Hello, this is your pilot sleeping; VistaJet and AirX Feud Continues

Jessie Naor (00:00)

Good morning and welcome to the VIP seat. Today is October 17th and in our top stories today, we're talking about the ongoing media battle between AirX and VistaJet and how 787 pilots may no longer be able to take naps in the cockpit. Your hosts today include yours truly, Jesse Naor and our co-host Preston

Preston, welcome back to the show. Episode number one and now episode number 10.

Preston Holland (00:20)

Jesse, thanks for having me back. I'm super stoked. To be honest with you, I've listened to every episode, not

I was trying to compare myself, but actually because I love the show. So it is an honor to be back on here. I hope that somebody out there in the World

Jessie Naor (00:33)

Thank you.

Preston Holland (00:37)

Web finds what we say interesting, maybe a little bit funny.

Jessie Naor (00:40)

But you know, we're gaining great traction. We've got a lot of followers now and every week it gets more and more. So thank you for the compliment and thank you for listening, everyone out there. All right, folks, sit back, buckle up, and let's take off.

so we've got one quick story update before we roll into the regular show content. So last week we talked about the FAA's Moss interpretation, which was threatening to basically devastate the maintenance organizations, apprenticeship programs, and a number of things. But it looks like, thankfully, enough pressure was applied by trade groups to the FAA, and late on Tuesday night they did issue a stay. So that's...

A massive

Preston. I'm sure you've been fielding phone calls and questions about this too over the last week.

Preston Holland (01:28)

have for sure. And one thing I want to say that I think a lot of four letter agencies,

especially in our industry catch some flack. They see big swishy salaries up at the top. They see private jet bonuses, which I mean, we work in private aviation, why would it not be a perk? We should be happy for that not necessarily criticizing. But I find myself in a lot of conversations with people and I even find myself kind of

Jessie Naor (01:51)

.

Preston Holland (01:53)

jumping in and saying, I'm not really entirely sure what all of our, these might be events companies masquerading as four letter agencies. But really this is a great example. There's been, I feel like there's been a lot of really good examples this year of the actual policy infrastructure of groups like NBAA, like AOPA, like EAA, a lot of the AAs, right? The aviation associations stepping up for,

what

best for our industry. And so I wanna give a special shout out to Ed Bolen and his team and the rest of the A's making sure that this happened.

Jessie Naor (02:31)

Yeah, it's a weird one because I I've read, I can't even tell you how many interpretation letters over the course of my career. And this is the first time I've seen the FAA so quickly go,

Wait, what did we put out there? So I think there's definitely been some sort of miscommunication or some misdrafting of language, but very impressed that they actually acted quickly. So I'll say give kudos to the FAA too, because they don't get to get a lot of kudos very often and they deserve it in this

case.

All right, so in our first story, I don't know if a lot of consumers realize this out there, but your pilot's probably napping in the cockpit, especially when they're on long haul flights. This is not okay under the FAA. It is allowed under European standards, many other countries. It's actually called controlled rest, so we have a nice fancy term for it.

And essentially what's happened is the 787, there was an incident about a year ago where when it decompressed, the cockpit door automatically swings open. That's just a safety feature, it's to decompressed the airplane. But when that swings open, apparently it's in close proximity to the head of pilot. So if a pilot is reclining back on their chair,

taking a little controlled rest, can potentially be struck even killed by the pressure of this door swinging in. So European carriers are getting mad at the FAA because they want to restrict the recline of that chair because they don't want pilots hitting their heads. But in Europe where naps are allowed in the cockpit, this is going to be a problem because it's going to interfere with their ability to take

nap. So Preston, what do you think? Nap or no nap for pilots?

