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By holding down costs and offering competitive rates, Steven Santo has grown Avantair into a growing company in the private jet business.
Steven Santo, a Brooklyn-born former New York prosecutor, realizes he is in for a bigger challenge these days, competing in the private air service business against NetJets, billionaire investor Warren Buffett's company with its fleet of 600 aircraft.
Santo, 41, chief executive officer and founder of Clearwater-based Avantair, has 50. But he is up for the challenge.
His strategy is using fuel-efficient, Italian-made aircraft to hold down costs so he can offer competitive rates. The Piaggio aircraft also offers larger cabins than some competitors and feature leather seats.
Like a timeshare, Santo sells fractional, or partial time slots, as low as 1/16th of the time, on each aircraft. That provides flexibility for companies or people that don't want the expense of buying and maintaining their own plane.
For example, to buy a 16th share would cost $425,000, allowing a company to use the aircraft for 50 hours annually. To buy that plane would cost $7.2 million.
So far, it's working. Santo has more than 350 employees and nearly 800 customers, many of them companies and individuals on the Gulf Coast.
Santo, a licensed pilot, started Avantair as an aviation leasing company five years ago with one aircraft. The Piaggio, made in Italy by Pierro Ferrari, of the Ferrari car family, has less drag so uses less fuel. That means that these aircraft can fly 1,500 miles before refueling. They carry eight passengers, plus a pilot and co-pilot.
Each aircraft is a turbo-prop with jet engines and rear-mounted propellers that create a quieter ride. It keeps its planes at St. Petersburg-Clearwater Airport.
Santo took the Southwest Airline philosophy and sought to bridge the gap between commercial and private flying as a low-cost private operator.
"We've done extremely well, even through tough times," Santo says. "People are looking for value."
Leasing time gives customers access to the company's entire fleet of aircraft, allowing Avantair to get the closest jet to the customer, wherever she is.
Owners can also sell their time to other companies. Avantair owners live in the United States, the Caribbean, Mexico and Canada. The company employs 280 pilots.
Avantair has a contract with Piaggio through 2013 to take delivery of a minimum of nine aircraft a year, which it adjusts, based on sales forecasts. It wants to keep adding aircraft so it can get geographic spread and reduce the cost of getting planes to customers.
Its profit margins on the fractional ownership and maintenance of the aircraft range from 10% to 15%.
Looking ahead, Santo sees consolidation in the industry as companies want to be more efficient and keep growing. With relatively high infrastructure costs, the industry is not adding new companies. And the company's biggest challenge has been raising capital. It has raised $70 million to buy planes and build infrastructure.
Its Clearwater home is a benefit because of a huge aviation workforce in the Tampa Bay area, some of whom used to work for commercial airlines Continental and USAir.
Married, and father of a 7-year-old daughter, Santo enjoys aviation more than law because each day is different and he is building a company.
"Professionally, it's more rewarding," he says.
The industry's customer has also changed. A year ago, Avantair was seeing mainly people who had never flown privately and were sick of commercial airlines. Now it is seeing those accustomed to flying privately coming to Avantair.
To keep and add those customers, Santo wants to stay with the Piaggio, but add larger aircraft so it can sell ownership to a wider variety of companies.
It also is considering acquiring a company to boost its growth.
- Dave Szymanski
INFORMATION
Avantair revenue
2008 $116 million
2007 $76 million
2006 $48 million
2005 $23 million
2004 $7.7 million
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