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The Mello Millionaire with Tommy Mello
The Sky Isn’t the Limit—It’s the Market. Dominating the Private Jet Industry with Steve Varsano
00:43:38
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- [00:00]
Steve Varsano
Failure is not the opposite of success, right? I mean, failure is a stepping stone to success and you're going to have plenty of failures to get to your success. So if you're not failing, you're not trying hard enough.
- [00:14]
Tommy Trip
Ambitious, elite, influential. Our guest today is Steve Varsano, a pioneer who redefined the business of private aviation.
- [00:23]
Steve Varsano
You know, the harder you work, the lucky you get and, you know, more shit happens.
- [00:28]
Tommy Trip
Over the past four decades, Steve has brokered billions in aircraft sales, served on the boards of Virgin Galactic and Exojet, and held executive roles spanning Europe, the US and beyond.
- [00:37]
Steve Varsano
People love feeling good about themselves and the way they do that is by buying a luxury product.
- [00:43]
Tommy Trip
He's also the founder and CEO of the Jet Business, an advisory company focused on the sale of large cabin and ultra range private jets.
- [00:50]
Steve Varsano
Brand is everything today.
- [00:53]
Tommy Trip
Get ready. This conversation will teach you about the business of selling to the elite foreign. Welcome back to the Mellow Millionaire. Today I got Steve Varsano here. This is going to be an awesome podcast. He's a founder and CEO of the jet business. He's a pioneer who redefined the business of private aviation. Over the past four decades, Steve has brokered billions in aircraft sales. Pleasure to have you, Steve.
- [01:20]
Steve Varsano
My pleasure. Thank you for having me on.
- [01:22]
Tommy Trip
So the Jet Business is a brokerage and advisory company focused on large cabin and ultra range private jets. It sounds fantastic. I've done my fair share these last couple years of private jets. I haven't purchased anything yet. Can you explain to us a little bit more about your business, how you got started and what you're looking forward to?
- [01:42]
Steve Varsano
I got my degree in aeronautical studies at a university called Embry Riddle Aeronautical University in Florida. It's really the sort of Harvard of aviation. And after I got out of there, I got a job on Capitol Hill radio representing all the airplane manufacturers as a lobbyist. It was a great job, but it didn't pay very much money. So I was working at night in my roommate's nightclub that he owned, and during the course of being in a nightclub, I ran into a guy who used to come in with a tie with a jet on his tie pin. In the old days when you used to have tie pins and ties. And I asked him why he's wearing, you know, a jet on his tie, and he told me he sold planes. I was like, really? It was so weird to me. I was 21, 22 years old, and after a few months he was coming in there showing off his commission checks. In the old days when you used to actually have checks and showing me how much money he was making. And I was like, okay. After three or four of those, I said, enough is enough. I mean, where the hell do you work? I want to come and get a job there. So I convinced him to get me into see his boss. I saw his boss, the guy said, I'm not going to hire you. You don't have any sales experience. And I said, listen, I got you listening to me for two hours. So obviously I got something in my DNA. And I said, I'll tell you what, just let me get on board and you don't have to pay me. And I convinced him to hire me for free till I sold an airplane. And that was 40, 40 something years ago. So that's how it got started.
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Tommy Trip
Yeah, I know. Your first sale, I was watching that the Venezuela gunpoint that you had to pay them some commissions.
- [03:14]
Steve Varsano
Well, they wanted me to. I escaped. I didn't pay them. We were signing a deal with a Venezuelan buyer. He had two of his henchmen representing him. We signed the deal. They were transferring the funds. We were flying the airplane to Miami. We were halfway from North Carolina to Miami. And the two people on the plane with me said to me, steve, we have to talk to you about something. I said, what's that? He said, we want to get our commission. What do you mean you're going to get your commission? You're representing the buyer. There's no commission for you. No, no, we need to get our commission. I said, no, there's no money for you. He said, well, don't worry about it. When we get to Venezuela, you'll be able to go back home after we get our money and everything will be fine. That was a hell of a first encounter to, to get into the business, that was for sure. I thought I was going to die. I was going to get cut up on little pieces in a box and get sent home.
- [04:04]
Tommy Trip
Is the way that it works. Is it like commercial real estate is like 3%? Is that the fee?
