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This Private Jet Operator Is Growing With A Low-Cost, High-Quality Model

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It’s a hot sunny day near the end of another hot, sticky summer in Lenoir County, North Carolina, a three-hour drive from where the Wright Brothers first took flight. Huge fans spin but can’t do much to keep a moderately-sized crowd cool as they sit and stand in a brand new 40,000-square-foot hangar at Kinston Regional Jetport.

The sound of a private jet taking off momentarily interrupts a series of speeches at the ribbon-cutting ceremony. The adjacent fields of corn, cotton and tobacco don’t offer a hint that this is home to the fifth-largest operator of for-hire private jets in the world’s largest private aviation market.

Several local TV crews are on hand as government officials in suits and ties take turns at the podium offering up figures about the economic benefits of what’s taking place in this rural community where the population today is the same as it was 60 years ago. Lenoir is one of the most economically distressed counties in North Carolina, according to one reporter.

However, the outlook is changing. Kinston is the beneficiary of having one of the longest runways east of the Mississippi River at 11,500 feet, a byproduct of the airport’s origins as Stallings Air Base, opened in 1944 and expanded in the 1950s during the Cold War.

It also benefits from its geographic location in a way that probably isn’t apparent to anyone outside of the aviation world. The airport is within two-and-half hours flying time of every major city east of the Mississippi, making it an ideal location for a provider of aviation services. Teterboro, the world’s busiest airport for private jets, is just a 57-minute flight north. Palm Beach International, which ranks third, is less than an hour-and-half to the south. Kinston is smack in the middle of the busy Northeast to Florida corridor.

It’s also the beneficiary of native son Jim Segrave, whose family has started multiple businesses in the area dating back to 1871 – from banks to a John Deere dealership, gas stations and daycare centers. Today, the community serves as center stage for the serial entrepreneur’s second act in the world of private aviation.

Estimates peg the value for the local community of FlyExclusive and Segrave’s related business aviation ventures at over $170. In the next 12 months, his aviation companies are adding over 100 mechanics and technicians here. It’s lifting the economy with jobs that pay 25% higher than the average.

It’s not surprising that executives say they are treated like celebrities when they wear company gear around town. Fathers and mothers cross the street and ask if they can bring their kids out to the airport for an up-close look at the jets. The answer is yes.

More interestingly, Segrave takes a different approach from competitors, a mix of aviation acumen, unapologetic common sense and Southern charm. Asked about what he is doing differently from Segrave Aviation, the company he sold to Delta Air Lines in 2010, the owner chuckles, “We’re trying not to make the same mistakes. New mistakes are okay, but we’re trying not to repeat the old ones.”

It’s not clear there are many mistakes, new or old. In fact, if legendary late 20th century airline CEOs Bob Crandall, Gordon Bethune, and Herb Kelleher could be merged into a singular being, they probably would create an airline along the lines of FlyExclusive.

As with the former chairman of American Airlines, there is a hawkish drive for innovation and cutting costs that don’t add value in ways not typical to private aviation. From Bethune, who took Continental Airlines from worst to first, there is the wisdom that often escapes data-driven C-suites: If your product is so cheap, customers don’t want to buy it, it’s hard to make a profit. Like the convivial atmosphere created by the late founder of Southwest Airlines, FlyExclusive is very much an extended family for Segrave. Many of the faces have been by his side for the better part of two decades.

Segrave wears a boyish smile and gives the appearance of a former athlete, relaxed and informal, sporting a white polo shirt, blue jeans, and sneakers, even for the ribbon-cutting ceremony. Soon to turn 50, he launched Segrave Aviation in 1994 with a single turboprop.

His come on in, we’re thrilled you came to see us demeanor feels a bit like you’ve walked onto the set of The Andy Griffith Show. But don’t confuse the folksy Mayberry demeanor with a lack of ambition or competitive drive. Segrave and FlyExclusive are already a force in the private aviation charter market – and have no intentions of letting up.

