Bernard Arnault invests $800 million in Flexjet to challenge Warren Buffett
- L Catterton has announced an $800 million investment in Flexjet, bringing Bernard Arnault into the private jet market.
- This investment positions Flexjet to compete with Warren Buffett's NetJets, which has dominated the sector since 1998.
- This move may inspire other billionaires to enter the private jet industry, potentially reshaping competitive dynamics.
In early December, L Catterton, a private equity firm, announced that it had finalized an investment of $800 million in Flexjet, Inc. This move brings Bernard Arnault, a luxury goods mogul ranked as the eighth richest person globally, into the competitive arena of ultra-high net worth private jet services. His entry is set to rival Warren Buffett, the long-time leader in this sector through his ownership of NetJets since 1998, where he has dominated the market unchallenged. While Buffett's NetJets was fully absorbed into Berkshire Hathaway, Flexjet will retain its independence under the guidance of CEO Kenneth Ricci. Ricci had previously acquired Flexjet from Bombardier in 2014 for $185 million and integrated it with Flight Options, a company he founded. This recent equity investment by L Catterton is aligned with their strategic focus on luxury markets, particularly in corporate aviation. With Flexjet's facilities including 11 private terminals in prime locations, the company aims to offer an exclusive experience to its clients, reminiscent of a private club environment. The investment is not only seen as an individual venture but as a potential disruption to the private aviation industry, paving the way for further interest from billionaires like Elon Musk and Jeff Bezos, who have diversified interests. Furthermore, customers appreciate the significant time savings that private aviation offers compared to commercial flights, reinforcing the value proposition of services like those provided by Flexjet.