- [04:09]
Steve Varsano
No, it's weird. I mean, there is. There is no set number. And it's quite funny because it's not like property real estate. It's not like yachts. There's no industry standard, you know, runs anywhere from, you know, 1 to 4%, depending on. On the value. Obviously, the higher the value of the airplane, the lower the percentage. And we built this showroom basically to give us a usp, you know, the unique selling proposition that differentiates ourselves from everybody else. So we believe really in educating our client and Empowering them with enough information to make an intelligent decision. Not say, you should buy this, or this is the price of this. You know, really educate them. And there was an old clothing store in, in New York when I grew up. Guy named Si Sims had a store and his advertising moniker was an educated consumer is our best customer. And for some reason, I don't know why, but that saying always stuck in my head. And the way I feel is if we really educate the customers so well that, and answer every possible question that they could have, they move forward much easier and more confidently because if they don't have all the answers to the questions, usually they're hesitant or don't move forward. And we can get a deal done much quicker and at a better value if. If it's going through an education rather than just trying to sell them something on, you know, on price.
- [05:30]
Tommy Trip
So you've been doing this over 40 years. And we were talking before the podcast. You obviously love what you do. Sounds like it's. It's a lot of hours.
- [05:40]
Steve Varsano
Yeah, it is a lot of hours. Listen, I mean, you know, people talk about this, you know, homework balance, you know. Well, yeah, I guess I have a homework balance, but it's not 50. 50. It's 100. 100. I really, you know, definitely the definition of my life is work hard and play harder. So being in London basically allows us in the morning to be working in Asia, and then in the afternoon in the Middle east in Europe, and then as the afternoon goes on, in the evening in America. So we really can cover the whole globe from morning to night on a time zone that's good news and it's bad news. So, you know, we're always connected around the world. So depending on where the clients are, these people obviously don't really care what time they call you. If you pick up the phone, that's great. And if you don't, they'll call somebody else. So, you know, I pick up the phone as soon as it rings, no matter what, where it's coming from, no matter what time of day or night it is. And it really doesn't bother me. I really is part of my lifestyle. It's. It's part of the drug to being in this business. And, you know, you never know who's going to call you. Sometimes I look at my phone at the end of the day and, you know, shock myself. I'm, you know, kid from the streets of New Jersey who, you know, is waiting tables and busing tables, and then I'm. And I'm Looking at my phone, looking into some of the names of the people I've talked to.
- [06:54]
Tommy Trip
How much does social media influence your business?
- [06:58]
Steve Varsano
Because of the showroom concept, which I started about 12 years ago, we always had a different presence in the media because of the showroom. A lot of standard or usual media of newspapers, magazines, tv. They would always do stories on us because we have such a crazy idea of a store. And so we always got a lot of promotion from that. Everybody in our industry knew who we were. When we started with social media, I was quite shocked, quite frankly, to see how the algorithm caught. And we got unbelievable traction. We're now up to about 300 million views and about 5 million followers and we've actually sold some airplanes from it. To tell you the truth, I'm, I'm getting so much more satisfaction now when I have all these young kids come up to me and tell me that they're being inspired by watching what we're talking about. And, and you know, I got this job because of what you said. I went to the school because of what you said. I, I, you know, I negotiated this deal because of what you said. Quite frankly, before I started social media, you know, I was, you know, I want to do deals, I want money. This is my main interest. That's all I want to do. But I've actually discovered I have this other side of me that has a huge satisfaction knowing that I am helping the younger generation and somehow inspire them in work, in home, in friendships and just the way they carry themselves and work ethic.
- [08:31]
Tommy Trip
So you said you play just as hard as you work. What do you do for fun? What does playing look like for you?
- [08:39]
Steve Varsano
Well, my other half shot, she here in London is probably the most social woman in London. So literally six nights a week we are out. She is in charge of my life after 8pm and before 8pm, I'm the king of my castle. And literally she's calling me up at 7 o'. Clock. I'm coming to pick you up at 8, 8:30, 9 o'. Clock. And I say, okay, what's the dress code and where are we going? I must say that I am fortunate enough that our social circle is also part of the people I do business with. Especially in the summertime when we're traveling through different places around the med south of France or in Italy or Greece, we're traveling a lot and we're going to some amazing, beautiful, luxurious, exotic places. But that's where a lot of my clients are too. So even though I'm out In a beautiful place. I'm still working all the time. I'm on the phone, I'm on zooms. I'm meeting with people and trying to blend in in the social world, but my main focus is always around the business.
- [09:38]
Tommy Trip
How do you balance that? Because it's something that I'm trying to build this life I want. I'm 42. I figure by the time I'm 45, because we're private equity backed and, and they like you to work a lot, as you can imagine. And I'm fine with it. I enjoy what I do. But how do you balance that? Just how much you like to sleep?
