Southern Jet, Sarasota: In Plane Sight

Steve White is president of Sarasota-based Southern Jet, a private jet charter service. The firm flies passengers in and out of Sarasota-Bradenton and Boca Raton.

REVIEW SUMMARY
Business. Southern Jet, Sarasota
Industry. Travel, private charters
Key. The company, which entrepreneur Steve White bought in 2010, has ambitious growth plans.

Steve White isn’t a hater on the 1%. 

After all, the maligned demographic is the primary reason why White’s firm, Sarasota-based Southern Jet, is on a flight to fast growth. The private jet charter service runs flights out of Rectrix Aerodrome at the Sarasota Bradenton International Airport, and a hangar it owns in Boca Raton. It has flown everyone from A-list actors to a women’s fashion mogul, and everything from live organs to coffins.  

“The people who are the 1% are still going to travel,” says White. “They are just going to be quieter about it.”

But White won’t tiptoe on the opportunities he envisions for Southern Jet, which he bought in June 2010. The firm was then based in Macon, Ga., and was in financial trouble, says White, both from the recession and some internal management issues. A onetime chef, White bought Southern Jet and its one plane at a steep discount — as low as 45 cents on the dollar, he says. He declines to specify what he paid for the business.

The company had done about $3.5 million a year at its peak when based in Georgia, says White. But the business “had almost ceased operations,” says White. “We started fresh when we moved it to Florida.”

That freshness now sparkles. Under White, the company is now at about $4 million in annual sales, with records for passenger traffic in four consecutive months through February. Some months in 2011 were up at least 100% over the previous year, adds White.  

“We’re doing crazy-awesome sales. We’re actually turning away business, we’re so busy,” says White. “If we’re doing this good in a down economy, I’m optimistic about the future of the company.”

Yet challenges lurk for Southern Jet, which has nine employees. A big ongoing one is the costs to fly a plane anywhere, from fuel and landing fees to maintenance and insurance. Those costs impact White and his competitors. “In this business, there is a high gross dollar,” White says, “but it has ridiculous expenses.”

Hunker down
Still, optimism, somewhat counterintuitive given its appeal to a luxury clientele, is a buzzword these days in the Gulf Coast private jet service industry. Although some firms scaled back in the downturn, several others, including Southern Jet, are in expansion mode. That goes to more passengers, routes, trips, and planes.  

For example, Tampa-based ExecuJet Charter Service Inc., one of the largest private jet firms on the Gulf Coast, announced March 8 that it bought a Hawker Beechcraft 800 XP. The acquisition of the eight-passenger plane cost more than $2 million. 

The Hawker Beechcraft brings ExecuJet’s total fleet to six planes. That includes a Gulfstream IV it manages, a 16-seat plane that can fly overseas, and a refurbished King Air 200. The firm spent $1.2 million on the King Air 200 last year, says ExecuJet President and CEO Peter Cunzolo. 

The reconfiguration added two seats, so the plane can now hold up to nine passengers. The company installed Blackhawk engines, which allows for faster cruising speeds, and it changed out the propellers, which reduces noise. The outside of the plane was repainted.    

The refurbishment project and new plane acquisition fits into Cunzolo’s mission to grow ExecuJet’s market share in the recession, even if margins shrink. He expanded the firm’s advertising budget, too.

Cunzolo also recently began to reemphasize the company’s marketing presence in Naples, a fertile spot for customers given the incomes and demographics. Says Cunzolo: “We felt like crawling in a hole and hunkering down wasn’t the right thing to do.”

Ditto for Naples Air Inc. co-founder Catherine Fay. Fay says firms that didn’t increase marketing in the downtown have since suffered from little or no name recognition. Revenues at Naples Air, however, rose 200% in February over February 2011, says Fay, who runs the firm with her husband, Jon Fay.
 

Fay says there were only three days last month when the company didn’t fly a plane for a customer — busy, even for the busy season. “We were just slammed,” says Fay. 

Large expenses
Passengers, likewise, continue to fill up the trio of planes at Southern Jet. The firm has two planes it owns, a Learjet 55 and a Learjet 35A, in addition to a third plane, another Learjet 55, it manages. The latter relationship, the plane management side of the business, is where White sees the most growth potential. “It’s a very nice revenue stream,” says White. “That’s the way we are going.”

Aircraft management, which companies like ExecuJet also do, is similar to property management, where a company handles all tenant-related tasks for an owner. Southern Jet does that for an aircraft owner, everything from maintenance to training crews to scheduling. In return, the owner gets a percentage of what Southern Jet charges clients. Southern Jet keeps the rest of the revenues. 

