The Business of Flight
“Clients didn’t demand difference because they just didn’t have any choice,” says Steve Varsano, a New Yorker with a touch of the Rat Pack about him. “And that’s bewildering when you think of the cost and the complexity of the purchase. It’s just a ridiculous way to do business.” Varsano sells private jets for a living - indeed, he reckons he’s sold over 400 since he started in the business during the 1980s. But, disheartened by past experience – the established industry model has been for brokers to deal with clients remotely – Varsano does it differently. He’s the founder of The Jet Business, which operates out of offices behind a shopfront on London’s Park Lane, and named as such “because, well, when people ask I say I’m in the jet business - it’s a simple name”.
Indeed, his is the only way a customer could walk in off the street and walk out US$65 million (S$88 million) lighter but the owner of, say, a Gulfstream G650. The shopfront is eye-catching too: there’s a mock up of a full-sized fuselage, which is as luxuriously fitted out as one might hope for.
But, while Varsano is making the experience of buying a jet more personal, he’s also making it more high-tech. Potential customers sit in front of a giant screen, which shows dozens of aircraft currently in production. One by one, by answering questions regarding their needs relative to space, range, running costs and the like, “and not using the figures provided by manufacturers, which are based on a perfect day with no winds”, Varsano notes, these are whittled down to a few options.
These can be then be directly compared graphically: one wall projection gives relative cabin size on a one-to-one scale. Varsano’s database is maintained by a team in frequent contact with those who already own a private jet, who can then reveal the options for the model selected.
“You can’t tell someone who’s uber wealthy and uber successful that they don’t know what they’re talking about (when it comes to private jets),” says Varsano. “But you can show them that they don’t.
Steve Varsano wants to sell you a jet for your next
flight of fancy.
“And that’s bewildering when you think of the cost and the complexity of the purchase. It’s just a ridiculous way to
do business.”
Even I don’t know everything about every aeroplane and I’ve been in the business a long time. There are just too many parameters. So a client often doesn’t know why he should make certain choices. I want to sell them what they need and want, because that’s a much easier sale.”
Perhaps unsurprisingly, given that The Jet Business is a disruptive way of doing things, most of its customers are entrepreneurs rather than Fortune 500 companies. That makes its potential customer base even smaller but also more closely connected. “We’re dealing with a very, very thin stratosphere of people and they talk to each other. In that world there are just one or two degrees of separation.” He estimates there are just 20,000 people on the entire planet he might be able to sell to. Once the private jet market was dominated by sales to the US, but now it’s a global market, making it impractical for the salesman to go to the client. “I wanted to see the client face to face but some locations take days to get to. So I wanted to create a place that clients would be happy to come to. That meant creating an environment they’re happy to be in, with the latest tech and market intelligence.”
People are, Varsano notes, also more enthusiastic about dealing with brands, something the jet rental business has tapped into, but not jet sales. Varsano says he’s a great believer in brands, a product of a previous management career in the fast food business.
“I know from that experience just how much people want to do business with brands, even when the expenditure is minimal. If it’s McDonald’s or Joe’s Burgers, invariably they go to McDonald’s. And so far The Jet Business is the only brand in pre-owned jet sales.”
It’s one he’s hoping to take worldwide too, with the opening of shopfronts in New York and Dubai on the cards, though that may mean not all clients will get the Varsano personal touch.
“Look, nobody in a business is as passionate about it as the person who launched it is. That’s just human nature.”
But, it will mean more of the 20,000 will have access to his innovative approach. Varsano, a pilot himself, is already seeing shifts in his business that he needs to keep on top off. For example, customers don’t want to splash cash for the sake of it. “The days of customers just wanting to buy the biggest jet they can ended with the stock market crash of 2008. Now they really want value.”
And the market is, for a phase at least, gradually moving away from seeing demand for used jets to demand for new ones, in part because the pace of change in aircraft technology – cabin pressure, avionics, fuel efficiency – has moved on apace in recent years.
This has made refitting an older aircraft make less sense, but also because there are fewer secondhand aircraft of below seven years of age available, and customers are less inclined to buy anything much older than that.
“The problem is that the jet sales industry doesn’t want to change, doesn’t want to invest. And frankly, I’m shocked that we haven’t been copied yet. But then what we do isn’t easy. Does that make us more expensive? Sure. But you’re getting the kind of advice that saves you money in the long run. Besides, when you need a surgeon, you don’t go to the cheapest. And it’s the same when buying an aircraft that will carry you, your family and your top employees.” www.thejetbusiness.com
“If it’s McDonald’s or Joe’s Burgers, invariably they go to McDonald’s. And so far The Jet Business is the only brand in pre-owned jet
sales.”