- [09:59]
Steve Varsano
I'm now much more and more and more into longevity anti aging programs and a lot of stuff. And, and they tell me that my, my biggest thing I have to do is increase my sleep, that you should be getting between seven and eight hours and it really destroys your cognitive functioning whether you think it is or not. So I'm trying to push myself up to that seven hours average, but it's hard and, and there's just not enough hours in the day. After I started selling jets, I went to work for private equity guy. In those days it was a corporate mergers and acquisitions takeover activist and they used to call merchant banking. And I worked for him for 17 years. And that literally I was working around the clock as well and traveling everywhere. But you know, my whole life was focused on doing the impossible for them. And so I've always had a work ethic in my life. I mean, I was brought up in a single, you know, my mother with four kids, no father, my whole life. And, and she worked two jobs supporting the four kids. So ever since I'm seven years old, sweeping floors in a beauty salon. I have, I've been working since I'm seven, so it's not something foreign to me. And it's actually normal for me. And I, I actually, it's a drug that I really enjoy and, and thank God that, you know, Lisa, my other half is, you know, understands it. She's busy in her social life, so she's not nagging me. Call me ten times a day. What are you doing when you're coming home? And, and, and that's how it works so well. So it's, it's just, it's. If it's not in your DNA and you don't really enjoy working, then you're, you know, you're in the long wrong line of work.
- [11:43]
Tommy Trip
So how many people are on your team?
- [11:47]
Steve Varsano
We have 10 people. 10 people. We have salespeople, research people, IT, graphic design. But I. I'm looking now opening up another place in the US So I'll double the team. But it's. It's one of those things where it's the right thing to do for. For my business, but probably not the healthy thing to do for my personal life and my health. But I'm still gonna probably do it anyway.
- [12:13]
Tommy Trip
So you started this fascination with aviation at 14, and your first solo flight happened at 16. What got you into that originally?
- [12:26]
Steve Varsano
Well, it was bizarre because I know I was in the streets of Hackensack, New Jersey, which is not your huge metropolis of New York City, and I never thought I'd ever be in an airplane. And a friend of mine, I was at my friend's house and his older brother was going up for a flying lesson, and he just said, hey, you know, there's four seats in the plane, two empty seats. If you want to come for a ride, you know, you come with me. So I was like, yeah, you kidding me? Go up in a plane? And I didn't know what he was talking about. It was this little single, you know, single engine, tiny airplane. And. But I. I got up in that airplane and I was sitting back there saying, this is amazing. You're, like, in this little sports car up in the air, flying around. It was just, you know, I was 14 years old. This was. It was just something I couldn't believe existed. And I can actually learn how to fly this airplane. So, you know, I was working in those days when I was 14 as busboy, a dishwasher in different restaurants, you know, trying to get money wherever I can. It wasn't really legal, but we did it anyway. And. And I'd work two, three weeks, you know, to pay for one hour of flying. And I did that until I was 16, where you're legally able to solo when you're 16 and you get your license when you're 17. So I did all that. And then I actually went to university and for a degree in aeronautical studies.
- [13:46]
Tommy Trip
So I've always heard this phrase, I gotta be careful here. But basically, anything that flies or floats and some other stuff you rent. When people make a lot of money, what is your take on when's the right time to buy an aircraft or a jet?
- [14:06]
Steve Varsano
It's funny, I probably tell 30% of the people I talk to that they should not buy a jet specifically for that reason. First of all, the idea, the impression that people buy airplanes just to fuck around and just fly around and have a good time it's not true. I'm not saying people don't do it, but that's not why they buy an airplane. If you don't have a real need of at least 150 or 200 hours a year, that's where you really need to buy an airplane. Not because it's more economically feasible or practical. It's because logistically it makes more sense. And to give you an idea what 200 hours means, it's when you're flying 100,000 miles on the airlines, that's about 175 hours. So, so really, you know, 150, 200 hours is, is if you're a platinum level on an airline or flying a hundred thousand hours miles, then that's sort of where you sort of say, you know what, I should really get an airplane because I'm constantly trying to find one, charter one, rent one. The alternative of course is buying a fractional piece of an airplane. And that has become much more, if you want to call it in vogue if you're you, because you could buy a 16th, an eighth, a quarter half which equip equalize to 25 hours, 50 hours, 100 hours, 200 hours and you buy a share of the airplane and then you pay an hourly rate going forward from there. But that gives you consistency, reliability and you know what the price is going to be per hour when you fly it. It's a little more expensive per hour but you don't have to buy the whole airplane and you're only, and you're only paying for the time you're on the airplane.
