Two months after a slump in business led Flight Options to eliminate almost 200 pilots and other employees, the 10-year-old company has turned for leadership to its founder.
Kenn Ricci has returned to Flight Options as chairman of HIG Transport Holdings of Cleveland, the private-equity firm that has the largest stake in the fractional jet ownership firm.
Flight Options also replaced its chief executive, S. Michael Scheeringa, with another returning officer, Mike Silvestro.
Flight Options provides fractional ownership and flights in luxury jets, typically to C-level executives with an average net worth of million. It´s based at the Cuyahoga County Airport.
Despite their wealth, Flight Options says its clients have cut back on travel as the economy has cooled and jet fuel prices have climbed to new heights. Business so far this year is down 15 percent from the same period in 2007, spokesman Dennis Baker said.
However, an executive of top competitor NetJets recently told MarketWatch that the fuel pressure has actually increased demand for fractional ownership of business jets as big corporations find it more difficult to get their boards´ OK to buy new aircraft.
NetJets in March announced a $ 200 million, 800-employee expansion of its operations at its Columbus base.
Ricci, Scheeringa and Silvestro were not available for comment Tuesday. The board of Flights Options´ parent company - HIG Transport Holdings - voted to replace Scheeringa, Baker said. Ricci has a seat on the board. Flight Options said it would not release the names of the other directors.
Scheeringa isn´t going completely away: He´ll remain as a Flight Options investor and strategic adviser.
And Ricci isn´t coming from far: After leaving Flight Options six years ago he held several positions, including that of principal in another private-equity firm that has a share of Flight Options, Directional Aviation Capital of Cleveland. He´s also listed as chief executive officer of Mercury Air Centers, which describes Flight Options on its Internet site as one of its portfolio companies.
Silvestro was Flight Options´ vice president of sales and marketing for five years before leaving in 2005 for an executive position with CitationShares.
A third private-equity firm that owns the balance of Flight Options is Cleveland-based Resiliance Capital Partners, which former Oglebay Norton Co. Chief Executive Michael Lundin recently joined as an operating partner.
The complex web of ownership and investment is part of a concentrated, highly competitive industry dominated by just four companies nationwide.
Warren Buffett´s Berkshire Hathaway owns NetJets, the biggest fractional jet company, with about 7,000 employees, followed by Flight Options, with about 1,000 employees. The others are CitationShares, a division of Cessna Aircraft Co. headquartered in wealthy Greenwich, Conn.; and Flexjet of suburban Dallas.
Flight Options said in a statement that Scheeringa, during four years as chief executive, oversaw an "extraordinary" turnaround.