Preston Holland (04:03)

I think that this is a classic case of the United States versus Europe. It all started in Boston with the Boston Tea Party. And here we are once again, the United States and the Europeans fighting over something that is a little bit

But honestly, I think me personally, the amount of technology that we have that exists and the amount of like what a lot of people don't understand if you've never sat in the front seat of an airplane, if you are a backseat rider,

whether that's on an airliner or on a business jet, you don't understand that like, there's a lot, before everything goes to absolute crap, there's a lot of alerts that happen that would wake you up, especially because we're not talking about somebody entering REM cycles and like going into deep sleep. We're talking about like, we're talking Sunday afternoon master's nap, right? Like very light and all of a sudden you hear the crowd roar and tigers walking up the 18th and you're like,

I'm awake, right? So there's a lot of things that will help wake you up in these scenarios. And I think that a lot of people don't appreciate that. And I think, me personally, I think the FAA is being a little bit too conservative. think that I, me personally, I'm a fan of NAPs. And if they're going to throw this AD that's going to really cause disruption in Europe, we might have another

Jessie Naor (05:17)

Okay.

Preston Holland (05:20)

Maybe the Europeans will start dumping pillows or something.

Jessie Naor (05:23)

That's great. Well, look, and let's just be honest, even if the FAA is not allowing it, and this was the same dispute that happened with medications for depression and other things, when the FAA doesn't allow something, that doesn't mean it's not happening. So if

look at the reality is that most pilots in the cockpit, they'll say, hey, yeah, go ahead and like doze out for 15 minutes. I got it, I'll watch you.

You know, look, there's a lot of research on this. I'm going to post some of that in the show notes so people can do their own reading. But for me, you know, I sat on the FAA's rest and duty committee for about two years. I think controlled napping is scientifically proven, to reduce issues, especially during critical phases of flight. You know, they're saying 78 % of pilots in one study were observed taking micro-sleeps when they were in a critical phase of flight. So...

If they're not controlling that nap, especially when we're talking about these super long haul flights, 19, 20 hours to get to Asia,

be real. You can't sit there and just stare at a screen in highly automated aircraft these days and not take just a little nap. It makes sense.

Preston Holland (06:23)

and one of the most critical phases of flight is at the end. So we would like you to be rested for that critical phase of flight.

Jessie Naor (06:30)

Yes, I want you to be alert and ready and overcome your sleep inertia and all the other things. But there are ways to do this. If the Europeans have figured it out, I think maybe the FAA should start taking a deeper look. And you told me something before the show too that I didn't realize was the difference between Europeans and Americans. You want to share?

Preston Holland (06:47)

So I don't know if this, so I did some like quick Googling to make sure that I didn't, wasn't totally crazy. I was reading, I was like deep in the internet threads and forums and stuff on Reddit and was hearing about like in Europe how it's pretty customary for the pilots to have one glass of wine with their food. I don't know if that's like, I can't imagine that's kosher or not.

but I think it's pretty common practice. I don't know. There's a lot of stuff that happens that people don't like. I think that this is one of the ones that I think we should be okay with. If we're gonna give ground on something, think micro-naps is a good one.

Jessie Naor (07:27)

Micro naps, sipping a glass of burgundy. can't say that I'm, I think that that's kosher, but it, I'm going to have to find a European long haul pilot to talk to one day and see if that's a, if that's a norm.

Preston Holland (07:36)

Yeah, exactly. Speaking of Europe, there's a little bit of drama going on. The

nap is caused by an airliner. This one's a little bit closer to our world in business aviation. VistaJet, the VistaJet AirX feud that we have been watching play out on LinkedIn, if you are a LinkedIn person in the business aviation, none of this is news to you.

But the Wall Street Journal has started to cover the VistaJet AirX feud. In April, Matthews, his employees and his company were named in a lawsuit, accusing them of quote, malevolent, negligent and egregious conduct designed to disrupt VistaJet's business and tarnish the company's reputation. VistaJet's suit, which was filed in Malta where AirX is based, which has been a point of contention, mind you, because there are some.

Jessie Naor (08:13)

Okay.

Preston Holland (08:28)

rules around how Malta divulges evidence and things like that is seeking $422 million in damages, which is almost as much as the EBTIDAR of VistaJet, which was $663 million and 22 and $704 million and 2023. So $422 million in damages based off of a WhatsApp transcript as the primary evidence. The Wall Street Journal

The suit not only involves the CEO Matthews, but also his employees. Last post was three months ago. So this is a bit of a crazy story, but it's not a crazy story that's new to anybody who's in the know. I know that I have multiple DMs sending multiple of Matthews articles

on LinkedIn to each other saying, yo, did you see this? So Jesse, what do you think? What's your take?