- [15:50]
Tommy Trip
Yeah. So I was listening to an interview with John Travolta. I think he's got three planes. He said one's always been getting worked on. So his idea is have a second one.
- [16:01]
Steve Varsano
What are.
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Tommy Trip
Even if you buy a new plane, there's still a lot of maintenance that goes into that. I wanted to dive into. This is understanding a lot of people started Delaware company and they charter it and then they got access to airplane plus others. When do you go that route versus keep your full time plane?
- [16:21]
Steve Varsano
So yeah, I mean if you're not using the airplane a lot and you want to reduce your fixed cost, then it makes sense to rent your airplane out to third parties. And about a third of the airplane owners actually do that. So the way the economic model works is you have, when you have an airplane you have fixed costs and you have variable costs. The fixed costs are basically what you pay for whether you're flying an hour or you or you're flying 400 hours, it's your pilot salary, your insurance, your hangar costs, things like that. A mid sized jet is, let's say a million dollars a year. And then your variable costs, so your direct operating costs are every time you, you know, crank the engine up, you're paying for fuel and maintenance and parking and catering and hotels for the pilots and all that kind of stuff. That's, let's say for example, that could be $3,000 an hour. So what happens is, is if you can rent that airplane out for $7,000 an hour and it cost you 3,000 an hour to rent to your cost out of pocket, you're making $4,000 an hour. So if you're flying at 200 hours and you could rent it out 200 hours, you're going to make 200 hours times 4,000 profit, which is about $800,000 in profit. So if you have a fixed cost of $1 million, that now has been absorbed 80% and your fixed costs only cost you 200,000 a year, and then it only costs you $3,000 an hour to fly it. So that's the basic math model. But you know, the negatives are, you know, the airplane's out for, for a charter and you want to use it. And that gets annoying after it happens a couple of times. Or the other thing that happens is sometimes people who rent the airplane out, they put restrictions on it. You know, you can't have red wine, you can't smoke, you can't have a dog. You know, this kind of stuff. And sometimes people don't listen to you and they're inside the airplane and they pull out a bottle, red wine, and it accidentally drops on your carpet, you know, you know, carpet on these airplanes is fifty thousand, a hundred thousand, depending on the size of the airplane. And yes, you could say they're responsible for it, but you know, they'll say we'll just clean it, it leads a big stain and it'll annoy you when that happens a few times.
- [18:34]
Tommy Trip
No, I could imagine. I, I was just thinking about all the legislation that's passed this last year. How has that affected, you know, advanced depreciation?
- [18:46]
Steve Varsano
The depreciation schedule is what you're speaking of. So today you can get, you buy an airplane this year or any year, you get 100% depreciation the year you buy the airplane on the full purchase price. You do have different clients who are actually wanting to get that write off because it does reduce your purchase price in a way because either you're going to Give the money to the government or your taxes or you, you, you apply it toward your purchase price of an airplane. Again, you're not going to do it unless you really have a use. It sounds great to do it as a tax benefit, but you're still not going to do it if you don't have a use for the airplane because it's going to cost you a 1, 2, 3 million dollars a year to operate it.
- [19:27]
Tommy Trip
Have you read the book buy back your time? That's a good book by Dan Martell. Very good book. He, he's actually a good buddy of mine. And the idea that you could fly in, for example, I fly directly to Sandpoint or Coeur d' Alene from Scottsdale. So I don't have to go to Phoenix and fly into Spokane. That saves hours and hours and hours. Plus you just drive right up and take off. So this time factor of being able to fly into a private airport makes a lot of sense. It seems like probably a lot of people that, that probably got come to you are saving a lot of time.
- [20:06]
Steve Varsano
Well, there's no question. You know, the one word I hate using in our industry which everybody seems to use is what? Luxury. But the only luxury that the true user of a corporate jet has is that it creates time and convenience. So you don't have to go two hours early, you don't have to wait for your baggage, you don't have to get into the security line, you don't have to all that kind of stuff. Go to an airport that's closer to you. You don't have to make a connection. We calculated that basically at 200 hours a year of flying you can get 31 more eight hour days a year. Now what's that worth to a company? I mean that is priceless. And that does not include that the person is online, connected, on the plane, working, bringing teams of people with them that you know, he works with or he needs to talk to on the phone while he's in the airplane. You can't work when you're on the airline even if you're on the phone or on, on a laptop. So it is immensely beneficial to the, the executives and the shareholders of the company that it's just an intangible number that is, is hard to explain to somebody who is really not in the business world.
