Nextant, Flight Options and Sojourn Aviation: Business jet keiretsu

Alasdair Whyte

During the 1980s business academics said that much of Japan’s success came from keiretsu companies. These were businesses in the same industry with interlocking shares and relationships that supported each other.

Kenn Ricci’s Directional Capital has taken this to a new level with Nextant. A project supported by four sister companies.

Kenn Ricci

During the 1980s business academics said that much of Japan’s success came from keiretsu companies. These were businesses in the same industry with interlocking shares and relationships that supported each other.

Kenn Ricci’s Directional Capital has taken this to a new level with Nextant.

All aircraft benefit from large launch customers which give them some production certainty. In fact, Flight Options acted in this way for Embraer’s Phenom 300. When Flight Options ordered 40 400XTs Nextant got this. But, most importantly it also demonstrated to other potential customers that the aircraft would be supported after delivery.

“Flight Options and Nextant have different boards and Flight Options’ board took the decision to order Nextant 400XTs,” says Ricci. “I didn’t just phone myself and ask myself if we wanted to buy.”

However, it clearly was going to happen.

Whilst Directional Capital only owns 50% of Flight Options the other two shareholders are close to Ricci – one manages his family fund and the other is a close friend. Last year Ricci has also said that one of the reasons he re-acquired Flight Options was because he could see how the 400XT would work so well as a fractional aircraft.

But it would be wrong to think that Flight Options acquired the 400XT because it only benefitted Nextant. Like a true keiretsu deal it also worked for the fractional operator. First, it is a large owner of Hawker 400s so benefits from anything that increases these values. But most importantly the 400XT is a good fractional aircraft.

“I always knew we could sell shares in the lowest-cost best performing aircraft in its class,” says Ricci. “The Nextant 400XT is a perfect fractional aircraft, and we are getting a lot of interest.”

Nextant also owns Constant Aviation, an MRO with facilities in Cleveland Hopkins International Airport in Ohio and Birmingham International Airport in Georgia. These facilities are both authorised service centres so will support 400XTs.

And then there is Sojourn Aviation.

Ricci funded the launch of Sojourn in 2010 teaming up with Brad Hatt, who had held various senior roles at Hawker Beechcraft, including vice president of domestic Beechcraft sales, president of the Hawker division and president of Hawker Beechcraft commercial aircraft, and Gerry Wright, an extremely experienced broker dealer.

Sojourn – which operates as a partnership – is a broker dealer which also manages international sales for Nextant (and also sells new Phenom 300s from Flight Options’ order).  As a former salesman for the Hawker 400 Hatt is the perfect representative for the N400XT. Just two of the 14 individual orders for the Nextant 400XT have been to customers outside the US – one to the Czech Republic and one to South Africa – but Ricci is confident that will change.

Although Sojourn has cash to buy aircraft for its own inventory it is mainly acting as a dealer. However, it is interested in acquiring Beechjet 400XPs which it can either sell to outside customers or put into Nextant’s programme. Sojourn will also help sell on pre-owned Nextant 400XTs as the programme matures.

Directional is in negotiations to buy another significant business aviation company. And it is no surprise that it will fit well with Flight Options and Nextant.

 

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