Jessie Naor (09:24)

Yeah, I mean, I think for a while, like everybody else, like, you know, sometimes people post stuff on LinkedIn, it's just really juicy and it's fun to read. It was that way for a while for me.

Preston Holland (09:31)

It is so juicy.

Jessie Naor (09:34)

I think it's lost its luster at this point, but it's funny because now it's like the Wall Street Journal is picking up this story and actually reading it. There wasn't a lot of new information in there because we've already seen it. We've already seen this back and forth. We already know about the case, but I think that's something that people should be aware of is that I've done it myself in writing articles using LinkedIn posts can now be used as content for writers. So that's, you may think, I'm just writing something.

Preston Holland (10:00)

or podcast hosts, hint, hint. Here we are talking about it.

Jessie Naor (10:03)

Or podcast and hint. So this is

data and information and people need to understand that if you're going to poke the bear, you may get more than you bargained for. But you know, I do think it's a little messed up. Matthews, the CEO of AirX, he was talking about how like, hey,

you should drop the suit for my employees. Like, if you want to come at me, that's fine, but leave the employees alone. You they're just kind of caught up in this with him, which to be fair, he probably shouldn't have gotten his employees caught up in something like this. But yeah, damages are a little tough, you know, you

you talk about people, you're opening yourself up to cases like this, unfortunately.

Preston Holland (10:41)

I mean, VistaJet has 350 aircraft, AirX has 17 aircraft. We're talking about David taking on Goliath, and we're talking about David getting out and basically saying, calling a lot of what is going on in kind of the VistaJet world and some of the financial question marks. He's been calling out.

Jessie Naor (10:47)

Yeah.

Preston Holland (11:04)

at first started pretty factual

then kind of it turned personal pretty quickly. Like I'm gonna read just so that for the people that are not aware, I'm gonna read a quote from his last LinkedIn post. I just pulled this up live in the air. So this is very quick. Flohr mastered the art of buying, this is a direct quote from John Matthews. Flohr mastered the art of buying aircraft guaranteed by VistaJet and selling them back to, you guessed it, VistaJet.

A round of applause for the kindness of the unsecured bondholders

to help Thomas to the Ford's temporarily billionaires list.

That's tough. mean, that's tough. That's probably coming out in court. And around the time that he was posting a lot of this, a lot of action was happening in the bond markets. Like there were downstream consequences to his posting on LinkedIn. I think that like there's probably some sort of a case there.

Jessie Naor (11:43)

Yeah. OUCH!

I there is, and to be honest, nobody knows what's going on inside of a company except for the company itself. And

be honest, building a fleet of airplanes takes a lot of cash and debt and loans we don't know what's gonna happen when Vista Jets first bond comes up in 2027. Are they gonna be able to pay it? Are they gonna refi? Like what is gonna happen?

Nobody knows that and yes, we can all speculate and have an opinion, but yes, when you start to affect people materially, affect their business and do it in kind of a personal way that's not just simple and fact-based and observation-based, you're gonna have problems like this, especially when you're a competitor. So as much as I understand where Matthew's coming from, he wants to protect the public. That's an honorable goal. He wants to tell bondholders, you know, they're taking this risk.

But at the same time, if you can't do

in a really, really controlled way, you're gonna run into trouble. But yeah, he hasn't posted in a while, so maybe he's not going to much anymore.

Preston Holland (12:58)

Yeah, three months. It feels as though his lawyer has probably finally gotten to him and said, shut the hell up on LinkedIn. Apparently it worked.

Jessie Naor (13:09)

Just leave it alone.

Yeah, but I will say, mean, for just this is VistaJets credit. Their flights grew 17 % last year in activity. They've increased their EBITDAR from 663 million to 704 million in 2023. Again, we have no idea what else is going on in the financials there necessarily, but Fitch is saying. They're growing, they're doing alright. They've kept their their ratings the way they are. We'll see.

