Ken Ricci founded Corporate Wings Inc. in 1981 with the goal of building a service-oriented executive transportation company that handled every aspect of modern aircraft operations.
Ricci chartered flights for a number of corporate clients and Corporate Wings became known as a respected company in the industry.
As time passed, Ricci expected his strong employee base, industry experience and long safety record to provide the company with a great base for growth. At the time, he had no idea just how far his knowledge of the industry and keen eye for market trends would take him.
We thought our 17 years of experience gave us a solid base for growth in the future, says Ricci, CEO of Richmond Heights-based Flight Options, a subsidiary of Corporate Wings. We had no idea where it would go.
Where its gone is landing Ricci recognition from Ernst & Young LLP as Entrepreneur Of The Year in the Specialty Services category, while the company continues its rise from its humble beginnings.
In the late 1980s, the concept of fractional aircraft ownership gained popularity among corporate executives who wanted a jet travel option other than buying an aircraft. Jet manufacturers quickly responded to the demand, but as Ricci watched the industry mature, he thought there was a better way to serve this niche.
So in 1997, he and his team began to research the concept of building a fractional jet ownership company using previously owned aircraft. Jets depreciate like cars do, but production cycles are much longer. Ricci reasoned that offering fractional ownership of pre-owned jets would be appealing to executives and much less expensive than buying into a manufacturers timeshare for a new jet.
When you buy a share of a jet, unlike when you buy a whole jet, they dont get to paint it in their colors and they dont have pride of ownership, explains Ricci. They dont leave their umbrellas on board, so theyre more inclined to buy for value than you would be a condominium or something like that. But the industry was started by the manufacturers, so nobody really ever thought it could work unless you were a manufacturer selling a new jet.
It all may sound logical now, but three years ago, Ricci was treading on entirely unproven ground. Still, he found investors and made the significant up-front capital investment such an undertaking requires.
Our risk was whether people would buy a share of a jet when it wasnt being sold by the manufacturer, says Ricci. Would they recognize there was value in buying a pre-owned aircraft in a share process, and thats really what our risk was. Our market research was obviously dead on.
Because there were already three fractional ownership companies in the industry, he realized the need to create exceptional value in his own service. Ricci was able to offer pre-owned jets for 35 percent less than the cost of comparable aircraft offered by other programs. To attract new customers, he also offered guaranteed immediate liquidity and a 30-day trial, a move unheard of in the industry.
In 17 months, Flight Options annual revenue jumped from $35 to $300 million, while Ricci estimates it will climb to $450 million within the next 12 months. Moreover, Flight Options is the fastest growing pre-owned fractional jet company in the United States and has captured nearly 38 percent of market share more than any of its competitors.
Word of mouth seems to be a big driver of Flight Options success, with more than 54 percent of the companys new clients referred by existing ones.
As far as being named one of the Northeast Ohios top entrepreneurs, Ricci deflects the credit for Flight Options accomplishments to the staff that has helped him build his company over the past 17 years.
It is something our whole company deserved, because certainly building what weve done isnt something I did by myself, he says. Being a finalist is an honor that I consider goes to our whole company.
How to reach: Flight Options Inc., (216) 261-3500
Jim Vickers ([email protected]) is an associate editor at SBN Cleveland.