- [21:13]
Tommy Trip
So that's another question I had for you is Starlink. That's probably my biggest pet peeve is not having great Internet. And I've used a lot of different charter companies and it seems like it's spotty at best. That's my main, main thing. When I buy a plane it's going to be like needs perfect Internet. What does the future look like with technology and Internet on planes?
- [21:38]
Steve Varsano
Well, there's no question about it. Starlink has come up from behind and taken a nice piece of market share and the only thing that's holding them back now is the number of places that can install it. On most jets it's going to cost you between 325 and $600,000 to install Starlink on your airplane. And it sounds ridiculous, but the fact of the matter is you get unbelievable connection. The connectivity you have around the world is super fast and very reliable and, and that you have to pay obviously a monthly rate which is unlimited on the Starlink is somewhere around 15,000amonth. But this is talking about unlimited use. You know, if you want to flow movies and emails and all that kind of stuff. If you want basic emails and that's it, you can get it for much, much cheaper. But it is becoming much more of the favorite in, in the corporate jet world.
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Tommy Trip
So these are, these are a few questions I ask every guest. So what's one piece of game changing advice you wish you knew in your 20s?
- [22:48]
Steve Varsano
One thing I have learned is never take no for an answer. And, and when you think a deal is dead, it's not and you got to keep going back and you know, brushing off, you know, the, the, the bruises and get up and go fight again because you can repackage any problem that has caused the deal to crash and, and figure out another way to get to the end result. Don't listen to that little devil on your shoulder and give up because you can always go back and, and try again. And you know, just in general, failure is not the opposite of success, right? I mean failure is a stepping stone to success and you're going to have plenty of failures to get to your success. So if you're not failing, you're not trying hard enough to succeed.
- [23:40]
Tommy Trip
If you had to start over today with just 10 million.
- [23:45]
Steve Varsano
How would you.
- [23:45]
Tommy Trip
Invest and what would you do with the 10 million?
- [23:47]
Steve Varsano
The two biggest, I think growth places in our industry are one, maintenance facilities for airplanes because the fleet's getting bigger and bigger and older and older and these airplanes need maintenance and parts. And the other one is, is what they call EVTOLs, which is electric vertical takeoff landing. So an VTOL is a helicopter, a vertical takeoff landing. An EVTOL is an electric vertical takeoff and landing. Basically it's a passenger Carrying drone or a flying car. This is the future. If you want to call them helicopters that are electric or hybrid, eventually in the future, it'll be hydrogen. They're going to be super, super efficient to, to run. They're quiet. No, no engine noise because you'll get a little drone noise, but you won't have an engine noise. And Atmos from a, from a carbon footprint is zero. The operating costs are going to be very, very cheap, and they're going to become the Uber of the skies. So those are two places on a big ticket item. But if $10 million. Well, I mean, I think I was, you know, try to buy little airplanes and, and, and flip them and make some money. I mean, that's my business. I know that business the best. But you really need to know really deep down that industry to play in that industry, because you can get hurt pretty easily.
- [25:09]
Tommy Trip
I was, I was just looking yesterday at a, a plane called the Jetson. I don't know if you're familiar with it.
- [25:16]
Steve Varsano
That, that's, that's your evtol. That's a single pilot, tiny little cage that you're flying around. It sort of looks like something, you know, out of Star Trek.
- [25:25]
Tommy Trip
What do you think of those?
- [25:26]
Steve Varsano
I don't know what they are now. They came out, there was $75,000. Maybe they're over 100 now, whatever. But it's something where you'll be able. They're in the experimental category, so you can probably take it off in your backyard and fly around. Right now they only have, you know, maybe an hour of endurance on them, and they go maybe 67, 60 miles an hour. I can't remember exactly the number, but it is really the first step to, you know, to democratizing flying around in your own personal craft. I mean, it is, it's, it's cheaper than most cars nowadays.
- [26:04]
Tommy Trip
Which, which is your favorite ev?
- [26:07]
Steve Varsano
There are basically five top runners or four or five top runners in that flying car space. It's Joby, it's Archer, it's Eve, it's Beta. And those are really the top four that are all public companies, by the way. Archer, Joby, Eve, and Beta. Beta just went public a couple weeks ago, and the other three have been public.