Preston Holland (13:37)

Yeah, I so Jesse, I studied business in school. The R is a word is the letter that just throws me off on that EBITDAR for those that are that are that are not as adept earnings before interest, taxes, depreciation, amortization, what does the R stand

Jessie Naor (13:58)

I've always thought that was a placeholder for other non-events.

Preston Holland (14:01)

So here's how I understand it. The R stands for restructuring costs. I'm pretty sure R is restructuring costs. If it's not restructuring, it's something like that. Your cost of, yeah. So rent, I believe they're, I think they're using it as rent, which I wonder if that's pre-lease payments, which shows, because free cash flow was negative, but EBITDAR

Jessie Naor (14:08)

okay, yeah.

or rent.

It says restructuring your rent depending on the, yeah.

Hmm.

Preston Holland (14:27)

increased to 704 million in 2023. I don't know. It's interesting. But building a fleet is hard. And when Warren Buffett bought NetJets, what a lot of people forget quickly is that he bought NetJets out

pain. They were they were in a painful place. They were not. It was not a it was Warren Buffett does not buy your company. Because you're just absolutely killing it. He looks for companies that are trading below book value.

and then he had Jack's cash, right? That is like a core fundamental part of his thesis, especially around the time that he was buying NetJets. NetJets is now a great business and he and formerly Charlie Munger rest in peace would speak about how much it is a great business, but it took them a long time to get there. So VistaJet hasn't turned the corner maybe yet on spitting off free cash flow and being what Warren Buffett might consider a beautiful business, but NetJets

Jessie Naor (14:57)

Yeah.

Okay.

Preston Holland (15:23)

They're right behind net jets, right on their

So maybe they'll turn the corner.

Jessie Naor (15:28)

Well, and the tough thing in these business models is the depreciation factor. And the question is, and this is the unknown question that every accountant would love to answer is, is the depreciation of an aircraft 20 years? Probably not. So if we're looking at EBITDA here, we're not including depreciation, but you know.

we are including that in other metrics. So if they're depreciating the assets on a 20-year basis, but they can get 30 years life out of them with refurbs, the picture is totally different. But unfortunately, we don't know what that looks like over that 20 to 30-year period of the aircraft. I think if you choose the right platform, it makes sense. You're generating enough cash flows to overcome the depreciation factor of the assets. But...

If you're choosing an asset that drops in value by half after 10 years, then

no. I think that happened to a lot of operators.

Preston Holland (16:14)

Yeah, or 10 years running that thing 500 hours a year. I mean, it's totally different than 10 years running it 150 hours a year.

Jessie Naor (16:22)

and those are all the things that we don't know and we're not going to see until, you know, something happens one day. So, who knows if they'll be a success or not. But if you're going to throw shade, probably just do it in a really simple factual way and leave it at that.

Preston Holland (16:35)

Yeah, or just don't do it publicly. It's just not worth it. The downside risk is like, way is really high.

Jessie Naor (16:40)

Or don't, or don't.

so speaking of things that you shouldn't be doing, but are bold enough to do, there is an aircraft thief on the run in California. I find these stories so interesting. And also, I just want to give a shout out to Russ Niles at Avweb because he always gets the scoop. Like, he always has the interesting stories. When it's

odd and interesting, I'm like, it's Russ. Of course it's Russ. I have not. I would love to one day.

Preston Holland (17:01)

It's true. Have you ever met? Have you ever met Russ? It's yep. It is. It totally makes sense. Why? Why he gets the scoop. He's very Canadian and he also owns a winery. Fun fact. That's his side job. So

Jessie Naor (17:10)

Yeah.

Well, good job, Russ, on pulling this one out. So in Sonoma, California,

would be airplane thief failed to make off with not only one but two airplanes on Sunday morning this week. The man tried to get into the aircraft while it was idling and a mechanic was working on it. The mechanic kicked the man away, but that didn't deter him from trying to steal another airplane inside of the hangar. Apparently he had gotten through an area of

brush that had been cleared to make way for a new fence, but he is still at large and on

run.

Preston Holland (17:46)

a new definition for through the fence agreement, right? So yeah, I think, so I have a couple of questions here. Here's one of my big questions. What was he trying to steal? Like, was he trying to steal like 210? Was he trying to steal like a glass air or like a RV12? Like, what were you trying to steal here, buddy? And also, what was the plan? Like, if you fly airplanes, like if you,

Jessie Naor (18:07)

Bye.

