it's not sold. So it was like the auto industry. They kept building, kept the manufacturing run going. And if they couldn't, if sales couldn't keep up, then they just parked them in a lot and called them whitetails. Well, Gulf War I happens in 1991. And it goes ahead that these whitetails, Hawker has these whitetails and Richard Santulli, who was the founder of NetJets goes to Hawker and says, You can't sell the airplanes. I'll take 20 of them and sell them on consignment fractionally. Is that the first? This is how fractional that That