Want a luxury jet? Steve Varsano has built a showroom that can help
- 15 November 2013
- From the section Business
"When you're flying private, you're not faking it," goes the saying.
If someone is spending tens of millions of dollars on a private jet, you know there has got to be serious money behind them.
But, as aircraft dealer Steve Varsano says: "Don't forget the extras."
Once you've got the jet, there's the running costs - the fuel, the pilot, the insurance. "It can add up to thousands of dollars an hour."
But if you have the cash, London-based Mr Varsano has the aircraft.
He runs the world's first - and, as far as he knows, still the only - street-level retail showroom dealing in the sale of used and new private jets.
It includes a full-size mock-up of an Airbus ACJ 319 business jet cabin - the real thing costs about $60m (£37m), plus $30m to fit out - filled with all that the discerning private traveller needs:
- a pop-up video screen
- cigar box and bar
- sound system
- space at the back for a bedroom
- a coloured lighting scheme to soften the mood
- soft carpet
While you're sitting in the luxury leather chairs - $40,000 each, since you ask - you can look through the cabin windows at a video-simulated sky as if you're flying through the clouds.
The whole place is spotlessly clean and oozing wealth and sophistication. And that's exactly what Mr Varsano wants when the energy billionaires, corporate chiefs, and celebrities walk through his door.
The Jet Business is at Hyde Park Corner, in a part of London that has become a magnet for the super-rich.
Mr Varsano, pretty wealthy in his own right, lives just around the corner in exclusive Mayfair, with his girlfriend Lisa Tchenguiz, sister of the property tycoons Vincent and Robert Tchenguiz.
Mr Varsano reckons that just about anyone who might be in the market for a private plane eventually passes through central London.
"That's why I chose the best location in world," says the New York-born entrepreneur. "If I was trying to sell to these people in their own country, I would be travelling permanently."
The Jet Business opened two years ago, although Mr Varsano has been in the industry for almost three decades.
For mere mortals, private jets are the ultimate luxury accessory. But Mr Varsano insists that for his clients they are just time machines.
"They want to cut down on dead time. These people might be in the air once, twice a week. It's about convenience. It's about getting a deal done - perhaps at some distant airport - and going home," he says.
So, private jets are just a functional tool, then? "The view that it's all about flying off on a skiing trip with champagne and girls is just so untrue," he says.
About 80% of Mr Varsano's deals are for used jets. New ones can take months to deliver, and he finds that people with serious money to spend tend to want something within weeks.
The showroom has pretty much all they need to make a choice.
Next to the Airbus mock-up is a room with a huge bank of screens running the full length of the wall. This is where prospective clients weigh up their options.
At the touch of an iPad, clients can run through a range of makes and models, prices, age, range, running costs, and view pictures.
A full-scale schematic of the length and height of the aircraft can be brought up on the wall. "You can stand against the screen, or walk the length, and get a real sense of a cabin's size," Mr Varsano says.
"I like to let clients just play around with the iPad. It's an educational tool. Most successful people don't like asking stupid questions. But in our business most people don't know what questions to ask."
Once a client has made a choice, tap the iPad again and a menu of dozens of for-sale aircraft located around the world appears.
All this information is gathered and processed by staff who sit at desks resembling aircraft cock-pits.
"You'll never find an airplane for sale in the same country as the buyer," says Mr Varsano. Deals can be complicated.
One sale involved a businessman from Eastern Europe, who was then in Austria. His jet was registered in Switzerland but owned by a Panamanian-registered company. The buyer was in China, who had the aircraft's inspection done in Germany. The lawyers were in London. "There was a lot of paperwork", says Mr Varsano.
Now aged 57, he got hooked on aviation after a flying lesson at 14. He has a pilot's licence, although no longer takes the controls. Instead, he thinks a lot about space travel in his role as a director of Richard Branson's Virgin Galactic.
After a degree in aeronautics, he worked as an aviation lobbyist in Washington. That's where he honed his schmoozing skills.
Mr Varsano enjoyed rubbing shoulders with the powerbrokers on Capitol Hill almost as much as he now enjoys dealing with the super-rich. "They are some of the most successful, most demanding people in the world. And it's fascinating." Mr Varsano does not name names for confidentiality reasons, but his off-the-record list of clients is impressive indeed.
After lobbying, he joined a firm selling jets, including in the 1980s to billionaire US financier Nelson Peltz, whose company he eventually joined, helping to run the division that owned the KFC and Pizza Hut brands.
He then made a small fortune in the private equity.
I took Mr Varsano three years to think through what he wanted to achieve with The Jet Business.
He says: "It always amazed me that 99% of the people do this business over the phone. That's ridiculous. You shouldn't be trying to sell someone something that cost $30m, $40m, $50m over the phone.
"I really made a huge investment here. A lot of people thought it was stupid."
He admits to feeling very worried during the first months of trading. "It was my money; my heart." But things are now going well.
"Deals take time to come through. Now I've got a pipeline of work, and have just started to see repeat business."
A decent second-hand jet can sell for between $10m-$80m depending on the range and capacity, but there are private aircraft worth $200m-$300m flying the globe. Gulfstream, Bombardier and Falcon jets are the mainstay of his business.
During the global economy's boom years, pre-owned jet prices surged thanks in no small part to Russians entering the market with the vast wealth generated from the country's natural resources.
"The Russians went out and started buying planes left, right and centre," Mr Varsano says. "They couldn't pay a high enough price, because they wanted something today."
Prices have now fallen, but he sees no let-up in demand. What's more, the trend is for more expensive larger, longer-range jets as dealmakers traverse continents in search of their next billion.