Preston Holland (18:12)

could probably get it off the ground, right? Like, what was the plan here? Where were you going to go? Like, it just feels like this was not a very well thought out plan.

Jessie Naor (18:20)

Well, this is not the first time this has happened recently. mean, just at my home airport. Actually, we may have covered it on that first show. There was someone who got into a Gulf stream and was going to take it off. think, yeah, unfortunately, there's situations, I think, of mental illness or whatever is going on in their life where they just say, I'm going to go steal an airplane and be a DB Cooper for the day or something. Actually, I was looking at the picture because at first I thought he had a parachute on his back, but he actually didn't. It's just a backpack.

Preston Holland (18:27)

Yep, we did.

Jessie Naor (18:45)

If he had the parachute, that would have been pretty cool.

Preston Holland (18:46)

Yeah, I mean, he looks ready for adventure. I'll say that. mean, he's got his boots on, he got his blue jeans on, he's

to go for an adventure, but I don't know. okay, here's, let me, I just wanna read my favorite quote from this story. Quote, the mechanic, quote, kicked the man away and yelled at him to leave, but he was

Like,

If you're the mechanic in this situation, first of all, not your airplane, right? So, you know, a little bit less like, yeah, exactly. Like, I think there's a fair amount of people who are probably like, yep, not my airplane, not my problem. But it, I think that that was the, he kicked him, kicked the man away, yelled at him to leave, but then he was undeterred. And then he went and tried to get another one.

Jessie Naor (19:12)

Okay.

Yeah, kudos to him for using physical force, I guess.

Well, you know, these airports,

so easy for this to happen. People just don't realize it. Maybe I shouldn't be saying that on a podcast that people could listen to and get ideas. But airports need to take their fences seriously, you know, and it's not only

it's deer, it's wildlife, like check your fences. That's just the minimum amount of security.

Preston Holland (19:53)

My favorite part about a lot of airports that I visit, especially call it like the very GA airports, right? Like if you got commercial airliner service and TSA, a little different. But

a lot of the GA airports, it's real tough to like get to the field if you're like a legitimate person. But then you look across the way and it's like, look, there's the street, a hill and the runway.

If I just wanted to be a bad person, I could just run down that hill and get to the airport. But since I'm going the legitimate way, like this is kind of a pain in the butt. Like I gotta go in, I gotta push the button, they gotta unlock the door, then I gotta go in, I gotta talk to the person at front desk, then they gotta push the button again and I can go out.

Jessie Naor (20:30)

Thank

Preston Holland (20:38)

like, but if you're a bad actor, you just run down that hill. you know, so make it hard for the good people, easy for the bad people.

Jessie Naor (20:46)

Yeah, let's maybe like focus our energy on just, you know, really solid fencing the barbed wire, the razor. I don't know what it be, how hard should it and can it be? I don't know, but it's a problem.

Preston Holland (20:55)

Yep, absolutely. And the speaking of import

infrastructure, jet in and jet out used to be jet in and jet out. It is now just just jet out. Also, here is a public service announcement. And this is coming from a fellow industry member, somebody who

Jessie Naor (21:12)

Thank

Preston Holland (21:18)

in the marketplace. Can we drop the jet?

blank naming convention, because it's getting very confusing. You've got Jet Access. You've got Jet Smarter. That's a software. You've got Jet In, Jet Out, Jet It, Rest In Peace. Jet Aviation, which is just two words about airplanes smacked together. I'm trying to think of Executive Jet. Yep. Yep, Executive can go with Jet.

Jessie Naor (21:40)

Executive jet executive jet because executive gets in there a lot too, so I think executive can go as well potentially.

Preston Holland (21:48)

which is hard to say, but cool concept. Good friends of those guys over there. Jet, let's see, what other jet? There's a lot of them, right? So can we please stop using the jet blank? Kind of like how tech companies quit doing the if I, like Shopify, Spotify, all the if I's. Like they quit that because they were like, there's too many of these. Aviation, we have too many jet blanks. Okay, that's my rant of the day.

