Flexjet made several big moves in 2023, including the purchase of two MROs. Hear how this, along with a new operations center and training initiative with Purdue University, impacts its maintenance and operational performance. Andrew Collins, co-CEO of Flexjet and CEO of Sentient Jet, speaks with Lee Ann Shay.
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Rush Transcript
Lee Ann Shay: Welcome to this BCA podcast. I'm Lee Ann Shay, Aviation Week's executive editor of MRO and business aviation. We're nearing the end of 2023, a year when we've seen some bold moves by Flexjet. It scrapped its planned merger with a SPAC, and instead generated capital from the private market for its growth plans that include vertical integration.
Here to discuss some of this growth and how it impacts its maintenance is Andrew Collins, who is the co-CEO of Flexjet and the CEO of Sentient Jet. Welcome, Andrew. How are you? Thank you for joining us.
Andrew Collins: I'm doing great. Thanks for having me. I appreciate it.
Lee Ann Shay: Thank you. Well, let's just launch into this. As part of its growth, Flexjet purchased two MROs this year, Constant Aviation and Flying Colours, at a time when the MRO market is pretty tight. What does this mean for Flexjet's operations?
Andrew Collins: Well, I think if you back up, the thesis on this in general was twofold. There was a pragmatic approach to it, which is we simply are getting to a point where we're scaling and getting towards a fleet of 300 aircraft, where utilizing third-party MROs and finishing out in the third-party market became a little bit more challenging as we grew, and we like to have control and flexibility over what we're doing. So whether that's applying what is a difficult livery to our aircraft, customizing them and finishing them for our Red Label program, which has customized interiors and really emphasizes that in-flight experience, and is part of the brand and the brand heritage. As well as just what then strategically ... or I would almost say is a trend in the marketplace. You're seeing a lot of private equity now come into the MRO space. And in some way, shape, or form, my guess is most of the larger MROs, if they're not involved or haven't been involved in some form of a private equity event, be it alternative financing, be it acquisition, be it some form of rolled up consolidation, they probably will be.
And for us, really, it's about having that control and making sure we have the control because we have an end consumer and a consumer promise that we have to deliver. So we went from a tech base of a couple of hundred talented individuals, to something now north of a thousand that make up aircraft maintenance technicians, completion specialists, and supply chain specialists, and what you would find within the MRO world. But it's very important for us to be vertically integrated. And I think that's actually ... I don't think anybody's done it like that yet in our space. And I think that's actually going to be a significant positive thing for us as we move forward.
Lee Ann Shay: So on top of that, Flexjet and Purdue University launched AeroSphere for Business Aviation, which is described as, quote, "A living ecosystem where learning, working, and innovation converge." And it's designed to deliver an A&P certificate in two years. Why did Flexjet decide to create this?
Andrew Collins: So I give a lot of credit to the head of our product support and maintenance group, Jay Heublein, on this. There's a lot of innovation happening on the product support and the MRO side of the house, where we're really looking at things and trying to do things as different as we can in some cases because we're trying to bring more of an advanced approach. And so in the case of why we did this, there's really a scarcity of highly talented technicians and individuals. And we wanted to get A&P folks that could come out of something like this apprenticeship and this program, and not only would they have the A&P experience, but they'd also have the avionics experience. Because we really want advanced technology folks coming into our world. And so this felt like, could we get the best in training working with Purdue? Could we have an applicant pool that is significantly large and will be very competitive? And eventually will we have about 30 folks that come through this?
And over time in the 30-month curriculum, they will not only be earning a salary, they will be receiving tools, toolboxes, et cetera, and the best in training and so on and so forth. But it was about this growth in infrastructure that we're seeing, and trying to make sure that we were bringing on folks that really could fit into the world we're headed into as we buy more of the advanced aircraft, and think about more of the unique structures that we're doing. For instance, the way we're thinking about setting up our lines or the way we're thinking about AOG coverage and the like.
Lee Ann Shay: So this program isn't just about more A&P people, it's about also tailoring the training while they're in school. And it sounds like you might even be able to decrease the amount of on-the-job training, perhaps, once they start with Flexjet?
Andrew Collins: Yeah, I think you're hitting it perfect. Which is, we could set up in-house training, and I think that's a default state that a lot of folks have. For us, this was a lot more about how could we creatively bring on folks that had more under their belt, as it were, as they came on board, and were considered some of the best of the best? And this is similar in the way we think about pilots and the way we bring on team members. We're looking for A-level talent because we're growing an A-level global company. And in order to do that, we're forced to think out of the box. We're forced to sit there and say, "What do we want to do? How do we want to do it? And how are we going to resource around it?"
So this was, I thought, a really intelligent and smart idea. We had a pre-existing relationship with Purdue, but not near to this extent. And when this came about, it was quite exciting. In fact, I met the whole team, I don't know, about ... what, Susan, was it like two or three weeks ago? I think that we met with them. And they are passionate, they are excited, as are we.
Lee Ann Shay: So what makes this program unique?
Andrew Collins: Look, it's a thirty-month curriculum. You get three different geographies to do it out of. You could be in Cleveland, you could be in Sanford in Florida, or you could be in Dallas. Everything's done at the facilities. You're paid on the job. You're getting the best tools, you're getting the best equipment. But you're also on a path not only to graduation, but you're on a path to a potential job offer, where we at Flexjet, I think have the industry-leading compensation program. So I think this is just a well-defined ... or it is becoming a well-defined way. If this is where you're interested and this is type of career you want to have, I would argue there's no better way to have it, especially if you want to come into private aviation this way.