Founded in 2015, FlyExclusive has grown from three jets to 75. By early 2022, it will be over the century mark. Its fleet model is based on buying or leasing used jets, repainting them, and refurbishing them into a standardized configuration and interiors.

Through June, it clocked 21,822 flight hours, according to data from Argus Traqpak. Despite the fast growth, Berkshire Hathaway’s market leader NetJets, including its aircraft management arm Executive Jet Management, is still far ahead with 242,918 hours.

Without the deep pockets of a rich parent or private equity – Segrave is the 100% owner – doing things differently has always been a necessity. A 2009 article by Aviation International News credits Segrave as the first charter operator to implement a floating fleet model, keeping his airplanes on the move, flying point-to-point to meet the next customer, instead of returning to base after every trip.

From his office in the original building, with wide views that open onto the tarmac, the boss is unwilling to bask in any compliments. He offers, “Better to be lucky than good.” It’s typical of how executives here speak. Segrave, himself, doesn’t have a title on his card and his name isn’t on the website, although he serves as chairman.

The floating fleet concept, which was borrowed from a trucking business he also owned, was born from necessity. There weren’t enough customers in Eastern Carolina that wanted to charter jets at the time. “If we were in New York, it probably never would have happened,” he says.

Today, the floating fleets are considered the holy grail of efficiency in the charter market, with even smaller operators joining in. That said, about 30% of flights are still empty legs – repositioning planes that for the next revenue trip, something like others, Fly is working to reduce.

Mike Guina, the company’s CEO and longtime Segrave sidekick, who is also an active pilot and is often flying on the line, later tries to explain to me how they are working to reduce the empty flights. I try to follow along as he feverishly draws lines on a whiteboard in the conference room of the new office building, which could have been furnished online via Home Depot. That’s the way things are here—no need for expensive furniture.

Nobody wants to speak about the separation from Delta Private Jets back in 2013 or its closing of the Kinston facilities and elimination of about 50 positions, which set the stage for FlyExclusive’s birth. Being humble and not speaking ill of competitors are two of the company’s main tenets.

What is on the tip of everyone’s tongue is the phrase, “minutes matter.” That refers to making things as efficient as possible for the folks who fly in the back of its growing fleet – and how FlyExclusive operates.

While the offices may be furnished with a tight budget, it’s a different story when I tour the hangar where the company paints its own planes and will begin taking outside customers. Paint shop supervisor Sean Callahan, a 25-year trade veteran, marvels that everything is state-of-the-art. Costly machines and systems are designed to save not only minutes but days. It means the jets are back in service sooner, which means more revenue. Processes are designed, so the paint lasts longer. The more time between touch-ups, the less time they are on the ground.

In the type of move Crandall – who famously removed a single olive from salads to save money – would love, Fly bought its own silk screen printing machines. The screens are used instead of the typical decals for aircraft tail numbers. They cost 90% less than going to an outside printer and last longer.

Common sense is common at the Kinston headquarters. For the refurbished interiors of its jets, out are those shiny veneer finishes that are standard for private jets yet easily scratch. In are matted finishes designed to hold up to the wear and tear of 1,000 flight hours per year from its charter customers. Installations are designed so if something gets damaged, they can be repaired overnight instead of taking the aircraft out of service for several days.

To set up the painting and interiors facilities, management recruited a team with decades of experience and stops at venues such as Duncan, Bombardier, Dassault and Gulfstream. In the hangars and adjacent workshops, they strip out airplanes, sanding down the scratched veneers and apply the new durable finishes. Local hires begin as apprentices, working alongside the veterans.

Having seen how those nice interiors get banged up so quickly, Brad Toldbard, director of interiors and modifications, who, like Callahan worked at major OEMs and MROs, says the use of the more durable materials is something he advocated for decades.

There’s also a Bethune-like focus on what customers really want. The former chairman of Continental once summed it up as on-time arrivals with your luggage on the same flight.

To that end, you won’t find collaborations with celebrity chefs or Uber-like booking interfaces. Fly’s tech focus is to make travel more efficient and personalized. It plans to roll out an app that will ping pilots with passenger information and profiles about an hour before departure instead of in thick packets of information the night before.

