Why LVMH likes Flexjet

opinion

by Alasdair Whyte

July 25, 2025

Kenn Ricci, chair of Flexjet and founder of Directional Aviation.

“Isn’t it nice not to be going through diligence?” It was the end of 2024 when Kenn Ricci, founder of Directional Aviation and chair of Flexjet, said this to Mike Rossi, his long-term business partner.

Rossi had just closed the issuance of a $550m unsecured bond for Flexjet and was looking forward to a break. A few days later, an email arrived from L Catterton, the private equity fund aligned with LVMH Moët Hennessy – Louis Vuitton and LVMH owner Bernard Arnault.

Flexjet was not looking for investors, but, L Catterton’s links with LVMH’s luxury brands made this approach of particular interest.

Although it is best known for its luxury products, LVMH sees travel as one of two key growth areas. The other area is longevity. In 2019 it acquired Belmond, the hotel, train and river cruise company, for $3.9bn. It also owns the Chateau Blanc and Les Domaines de Fontenille hotel chains.

Some 232 days after the email, Flexjet closed a $800m investment with L Catterton, KSL Capital Partners and J Safra.

Flexjet is not using the money to repay debt. Some $200m is going to existing investors as a dividend (as did some of the proceeds from the bond). The rest will be invested on improving its customer experiences.

Ricci says that the management team spends most of its time looking at how to keep existing customers.

“Vertical maintenance integration is such a competitive advantage for us,” says Ricci. “We’re going to continue to invest in infrastructure that allows us to enhance performance in a significant way. There’s a lot of things we need to do well to be able to enhance our performance from ground handling to catering and so on.”

Flexjet has already invested almost $125m in private terminals. “There is no return on that. We don’t charge anybody to use those terminals. But it improves experience, builds a moat around the business and it entrenches the brand,” says Ricci.

The company will also grow its core fleet to support fractional customers. “If you think about long-range aircraft, when you’re on the top of the heap, there’s no sell-off available. When I have a G450 and I can’t service the customer, I can send a Global, I can send a G550, I can send a G650, but at the top I can’t do that,” says Ricci. With smaller aircraft, Flexjet looks to have around a 30% core fleet. Ricci believes with larger jets that needs to be closer to 50%.

It has been widely reported that paying $800m for a 20% stake means that the company is worth $4bn. This is a little simplistic. L Catterton and its partners have invested in preference stock. Unlike common stock, preference shares have fixed returns, higher equity upside and downside protection. If Flexjet outperforms its forecasts, L Catterton’s stake will fall (and vice versa).

One thing is clear. The company is worth a lot more than the $21m that Ricci and Rossi paid when they bought Flight Options back in 2008 or the $180m they gave Bombardier for Flexjet.

Ricci stresses that this is not the start of him leaving the company. He adds: “I’ll exit Flexjet at my funeral.”