Rough Takeoff to Smooth SailingRabin Pilots JetSuite to Steady Growth Sunday, March 31, 2013
Some competitors also require customers to buy a fraction of the plane or a set number of flight hours. Rabin’s team offers memberships that include “jet cards”—a payment system that deducts the price of each flight from a $50,000 deposit. Membership is not required to charter a JetSuite flight, although the company offers discounts.
JetSuite initially employed Embraer’s Phenom 100 aircraft, fuel-efficient and sized to accommodate just four passengers. Its bread-and-butter routes in the early days included destinations within the 300-mile radius of its home base at John Wayne Airport.
“Across the western United States, the cities are a right distance apart, and planes fly 25% faster in good weather,” Rabin said. “Orange County has a lot of potential customers who think similarly to us in terms of business.”
Rabin’s team uses social media to appeal to younger customers for whom flying on a private jet is typically out of reach. JetSuite offers its Facebook followers deals on “empty leg” flights—as low as $499 to book an entire plane. It also does specials promotions such as the “Indie Mogul,” a $9,999 four-person, round-trip package for people heading to the Sundance Film Festival in Utah, and a $3,998 charter to Coachella Music Festival in Indio.
“Our clientele varies from high net-worth individuals to a group of four college grads,” Rabin said. “They can take advantage of flying with no delays and no hassle associated with commercial flying, such as parking or security.”
JetSuite has seen its share of turbulence along the way.
Rabin devoted his efforts to JetSuite full time in January 2008. He immediately did an assessment of the financial status of the company’s vendors, and one of them—Adam Aircraft—raised a red flag. Rabin asked that JetSuite’s $2 million deposit be moved to an escrow account and found out that the aircraft manufacturer was filing for bankruptcy. JetSuite had no recourse as an unsecured creditor.
JetSuite got new investors in 2010: David Neeleman, a founder of JetBlue, Tony Hsieh of Zappos.com, and a private equity firm headed by Art Samberg. The three bought Proctor NBF’s stake in JetSuite and now own a majority of the company.
“I can’t imagine doing this without them,” Rabin said. “They are the most supportive investors you can imagine.”
Rabin and his partners now hold a minority stake.
Rabin was a partner at New York-based hedge fund Verity Capital before the JetSuite venture and “was responsible for portfolio management and development of Verity’s sector shorting strategy,” according to JetSuite’s website.
Rabin, who has a bachelor’s degree in industrial engineering and an MBA, has advice for up-and-coming entrepreneurs:
“Stay humble,” he said. “Hire great people, and empower them to be as great as they can be. People that work with you on your team are the people that will make you a success, or not.”
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