Flexjet President Fred Reid: "Steven Slater Would Never Happen With Us"

In an exclusive interview, Flexjet President -- and former Virgin America CEO -- Fred Reid talks to 'TheStreet' about airlines, IPOs and, yes, Steven Slater.
Author:
Publish date:


"

NEW YORK (

TheStreet

) -- With more than two decades of experience running major airline companies, former

Virgin America

CEO Fred Reid knows a thing or two about planes. None of those planes, it's safe to say, were nicer than the ones he currently manages.

Reid, his current role as president of Flexjet, the private jet division of aircraft and rail equipment leader Bombardier, now delivers what he calls "very high-value, extreme efficiency and productivity" to a narrow clientele.

Not that it's not growing. Flexjet, which debuted in the fractional jet ownership market in 1995 and now has 850 employees and two types of aircraft, is currently expanding its fleet. It recently also formed a marketing alliance with

Korean Air

and a service alliance with

Jet Solutions

and

VistaJet

; began offering free wireless Internet services; and launched a new 25-hour share program. Flexjet provides access to a network of charter brokers as part of its charter brokerage services.

Reid recently spoke with

TheStreet

about Flexjet, comparing his time there with his time at Virgin America and as president of

Delta Air Lines

(DAL) - Get Report

and president and chief operating officer of

Lufthansa

(DLAKY)

; the expansion of the company's fleet at a time when budget airlines are growing in prevalence; corporate scandals involving private jet usage; and whether the actions of

JetBlue

(JBLU) - Get Report

flight attendant Steven Slater were heroic or reprehensible.

Read on for

TheStreet's

question and answer session with Fred Reid and video interviews with the veteran airline industry executive ...

Flexjet President Fred Reid

TheStreet: What are the key differentiating characteristics between the way the Flexjet business is run compared with that of competitors such as NetJets and CitationAir?

Reid:

We focus on a number of attributes really related to execution and service delivery. That's what we're known for. We have the youngest fleet of aircraft of any company of our type and very, very high technical dispatch rates and on-time performance and we put in something that's pretty much unique in this industry, which is a concierge-type service where a single phone number and a single person can handle all the complexities of any number of owners and runs all the interference inside our company to deliver a pristine, new aircraft at a great price and great operating reliability.

TheStreet: Can you tell us more about the new 25-hour share that you just launched?

Reid:

Historically, the fractional model is accompanied with a 50-hour commitment per year over five years -- and, of course, fractional comes with some unique benefits, such as the ability to buy a depreciable asset and have that asset purchased back from you at fair market value at the end of the contract.

We have just launched a 25-hour share, which permits people to enter the business of the fractional model at a far lower barrier of entry, if you will. So it delivers all the benefits of a fractional at an easier entry rate.

TheStreet: What about your jet card?

Reid:

We sell a number of types of jet cards. There's a 275 day one, 355 day one and then the 365 day one, which means you can fly anytime, anywhere in all the peak days and also it's priced by aircraft type. But it's a simple thing. You pay a fixed amount and there's no capital investment, no monthly fees of any kind. So it's a different type of usage of private jets.

Bombardier's Flexjet: Expanding its Fleet

Image placeholder title

TheStreet: You've held key positions in large, publicly-traded companies, as well as prominent private companies. What are the key differences in running these businesses?

Reid:

I think airlines, for example, where I've spent a fair amount of time, are very much in the public eye, serving in some cases tens of millions of customers every single year. Hundreds if not thousands of departures every day. It's an important infrastructure to our nation. What we provide is very, very high-value, extreme efficiency and productivity to a much smaller group of important business leaders, and frankly I find that very rewarding.

TheStreet: Taking the previous question a bit further -- what would you say are the key differences between running large, commercial airlines and running a small, private jet company?

Reid:

We have about at any given time between 800 and a thousand owners and card owners -- card and fractional jet owners -- and the difference is that they expect a lot and they get a lot from us and our levels of customer satisfaction are off the charts -- we're always fighting to improve, we're always striving to provide value. It's more personal. I know probably 150 of our owners and I'm getting to know the rest. So it's much more personal, it's much more refined, if you will, and the stakes are higher, because they have super-important jobs to get done and we fulfill that.

TheStreet: Would you ever take the Flexjet company public?

Reid:

It's not contemplated at this time. We are owned 100% by Bombardier, the aircraft and rail equipment manufacturer and right now we are providing great value to Bombardier and we are a very loyal customer of theirs. It's not contemplated now.

Bombardier's Flexjet: Budget Airlines Impact

Image placeholder title

TheStreet: Steven Slater -- the enraged JetBlue flight attendant who deployed himself from the plane -- were his actions heroic or reprehensible?

Reid:

It's a big topic certainly in popular culture right now. It is sad that there is so much tension at the service delivery level at so many airlines. It is sad because among other things it drives a lot of business our way. Let me just be diplomatic and say that that would never happen at Flexjet.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here:

Andrea Tse

.

>To follow the writer on Twitter, go to

Andrea Tse

.

>To submit a news tip, send an email to:

tips@thestreet.com

.

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.