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
00:32:48 · David Senra, Kenn Ricci
[00:32:48] S0: is the invention of. That's the [00:32:50] S1: invention of fractional ownership. Rich Santulli, brilliant, realized that the average company flies an airplane three hundred hours a year. A plane wants to fly twelve hundred hours a year. So why don't we get four people to share them? What does [00:33:05] S0: it mean a plane wants to fly twelve hundred hours [00:33:07] S1: a year? [00:33:07] S0: Well, because if you look at a lot of
00:33:09 · Kenn Ricci
[00:33:09] S1: things, number one is an airplane doesn't like to sit around. They break when they don't fly, fluids leak out and they, so they want to fly, number one. Number two, they have the capacity to fly a thousand to twelve hundred hours a year. So an average corporate owner at that time was leaving the plane in the hangar five days a week. And so why not utilize that dead asset? That was his vision. And so he initially thought, well, if I get four people to each put two hundred hours on the plane, that's kind of the perfect. So I'm going to sell the planes in quarters, which is why if you see NetJets' N number today, it still ends in QS, quarter share. Because originally they only sold two hundred hours. Now today you can buy one hundred hours seventy five. But that was his vision. And he sold these white tails, these consignment aircraft. So he never put up any capital. He said, If I sell them, I'll give them back to you. So all of a sudden now this becomes in vogue. And where is he stealing customers from? Me, the charter operator. Because in the charter business at that time, if you took my plane and went to Florida, I had to charge you to return the plane back to Cleveland. Otherwise, how did I get it home? He had the idea of this floating dispatch. I'll drop you in Florida and then the next client, I'll figure out how to get them from here to there. Well, that was attractive to a lot of different companies. And so he was starting the steel business. I got a little nervous. So between 1993 and 1996, I'm watching this unfold and I say, well, he's selling these brand new assets because he's getting them from the manufacturers on consignment. I'm going to go into the used market and I'm going to buy them used pre owned, previously enjoyed I like to say. And I'm going to go ahead and I'll have the exact same airplanes he did. So whatever NetJets had, if they bought brand new Hawkers, I had a used Hawker program. If they brought brand new citations, I just emulate them, had a used citation program. That was my vision. I would be buying them used at half price. So the service is the same. It's still, you can fly. You only pay for it when you're on board. It's just the buy in is going to be 50%. That was my vision. But unlike him, I couldn't buy these on consignment. I had to have capital to do it.
00:35:27 · Kenn Ricci, David Senra
So in 1996, put together this is my first time really starting to look at a business. It's the first time I kind of understand the depth that I have to present the presentation, you know, looking at cash flow and projections. And I go out to different banks, probably 35 or 40 of them with this idea of fund me the amount of money I need to start the business. I think I needed 30 or $40,000,000 of borrow. Wanted to borrow it. And they look at me and the banks are like, we don't get it. Like, where's our collateral? We have the tail of the airplane you're selling out. Like, how do I have a quarter of a plane? None of them were a buyer. I think at the end of twelve months or fifteen months of being on the road, I had maybe 7,000,000 of opportunities if I put up assets equivalent to 7,000,000. It was the worst financing ever. In June 1998, Warren Buffett buys NetJets for $750,000,000 and he christens the industry. And I just happened to be the guy who saw the banks last. And that summer I got almost $300,000,000 of debt financing. So again, accidentally wealthy. [00:36:31] S0: Because they're like, well, is doing [00:36:33] S1: what It's he's [00:36:34] S0: a good idea if It's Warren is [00:36:35] S1: good idea. Yep. And all of a sudden Bombardier Capital, Boeing Capital Fleet Bank, all 50,000,000 here, 50,000,000 there, gave me these lines of credit. That had allowed me to buy the initial fleet, which I went active 10/13/1998. [00:36:50] S0: But what is the company? Is it still Corporate Wings? [00:36:52] S1: No, I phoned a company. I branded that product Flight Options.
00:36:52 · Kenn Ricci, David Senra
[00:36:52] S1: No, I phoned a company. I branded that product Flight Options. [00:36:56] S0: Okay. [00:36:56] S1: That was the brand. Deal is how [00:36:59] S0: the best founders turn the world into their talent pool. I've been studying how history's greatest founders operate for a decade. And one thing they all have in common is they understand that recruiting and hiring the very best talent is your most important priority. A players recognize other a players, which is why top companies like Ramp, Shopify, Eleven Labs, Uber, and DoorDash all use Deal. Many of the top founders I know have personally invested in Deal after using their product. And what they discovered is that Deal is the best company in the world at building infrastructure for global hiring. Deal will help your business hire, pay, and manage any worker anywhere in the world so you can retain the best talent anywhere and spend the rest of your time focusing on what you do best, delivering value to your customers. The founder of Eleven Labs has a great description of the value Deal can give your company. He said, we built Eleven Labs to break down language and communication barriers. With Deal enabling us to hire and support exceptional talent anywhere, we can accelerate our innovation and bring more voices, stories, and ideas to every corner of the world. Deal is trusted by over 40,000 companies and growing fast. Learn how they can help your business by going to deal.com/senra. That is deal.com/senra. So that's flight options. You start with how many planes with flight options? Two.