The app will allow the pilots to track them as they approach the airport for customers who opt-in. If they arrive early, they can depart early. Instead of having to come into the FBO, go to the desk, and wait for a service rep to track down their crew, their pilot will greet them at the curb. In the meantime, the other pilot will be at the jet, getting it ready.

“If you get to my airplane and it takes an extra five minutes to get it off the ramp because we weren’t prepared, that’s no good,” Segrave says. He believes having pilots greet customers out front will remind them of flying with their friend who owns their jet, which brings a key point of differentiation. Members of its Club jet card fly on FlyExclusive’s aircraft 98.5% of the time.

Aside from NetJets, Flexjet, VistaJet and Nicholas Air, most guaranteed availability, fixed-rate memberships are brokers or provide a mix of their own fleets with third-party operators. In other words, you get a variety of aircraft, configurations and aesthetics.

The concession is Club customers book at least 96 hours before departure to get those rates. The key, says Segrave, is with four days’ notice instead of 10 or 24 hours, it’s possible to keep customers on his aircraft. With the new interiors – the fleet is slated to be fully refurbished by the end of next year – the idea is to provide a consistent experience.

While the standard call-out is longer than competitors, the company believes most customers have their trips planned weeks in advance. A recent revamp of the Club now allows members to book up to 24 hours before takeoff, although it carries a 75% premium.

The booking window for the jet owners, who are referred to as partners, is even longer – 120 hours. Much of Fly’s fleet are triple net leases. Owners get monthly guaranteed payments and have their aircraft refurbished, WiFi installed if needed, and then they get access to the entire fleet at lower rates, but need to book five days in advance.

In those final four days, after Club members and partners have booked, Fly fills up the schedule with bookings from brokers and other operators. While executives decline to discuss wholesale relationships, NetJets and Wheels Up, which are known for their rigorous vetting of third-party operators, both use Fly for off-fleet flying, according to customers of their programs I’ve spoken to.

Speaking of the fleet, a Segrave Aviation misstep the owner isn’t repeating this time is the mix of aircraft it flies. “We had over a dozen different types,” Segrave tells me. Fly’s light, midsize, and super-midsize jets are made up of just five models, all from Textron Cessna. Large cabin, long-range jets are via Gulfstream.

What’s the profile of aircraft being added? “To make money in charter, you can’t buy a brand-new airplanes, and you can’t buy ancient airplanes,” Segrave says. The target is between five and 15 years old with low flight time.

In a tight market, how do they find them? Fly has a dedicated sales team that cold calls owners of jets that fit the parameters. Brandon Greene, a senior vice president who was with Segrave at Delta Private Jets, is often the one doing the calling.

It’s typical of the roll-up the shirt sleeves approach here. “We want to be a team of humble professionals. Give me a great attitude over a book expert,” Segrave says, calling it the philosophical core of the family business for 150 years.

When I visit the state-of-the-art operations center, I ask Joshua Golden, who hails from the area and was at Segrave Aviation, what it was like when he heard his former boss was getting back into the game. He says of getting hired back, “It was a dream come true.” His first move? He immediately recruited several former colleagues.

I ask him what it’s like overseeing what is an unscheduled airline where schedules change on a dime, and all clients are VIPs. He says, “You go into battle together. We’re here to help each other. It’s a family.”

This year FlyExclusive will tally around $230 million in revenues. It has been profitable since its first year, and Segrave says he expects the top line to hit $300 million next year.

As I’m walking out of his office, I ask about selling Segrave Aviation. It’s the first time he doesn’t have a broad smile. There’s a sense of regret and resolve. “I didn’t realize I was losing my business family. The business family we have here today is what’s so powerful about what we are building,” he tells me.

While it’s not clear that Segrave gets dressed up in costumes for Halloween to create esprit de corps as Southwest’s Kelleher did, it’s clear that the Fly team has a bond that goes beyond standard company credos.