- [26:33]
Tommy Trip
So you, you've had a lot of different leadership and advisory roles in companies like Virgin Galactic and other things. You've held executive roles in private equity, real estate, global restaurant brands. What did those experiences shape? How do they shape your career and eventually lead you to starting the jet business? I mean, as far as leadership and just, I guess, deal negotiations for sure.
- [26:59]
Steve Varsano
It gave me the confidence to deal with every kind of person from every country in the world. Because that is really the difficult part. You have people, the who's who, from every industry, every sector, every country in the world that we deal with. And unfortunately, most of the Americans think that everybody in the world should think and act like the American does or a Western mind does, and it's just not the case. And when you deal with people from China or India, Nigeria, you know, Russia, these people don't think the way we do. And we take it as, oh, these guys are trying to rip us off, they're trying to screw us, they're, you know, this or that. And that's not the case. I mean, these people just have a different way, they've been brought up in a different mentality. And you have to just be more patient, understand what they're trying to do, and work around those parameters. So that has definitely helped in doing a lot of international business with people. It made me learn to understand them better, figure out what they're trying to achieve, and try to figure out how you reshape your package that's acceptable to them and to you. Because at the end of the day, the end result is the same thing both people want, but how to get there is the different approaches. And that's what I think. I've learned a lot from doing business with a lot of the international people and the, and the leaders of companies and the confidence to sit across anybody in the world and just not be intimidated by them.
- [28:34]
Tommy Trip
Who is the largest, I guess, country right now that you deal with? That's like, I know China was making more millionaires per day than the United States was making per year for a while there.
- [28:45]
Steve Varsano
So the shocking statistic I'll give you is yes, you're right, China minted tons of wealthy people and billionaires and companies. But to give you a statistic, there's 24,000 jets in the world, corporate jets, okay, 14,000 are in the United States. So it's. The majority are in the United States. In mainland China, there's 300. 300, okay, so. And maybe another 75 if you count Hong Kong, Macau, Taiwan. It's, it's a tiny part of the, of the, of the market. And the reason is, is two things. One, mainland China is 70% airspace, is controlled by the military, so you can't fly there. The second thing is, is that in the United States, which is about the same size as China, land mass wise, there's over 5,000 airports you can land the corporate jet at. And in mainland China, there's 145 airports you can land at.
- [29:46]
Tommy Trip
Wow.
- [29:46]
Steve Varsano
So the, the opportunity is just not there. But the biggest reason is, is if you got a lot of money in China, you don't want to flash it around, even if you're a corporation and you're a big success, because you're worried that the, you know, the country, the government will just think, you know, you must have done something wrong to get it. So they, they keep a much more lower profile and they charter planes and rent planes more than they do own them. But answering your question, what are the markets? Believe it or not, the next closest under the United States at 14,000 jets. Mexico and Brazil each have a thousand jets. All of Africa has 900 jets. All of Asia, including China, has about a thousand jets. You know, all of Europe is about 3,000 jets. And the Middle east is probably about 3,000 as well. It's a small industry, and even small, when you look at how many airplanes are actually trading hands every month, it's a tiny number of people.
- [30:45]
Tommy Trip
Obviously, AI is a pretty big buzzword. So where do you see the future with machine learning, artificial intelligence, things of that nature?
- [30:55]
Steve Varsano
For sure. These, these flying cars, these EVTOLs, those, those really could be completely autonomous right now, but they're not making them autonomous. Well, they're not going to deliver them originally autonomous because they think people won't feel comfortable being in them without a pilot. Even though the Most accidents, probably 70, 80% of accidents happen because of the pilots, not because of the airplane. But on these, on these little flying cars, they're going to be completely autonomous where you're going to. Just like an Uber, you're going to get on your phone eventually call for one. It's going to land close by where you're at. You're going to basically put your, you know, your phone to it or your fingerprint, whatever. It's going to already know where you're supposed to go, your complete longitude, latitude, take off, land, nothing to touch, nothing to Bill. It's all going to get done autonomously and digitally. And that is the technology is really there. It's the regulatory process that really holds things back.
- [31:56]
Tommy Trip
Obviously, no one really knows for sure because there's a lot of legislation and red tape. But when do you think that's going to be a real thing?