Jessie Naor (22:08)

Mm.

No, we do. And I will say this because I think like, I don't know, when we first started Grandview, that was my thing. I was like, it can't be Jet, it can't be executive because that's the same fricking name that everybody else on the planet is. It's not differentiated. So Grandview, look, I'm not saying it's that creative of a name necessarily, but at least it's different. But one of the Jet Smarter guys.

Preston Holland (22:31)

It's more unique than executive and jet, jet executive, executive jet.

Jessie Naor (22:37)

But one of the Jet Smarter guys kind of like made fun of me one time. He was like, Grandview, is it? And I was like, well, at least my name doesn't have a name in it that everybody in the planet does. That's like fun.

Preston Holland (22:46)

Exactly. Yes. So it was unique. And it made your call signs easy too. So anyways, the group that operates JetOut and

opened their FBO terminal in 2023. They have sold their FBO in Milwaukee to Jet Aviation. JetOut is not a fractional ownership, but a tenant in common co-ownership model.

Jessie Naor (23:10)

Okay.

Preston Holland (23:10)

Fun fact, they fly all of their flights under part 135. I actually had these guys on a podcast back in the day and they are very driven, very smart. And that 135 piece is kind of one of their big differentiators. It's a safety thing for them. But one of the private jet car comparisons quotes was, jet out saves money by owning its own FBO at MKE. It has in-house maintenance.

It only flies new, more reliable, efficient aircraft and that are under warranty. Currently the CJ-4 Gen 2 and I think that they are migrating their fleet from the TBM 940s that they had into Citation M2 Gen 2s. I don't know how that is coming along,

I know that that was the plan. And if you estimate the residual value of the contract, 250 hours of flying per year.

It's around $4,200 per hour on a light jet. Jessie, the former operator of many light jets, what's your take here?

Jessie Naor (24:12)

Yeah, you know, it was interesting because looking at this, was like, that's conceptually this all works. When I started reading through what the concepts were, and I saw a lot of similarities in how we had built our model. You know, we had these large bases, you know, even as

started to scale across the country, we were never really a floating fleet.

I feel like every time we tried to play that game, we just could never make the numbers work, the empty legs, the inconsistencies of crew scheduling and everything else. So how I was going about scaling was saying, okay, we're gonna have super hubs all across the country where all the airplanes will come back. You got the fuel discounts, you got the maintenance personnel there to do things and check. So, makes sense, but now that they don't have the FBO, they're going to potentially lose unless they have some deal worked out.

on the fuel side. There's a huge variance in fuel costs when you're controlling it yourself versus just buying it from an FBO. The numbers, they work. They could potentially work. I just want to know why they would make this shift. Maybe Jet Aviation made them an

they couldn't refuse. But it seems like that's a bummer. It's nice to have that FBO in your portfolio when you're in a charter world that's declining, honestly.

Preston Holland (25:19)

Yeah, it, it's a little bit of a hedge. you know, it, it's funny. I, during,

during some political stuff, I had text, the COO at jet, jet in, jet out and was like, Hey, is Trump on your ramp? And he was like, well, he was supposed to be, but, he had to go over to like the big military hanger because, know, he's, his security detail has significantly, upped. And so.

I mean, they had a 10,000 square foot passenger terminal, 40,000 square feet of hanger, 10,000 square foot maintenance shop, three acres of ramp space, which is fantastic. I wonder, so Jet Out recently expanded to Florida, super focused on the CJ-4. Matt Wild is the COO over there and he was talking about

Jessie Naor (25:57)

Mm-hmm.

Preston Holland (26:08)

know, some of the efficiencies of having two hubs because a lot of their customers were like, they are doing it a controlled growth way where they have a lot of customers that are taking the leg from Milwaukee to somewhere in Florida. They're doing, you know, shared seats and things like that and charging clients for the repositioning back to the home base, right? So I think that,

Jessie Naor (26:20)

Okay.