White says he’s in negotiations with another airplane owner to take on a second management project, and he could sign a deal soon. He would also like to add eight to 10 more planes to the management side of the business in the near future. White says that could turn Southern Jet from a $4 million company into a $20 million business.  

No matter the plane’s owner, White says expenses remain the highest hurdle to growth. “Fuel is our No. 1 expense and our No. 1 challenge,” says White. “We are constantly looking for an edge.” 

To get the edge, the company will negotiate fuel prices, and landing fees, with airports. But with the price of jet fuel hovering at $5 a gallon, even buying gas in bulk is a big gulp. 

Another big expense: engine insurance. White says he pays $500 an hour of flight time for engine insurance, most of which, admittedly, he passes on to customers. “You choke at what you pay on a monthly basis,” White says, “but it’s one of those things.” 

Another thing White did, soon after he bought Southern Jet, was he had what was then the company’s only plane refurbished. The project cost $350,000. The interior of the plane was redone, which included adding Ferrari leather seats, two flat screen TVs and two iPod docks.  

Diverse cargo
Intricate details like those are the core of what White envisioned he could do with an air charter company. 

White grew up in northern New Jersey, where he idolized his uncle, a high-ranking captain and pilot with Eastern Airlines. The airline’s motto, where it “earned customers wings,” resonated with White. He went to school to become a chef, though, and later worked in sales and marketing in the food service industry. 

But White never lost his passion for flight. “I always loved flying,” White says. “I loved everything about it.”

White moved with his family to the Gulf Coast in 2005. He cofounded a custom muscle car fabrication business, S/S Motorsports, in Sarasota, and he poked around jet service opportunities. Southern Jet was his break.

“The downturn in the economy hurt people, but it also created some opportunities,” says White. “We took advantage of the downturn.”

White hopes Southern Jet can continue to take advantage of the nascent recovery. He declines to name exactly who the company has flown in and out of Sarasota-Bradenton, but he says only a few are super-famous. The firm will fly just about anywhere in North and South America.

Moreover, passengers and cargo on some other flights stray from the mere wealthy. The company has donated a few flights to cancer patients, and it also recently delivered lungs and a liver to Washington, D.C. for a transplant. On another flight, Southern Jet sent a deceased man, in a coffin, from Florida back to his home in Maine.  

The diversity fits White’s mission, and his ideals of what can make the company sustainable. “We have created a culture,” says White, “where anything less isn’t acceptable.”

JET SET
Private jet companies tend to focus on customer service and convenience factors in luring customers to give up commercial flights.

That’s because on price alone, the rates can induce sticker shock.  

Several factors go into what determines the price of a private flight. Distance and the price of fuel are two big ones, usually the biggest. Landing fees, the size of the plane and whether the client is part of a frequent flier club are other integral factors. 

So while an average flight price is hard to pinpoint, Steve White, president of Sarasota-based Southern Jet, says a one-way trip from Sarasota to New York runs about $8,000 these days. 

At Tampa-based ExecuJet Charter Service, meanwhile, a roundtrip three-day excursion from Tampa to New York, on average, can cost a member of the firm’s Freedom Lease program $13,000. A three-day trip means the plane is dedicated to the client for three days — one to fly to the destination, one idle day there and one to fly home. 

That flight, on a mid-size Hawker Beechcraft, could cost about $20,000 with ExecuJet for a traditional charter client, the firm says. 

MOTOR MUSCLE
One business that caters to the wealthy through speed apparently isn’t enough for Steve White. 

And for that, in addition to Sarasota-based Southern Jet, White has S/S Motorsports. Also based in Sarasota, in a shop off Clark Road, S/S is a relic: It custom builds modified high-end muscle cars, what it calls high-performance vehicles “that are mild enough to drive anywhere and extreme enough to cross the ¼ mile line in under 11 seconds.”

White and a business partner, Steve Keech, founded the company in 2006, after White had a bad experience with another custom car fabricator. The company has since rebuilt several major muscle cars, including Camaros and Corvettes. The process can cover everything from engines to paint. 

Not surprisingly, business has slowed in concert with the recession.  “While the top 1% of people do like these cars, you need a broader market,” says White. “And that broader market has gotten wiped out.”

White, for instance, recalls that in boom times, he had a client who bought a new car every six months, just because he could. That client hasn’t been back in four years.

White believes the business will come back with the economy. “The people who have not been buying these products, when they are able to buy again, they will go crazy,” he says.

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