- [32:04]
Steve Varsano
It will happen in the Middle east before probably anywhere else. These guys are much more advanced, thinking they're quicker with the regulatory process and they're going to put into effect. I would say they're going to have it in test mode next year. Listen, you have places like Indonesia, Malaysia has 30, 40,000 islands with no infrastructure. You know, this is something where could really be utilized there. It's like the old days with the Internet when you had to have a cable, you know, go and fiber optic cable to be able to get on the Internet. Now the satellites, no matter where you are, you just plug in and you're done. So I think when you start seeing the Middle east, you know, Africa, Southeast Asia or China, start incorporating and using these things much more often and people start seeing that it is working, then, you know, United States will pick it up much quicker. Whether it's going to be downtown New York to LaGuardia Airport, Kennedy Airport, I'm not sure that's the immediate use or need for it. I think it should be used in other places. Air ambulance and cargo and emergency search and rescue, those kind of things first. And then they'll get passenger carrying.
- [33:09]
Tommy Trip
What personal principles have guided, you know, your biggest career decisions, especially getting into the jet business?
- [33:18]
Steve Varsano
I think my word ethic is by far the number one thing that pushes me. It doesn't bother me to work, but I think in work and in my personal life, loyalty and respect for your partner and your customer I think is bar none, you know, non negotiable and, and I believe in that a thousand percent. And if you have, you know, loyalty, respect, you know, with your, with your partner, whether it's in home or in business or your client, you know, you don't, don't look back.
- [33:57]
Tommy Trip
Guide me through kind of what if anybody's listening right now and thinking about getting into the get buying one. What, what are, what are all the questions and thoughts that need to start taking place?
- [34:08]
Steve Varsano
Probably 90% of the answers could be answered with four questions. Okay, how much do you want to spend? How many people you want to carry A maximum? What's your longest trip you're going to take? 5 or 6 times a year. And how old of an airplane would you feel comfortable in getting? If you can give me those four answers, I can narrow it down to a very small handful of airplanes. Said this is your choices. And as far as the last question, how old of an airplane would you be comfortable? Because people ask me what's old? So the only answer I can give is that the bank will tell you they will loan you money if the age of the airplane plus the term of the loan does not exceed 20 years. So if you want to get a 15 year old airplane and you want a five year loan, that's okay. If you get a 20 year old airplane, you know, they're not as willing to finance it. So 20 years is what the bank thinks they're comfortable with. Theoretically. In reality wise, Even an airplane 40 years old is safe. The problem is, is that the maintenance facilities don't want to fix some of the equipment and you have to start replacing some of the equipment and that gets expensive in, in the cockpit. So. But if you can give me those four answers, I could tell you in, in two minutes, really a good choice of airplanes to consider. And then of course you go into, all right, these are the, the size airplanes, these are the operating costs and, and these are the differences between them. So yeah, it depends on what your mission is. But on the small side, let's say there's an Embraer Phenom 3 300, okay, P H E N O M 300. That airplane's been the best selling jet and would have last, I don't know, 10, 14 years or something like that since 2009. It's a brand new, it's 14 million. But in 2000, if you buy a 2009, it's maybe six and a half million. It holds eight people, I wouldn't say super comfortably, but it's like being in a minivan. Okay, you sit down, you're sitting down, you can, there's a toilet in there, but you got to really need to go and, but that airplane can go, you know, 1,700 nautical miles. So you want to take the plane, you know, from New York to Miami or you know, maybe make it one stop going across the US you can do it. And four people in that airplane, it's great. And then you can go to a midsize or a super midsize which also hold eight people. But you can stand up in it, have a proper toilet, has a galley, and you can go three or four thousand nautical miles. So you can easily go across the country and with 4,000 miles you can make it from New York to London. That airplane also is going to cost you anywhere from 5 to 30 million again, depending on if it's 20 years old or new. And the operating cost is going to cost anywhere between, you know, 1.2 and $2.4 million, depending on which model you'd get. And then you go to the large cabin or the ultra long range airplane, which is a Gulfstream, you know, G650 or G700, a Global Bombardier, a Falcon 7X and these airplanes, those airplanes are going to cost you three and a half million dollars a year to run them. Those are airplanes that can fly from New York to Hong Kong or from London to LA and holds 14 passengers. So really, it depends, you know, which category you're gonna need. Or you can get into this airplane, which is, this is a Boeing or an Airbus. This is like a 737 or an Airbus 319, 320. This airplane, you can buy them anywhere from 20 million to 120 million, depending if it's 25 years old or new. And that airplane, they also go from New York to, let's say from, it can go from New York to anywhere in Europe. It can go from, you know, London to la. And, and the operating cost is probably a million bucks more, let's say four, four and a half million dollars a year, you know, more than, let's say, a Gulf stream. So three and a half million for a Gulf Stream or a global and four and a half million for a, or for a Boeing or an Airbus.