And for us, as we advance our programs and our products at Flexjet, we're taking an innovative approach to those, be it whether we're working with OEMs to purchase the newest aircraft, all the way through to how we're thinking about product. So you're not necessarily just working on very standardized things once you come out, there is a lot of creativity in this. So I think there's quite a bit of differentiation, but I think it starts with the idea that just getting accepted to this program has some prestige to it. And then I think it's a really robust program coming through, that's well-resourced and will be well-equipped. But at the end, has the idea of you potentially coming into an organization that I would argue is on the cutting edge of its industry.
Lee Ann Shay: Well, it sounds ideal. So these are for new hires, but is there any play for this for your existing maintenance staff? And especially since going back to where we started, Constant Aviation and Flying Colours, you've got some harmonization, I'm assuming, that needs to happen?
Andrew Collins: Yeah, it's a great question, Leanne. And I don't have a perfect answer. I would tell you that the thing that's interesting to me about it is we are going through the integration of Constant and Flying Colours, and Flying Colours is the newest. And so as we do this, perhaps that is something that we can come back and bring folks in, or offer them to. We've already been realigning Flying Colours to everything from our compensation, all the way through to our culture and benefits. And I think that's been going over very well. So it wouldn't surprise me in the future if with the success of something like this, we thought about it on a little bit of a broader scale when it comes to the whole base of folks, but we haven't gotten there yet.
Lee Ann Shay: Okay. Sounds fair enough. And then, Flexjet opened a new operations center in September. So in addition to having the two maintenance ... integrating the two maintenance companies, launching this new program, you've got a new operations center. So how does that all work, and is the operation center functioning as you intended it? Is it making any impact?
Andrew Collins: It's making a huge impact. Let me start with just the concept. Our ambition is to be a global organization, and that's reflected in how we're building infrastructure throughout the United States and then over in Europe. And so because of that, we know that we have to have a representation, especially in the United States, of what that ambition is. And also make sure that our team members, our employees know what that is. And the global command center, the global operating center in Cleveland is reflective of that. And what's interesting is when you think about what's happened in the world for the last few years with the pandemic, there's been a lot of folks that have been slow to the return of the office. I can tell you there's not a slow return to this operating center. That parking lot is full every day. It's very unique. It's very interesting.
I know we can supply the facts for you in a bit more detail, but it's got an amazing footprint and it's been designed for a lot of different things. When it comes to thinking about maintenance and the things that go on, we have a top row of maintenance managers that are right in central command. They're right in the middle of the heartbeat of the organization. They see all the flying and they know when there's any issue, and they're automatically in the thick of things. That wasn't necessarily the case, especially during COVID. So there's an accessibility level that's important. The other thing is, I think it's more cultural. It's just, everybody's in the room ... and this is a very large building. But everybody's in the room and they're not spread out. And so you've got a really nice bond happening between the operational, the flight operational, and the maintenance managers, and folks that are happening.
I do think that it really has unified everybody to feel that they're on one team. Really important as we've become an organization of almost 4,000 people. So the rapid growth that we've seen in the last five years, I think the operations center has really helped galvanize that. And I think, as I said, in terms of the maintenance aspect of it, a good example is we had one of our busiest days ever in the history of the company over the Thanksgiving week. And on the same day, we had the highest level of dispatch availability we've ever had. That has a lot to do with that partnership between the maintenance folks and the operations folks in flight. And that wouldn't really have been possible without a lot of the ways we've been thinking about product support, service support, and maintenance support over the last year, especially. And as well as having everybody in the combined building.
Lee Ann Shay: Well, it sounds like a lot of good maintenance integration has already happened. And when you talked about vertical integration as a whole, it sounds like that new ops center is really critical for achieving that and increasing the dispatch reliability, like you just talked about.
Andrew Collins: The direct link to it. Absolutely.
Lee Ann Shay: Sounds good. Well, you've already had a very busy year. We're here in December of 2023. But anything, any developments that you can share for 2024? What's your outlook?
Andrew Collins: Obviously we're going to take more aircraft online. So the fact that we've set up this infrastructure and this footprint ... we're running an aggressive seven days a week, 20 hours a week ... or 20 hours a day lines. And it's really about making sure that we're focused on safety and dispatch availability. So with that, that will continue, and that has worked really effectively. We really saw that pay off, when I mentioned that dispatch availability on the busiest day. I think we're looking at really global integration. And I've used that word a few times on here, and it's not a throwaway word in our world. Our folks just came back. We have an outpost in Milan and we have a place in Farnborough. And we're really linking that together with our global operations center in Cleveland and with the various geographical outputs in the field relative to maintenance and such.
So I think where you're going to see the first real bites of us being globalized are really both on the customer service side, and not surprisingly, based on the last couple of years, on the product support and MRO side. So with Europe, we have a large AOG footprint, and so on and so forth. So I think there's more of that. I think there's more of the integration of Constant and Flying Colours. And then I would tell you that, who knows? It's an industry right now that has gone through a lot in the last three to four years. And as I've said recently, I think that I would bet on our strategy, which is rather than go out and look at buying flying companies and try to solve for temporary capacity issues that were happening, we doubled down in thinking about the backside of the house and how to make sure that we were servicing and supporting our own customers. And I think we're going to stick to our netting for that in '24.
Lee Ann Shay: Sounds good. Well, thank you for sharing that. It sounds like we should be talking in the near future, because you've got a lot of plans.
Andrew Collins: Yeah, we do. And I look forward to it.
Lee Ann Shay: Thank you so much for your time, Andrew. We really appreciate your insights. And listeners, please don't miss the next episode. You can subscribe to the BCA podcast wherever you listen to them. And one last request, if you're listening in Apple Podcasts and would like to support us, please leave us a star rating or write a review. Thank you so much.
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