Preston Holland (26:35)

I wonder if the strategy is now shifting. I don't know. I would imagine that their client base is in Milwaukee. The interesting story about Jet Out that I think not a lot of people know is that it started as a corporate flight department and then evolved into a co-ownership group when basically they had a corporate flight department, they had the operational chops, the operational know-how, and somebody, know, a couple of friends in business were like, hey, can we, you know, can you manage our airplanes? And it kind of, be, it,

Jessie Naor (26:52)

Okay.

Preston Holland (27:03)

morphed and grew into what it is now as opposed to somebody sitting down and basically saying, I'm going to go start a shared ownership company, right? So I don't know. We'll see. I have a couple of clients that have flown charter with them, said that the airplanes are really nice and that the service is great. So wishing

all the best in their continuation.

Jessie Naor (27:26)

Yeah, I mean the CJ-4

a good platform. know, that's I think for the segment that they're going after. Good airplane, good reliable airplane, popular. And if they can continue to edge out people a little bit on price, you know, that's the game.

but you know, maybe that personalized service, a little bit of savings will do things. You know, it'll be interesting to see though as they scale, because there's a big difference from operating two bases, and then three bases, four bases, but you know, it starts to get more and more and more complex. wish them luck. And I certainly, I had not heard of them until this article came out. So they're...

doing a job of staying under the radar. I read that in one of the articles that was their

for the time being.

Preston Holland (28:03)

Yep, they're great. And Joseph, the CEO over there, he is a sharp cookie and a pilot. He could fly all the airplanes if he wanted to. He chooses not to, but he was like, if I wanted to jump in the CJ-4, take off, we could go. So that part's really cool. yeah, good operation. Hopefully they got paid more money than they could imagine to sell their FBO.

Jessie Naor (28:29)

I'm sure they did because unlike a lot of parts of our market right now, that's the one place that money seems to be flowing into is the infrastructure plays. And actually someone asked me this last week, know, because someone made an announcement about getting, you know, private equity investment and I'm like, well, they're not really going into the charter space right now. So, but they are going into the FBOs, maintenance repair organizations. So at least that's going well.

Preston Holland (28:50)

Yeah, I got asked, I was at an event last

with a lot of private equity guys and gals and one of the, somebody came, they knew that I was the private jet guy. I was the private jet guy at the event. so like, know, kind of turned it's burned down. And one guy comes over to me, he's like, why don't you just go roll up all these FBOs? I was like, brother, you are behind the ball if you want to actually do it for real.

I was like, your play would be how far in front of KKR and BlackRock can you get, package them up in good enough markets and sell back to them. But I was like, they're already a little bit in front of you. So there's a lot of movement, but where the big guys go, a lot of the little guys follow. And so the infrastructure plays MRO,

Jessie Naor (29:29)

Yeah.

Preston Holland (29:36)

software. mean, software is killing it right now in aviation. mean, you've seen six or seven transactions this year.

in a world that doesn't have a lot of providers.

Jessie Naor (29:46)

Yeah.

Yeah, yeah. Well, look, mean, investors are hungry for something that makes sense. You there's still a ton of dry powder, but you know, I think after wheels up and some other things, they're a little skittish of charter market right now. And just because wages have gone up, fuel has gone up, know, everything is in a negative cycle right now. But hopefully coming back soon, we pray.

Preston Holland (30:07)

Yeah, speaking of things that scare me, scare people scare me. Hot air balloons. Yeah, I've actually never been in one. My dad owned a remax franchise. And one of the perks if you own a franchise and you hit some sort of numbers is they bring a remax or they used to bring a remax hot air balloon to your like local fair or whatever. And I was like, Nope, I'm good.

Jessie Naor (30:11)

Nowhere.

Preston Holland (30:28)

for this exact reason. So tell us about what happened at the,

Jessie Naor (30:30)

Thanks.

So the Albuquerque Festival, which is the big one where everyone takes this beautiful image of, you know, 100 plus balloons, I 106 this year was their plan. One of the air balloons or hot air balloons collapsed a radio tower on Friday,

was not the first time this radio tower has been struck. I mean, it's amazing what happens when you fly something in the air that has absolutely no flight

surfaces and it runs into stuff.

Preston Holland (30:55)

Wild. Who would have thought?