- [38:31]
Tommy Trip
Is there any cool client stories? And I know obviously there's probably some things you, you don't want to discuss and privacy is a big deal, but you got anything that you could talk about that's a really cool story?
- [38:41]
Steve Varsano
Listen, there's been good or bad stories, I guess. I mean, I, I can tell you what, just one happened on Friday that, that some guy tried to screw me and, and which happens occasionally in this industry. It wasn't, it wasn't a good story, but it, it turned out that I, I, I won anyway. I had a client that was a Central American country. I always have fun with these guys. And, and we were supposed to close on Friday with his jet. And I'm talking about an airplane that was, you know, in the 30, you know, $35 million area. And, and we were supposed to close on Friday and on Thursday at 5 o', clock, he sends an email to the escrow agent and he said, we're going to don't pay jet business at closing. We're going to pay them after the closing. Now this is a Central American company that has another different Central American company that owns an airplane that's registered in the United States. Now what this means is when we'll pay you after closing, means in translated terms, we're going to fold our special purpose vehicle up the second we close. And if you want to sue me and get your money, be my guest. So literally, he was just trying to cut me out of our fee. He wanted to get his money and end the deal. And thank goodness we, you know, I immediately got on a phone, I got lawyers, I got the trustee on the phone, I got the escrow agent phone, and we had to run around literally all night, Thursday night. And I finally got the trustee to, to tell the escrow agent because I called the trustee and I said, listen, you know who I am, you know, I don't want to cause you any problem, but the fact of the matter is, if we close this deal and they close up their entity, I'm suing you because you are the registered owner as a trustee. And I don't want to do that. So if you really want to save the trouble, I would tell your customer, pay me a closing or you know, you're going to risk yourself getting into a lawsuit, which you don't want to do. So he was super, super accommodating, which I was shocked at that he was so nice about it. And so he told the customer, hey, if you don't do it. And, and the customer really started giving me a hard time. He called me screaming, why'd you call the lawyer? Why'd you call the trustee? This isn't right. And I was like, come on, we're all big boys and girls. You know exactly what you were going to do here. And by the way, you know, I said, you have 30 minutes. This is Friday. You know, 30 minutes before a closing call was take place is if you don't give them instruction to pay me, the buyer is going to ask the escrow agent to send the money back and he'll worry about doing the deal next week. But you know, you have a risk of losing a deal now because it's almost 12 o'. Clock. He wants his money back in his account to earn interest on that much money. So you have 28 minutes. Now go decide what you want to do. And so I got the tables turned around. I saved it, I got paid at closing. I would say it's common, but it does happen from time to time. We, we have people who just for sport, they just want to fuck with you.
- [41:49]
Tommy Trip
Is there any books, Steve, that changed your life?
- [41:52]
Steve Varsano
Atlas Shrugged is a book. I don't know if you ever heard of it. Ayn Rand, I mean that's a book basically about altruism versus capitalism. It was, you know, written by a, a woman in Russia in the 1950s, which is incredible, but it really something that really just put me in such a capitalist state of working for everything. If you want anything, you're going to work for it and don't expect the handout and don't respect anybody that just sits around expecting handouts. That's probably the most influential book I've ever read.
- [42:28]
Tommy Trip
And if someone wants to reach out to you, what's the best way to do that?
- [42:33]
Steve Varsano
I mean, go on our website, the jetbusiness.com or you can just email me, which is easyjetbusiness.com.
- [42:40]
Tommy Trip
Well, I really appreciate the time today, brother, and thank you very, very much. And I'm sure we'll be talking here in the next six months.
- [42:47]
Steve Varsano
Thank you so much. I appreciate this opportunity and really good luck with that exit you're gonna make.
- [42:53]
Tommy Trip
Thanks so much for listening to this episode. Like always. We're gonna close it out with the Tommy Trip Truth, which is a little slice of wisdom from me to you that can help guide you in whatever you're striving towards right now. You know, if I think about my own success, I think a lot of it is just not being afraid to fail. I think a lot of it is just. It's a speed bump. And I. I embraced failure because I'm like, well, we learned from that. We're not going to do that again. And then all of a sudden, you have these stories of failure that just. You took the wrong road so many times. I was talking to Nick Saban and I asked him, I said, said, is it will or skill? He says, both. It's like nature versus nurture. Your brain's got to be able to function at a high level to make complex decisions. And that's it, guys. We'll talk to you next week.