Jessie Naor (30:56)

Wild, who knew? Yeah, it goes slow and I know there's like a little bit of control. I'm sure anyone who operates a hot air balloon is like really mad at this right now.

Preston Holland (31:02)

They're all screaming. They're yelling at, they're yelling.

Jessie Naor (31:06)

How dare you? Surprisingly, when I started to research

because I think a lot of people are like, no, I'm good, I don't really want to go in that, not many fatalities. And I don't know if it's because there just aren't a lot of people flying in hot air balloons, because it does say that 83 % of crashes that hot air balloons are involved in have serious or fatal outcomes. So if something does happen, it generally goes wrong. Fortunately in this case, and

in years prior when it had already, when it ran into another tower, no one was injured. I think people had to crawl down the tower the first time this

which seems terrifying in its own right. But everyone was okay, and I've just reconfirmed that I'm not getting in one of those, I don't think.

Preston Holland (31:49)

Yeah, okay, so I've got a few lines. To me,

is like right on the border of the line, right? Like cloudy day, helicopter, not going. Questionable operator, definitely not going. I personally like to glide. I'm a fixed wing guy. But also, gliders is kind of outside of my go zone as well. I don't have any desire to do that. The backpack.

the backpack parachute thing where you wear a lawnmower on your backpack with a parachute up top. That's outside of my, that's outside. It lives in the same place as balloons in my mind,

for me, it's gonna be a no for me dog. Like, it's just, no thank you.

Jessie Naor (32:27)

The one exception I would make, and I just don't know if I'll ever do it again, I did go sky diving one time because I had to knock it off the bucket list It sounded like a great idea until I was on the edge of the aircraft falling off of it, and then I was like, this was a terrible idea. But I did it. But the one thing that I thought, and I probably will never muster up the courage again to do it because I've already done it, it scared the buh-Jesus out of me.

Preston Holland (32:32)

That's way outside of mine too. That actually might be worse for me.

Mm-mm. Mm-mm.

Jessie Naor (32:54)

But if you jump off a hot air balloon in a parachute, you really get the experience of falling because you're going from zero to like 120 instantly, or not instantly, but over a period of time versus when you jump out of a moving aircraft, your terminal velocity is like almost the same. So you don't, you're just instantly like at that speed or close to that speed versus a hot air balloon where you're literally tumbling out of the sky. So actually, now that I say it out loud. No, I don't want to do that either.

Preston Holland (33:06)

there's like, yeah.

Yeah, no, you're not selling the dream of skydiving out of a hot air balloon for me, not going to lie to you. Yeah, and here's the other thing is like, I don't know, like what happens if like, like you can't add weight up there, right? Like that's the thing that also freaks me out a little bit is like, you're up there, like you can't be like, the sun has come out and is now heating up the hot air balloon for us to continue up. It's like,

Jessie Naor (33:24)

Thank

Well.

.

Preston Holland (33:48)

All right, we're going up, right? Like you can't just be like, let's add some sandbags.

Jessie Naor (33:51)

Well, I they throw the bags over though. Like what does that do? I've always, we need to investigate this more. Like they throw them. I think it does something. It doesn't make sense to me.

Preston Holland (34:00)

If you know a lot of stuff about hot air balloons, you should hit one of us up on LinkedIn or Twitter. Jessie is Jessie Naor I am Preston Holland. I'm on Twitter at PrestonHolland6. Don't look me up on Facebook, I'm not very active there. And my Instagram is just pictures of my wife and kid. So probably not gonna be active there either. But let us know about your hot air balloon experience. And maybe, just maybe, you'll get featured in

Jessie Naor (34:08)

Good luck.

you

Yes. And I will say too, Preston has an awesome newsletter that I'm going to throw up in the show link as well. Check that out. But with that, we'll wrap up the podcast today. It was

Preston Holland (34:28)

the next newsletter.

Jessie Naor (34:39)

lot of fun. The VIP seat is the fastest way to get your top news in business aviation. Don't forget to subscribe to our weekly newsletter. It's a simple version of the podcast, literally every article that we've talked about in three sentences or less.

comments and suggestions are always welcome, but we'll see you next time on the VIP seat.