How (and why) taxpayers are helping a private jet company grow in Eastern NC

The private jet company flyExclusive can do just about anything to its fleet of 100 airplanes at the N.C. Global TransPark in Kinston.

Repairs and routine maintenance, sure, but the company also has a hangar for stripping paint off planes and another for painting them. There’s a room for assembling and laying out the miles of wiring needed in each jet and another for turning the hides of Austrian and German bulls into leather seats and wall coverings.

But one thing flyExclusive can’t do in Kinston is train its pilots. And for that, it’s getting help from taxpayers.

The state budget passed by the General Assembly in September provides $30 million to the N.C. Department of Transportation for “construction of a flight training and corporate office facility at the Global TransPark.” That money will allow the state-owned park to build a five-story building for flyExclusive that will include office space as well as flight simulators where pilots can hone their skills.

FlyExclusive is an anomaly in Eastern North Carolina — a luxury brand that jets well-heeled customers to vacation houses, resorts and business meetings all over the country and beyond. Founder and CEO Jim Segrave, a Kinston native, chose to build his company here in part at the urging of his family, which has deep connections to the TransPark and its mission to attract businesses to a region battered by declines in traditional industries such as textiles and tobacco.

Segrave wants his company to handle every aspect of its business in-house, from answering calls from customers to fixing planes. Pilot training is the biggest missing piece. FlyExclusive has about 300 pilots scattered across the country and expects to hire dozens more in the coming years, and now relies on training centers elsewhere.

“We’re not having a lot of trouble recruiting them, but getting them trained is the bottleneck,” Segrave said in an interview. “Getting slots for simulators at the sim centers all over the country, and the delay and the expense on top of it, is why this was so important to us.”

Segrave wanted the training center in Kinston, both for efficiency and to help steep pilots in company culture. But he said other airports were making offers. So flyExclusive hired a lobbyist and, along with the Global TransPark, went to lawmakers looking for money.

“So it’s where can we make our best deal,” he said. “That said, we want to be here. We’d like to come up with the best deal and build our campus out and our business right here in Eastern North Carolina.”

Segrave said he isn’t sure who put the $30 million into the state budget, which is crafted behind closed doors. Neither House Speaker Tim Moore nor Senate leader Phil Berger’s offices responded to repeated requests for comment about the money from The News & Observer.

Segrave estimates the building will cost between $35 million and $40 million, with flyExclusive making up the difference. The company will also install three flight simulators, at a cost of $12 million each.

State government has helped flyExclusive grow

FlyExclusive has gotten help from the state before. In 2018, the company received a $2.3 million Job Development Investment Grant or JDIG, $2 million from NCDOT and $1 million from the N.C. Global TransPark Foundation to help build the paint buildings. In that case, the company had to create 145 jobs to receive the money, something it has done.

In contrast, there are no strings attached to the $30 million grant in the state budget. But the Global TransPark will own the building that it will lease to flyExclusive through a long-term agreement that is still being worked out.

“So we get the benefit of that $30 million investment for some period of time,” Segrave said. “But they invested in themselves, and they still own it.”

The General Assembly created the N.C. Global TransPark in the early 1990s as a place where companies would set up manufacturing plants around a runway, shuttling components in and completed products out.

But the park, about 80 miles southeast of Raleigh, has struggled to attract tenants, and most of its 2,500 acres remain empty. FlyExclusive is the park’s largest employer, followed by Spirit Aerosystems, which produces fuselage sections for Airbus passenger jets and ships them to France, through the port at Morehead City, for final assembly.

The General Assembly hopes to attract more. In addition to the flyExclusive grant, this year’s budget includes $175 million over the next two years to build a Navy aircraft repair and overhaul facility. The Navy’s Fleet Readiness Center East at Cherry Point leased a hangar at the TransPark in 2020 to work on H1 helicopters and is interested in expanding, according to NCDOT spokeswoman Bridgette Barthe.

The budget anticipates the state eventually spending $350 million on the Navy facility, assuming the state and federal governments can settle on a lease agreement. The TransPark would repay the money over time when the Navy starts paying rent.

The Global TransPark provides plenty of room

The Global TransPark is built around one of the longest civilian runways in the eastern United States, at 11,500 feet. But what makes it attractive to flyExclusive is all the space around the runway to park planes and build hangars. Plus the company is not far from large Marine, Navy, Army and Air Force bases from which it can recruit people with skills to work on aircraft, says Tommy Sowers, the company’s president.

“They can really build a career and a life down here,” Sowers said. “Kinston isn’t the bug, it’s the feature of this company.”

About 500 of the company’s 800 employees are located at the TransPark; only about 15 software engineers in Durham and the pilots work elsewhere.

The heart of the Kinston operation is a command center, with big digital screens that track all the company’s planes around the country and list all the flights scheduled that day. Dozens of people at computers take requests from customers, coordinate flights and arrange hotel rooms for pilots.

On the walls in big letters is the phrase “Minutes Matter,” a reminder, Sowers says, that “we’re in the business of time.”

Company expects to keep growing

Founded in 2015, flyExclusive has become one the country’s largest private jet operators and the fastest growing, Sowers said. The company expects to continue growing 20% to 30% a year, mostly by taking business from smaller competitors, and has ordered 44 new Cessna Citation jets to keep up with demand. (Next month, flyExclusive expects to become a publicly traded company through a merger with a Special Purpose Acquisition Company or SPAC.)

The private jet business was slowly recovering from the global financial crisis of 2008 when the COVID-19 pandemic gave it a boost by making commercial air travel unreliable and more difficult. At the same time, the number of ultra-wealthy people continues to grow, says Doug Gollan, whose Private Jet Card Comparisons provides a buyer’s guide to private jet services.

Gollan says more than half of his subscribers cite poor airline service, flight delays and connections and the overall airport experience as reasons for using private jets.

“FlyExclusive can be successful gaining share in a stagnant market,” Gollan wrote in an email. “But they could also grow faster if the wealthy keep getting richer and the airlines continue to make flying via hubs a poor experience.”

Aside from the new office and training building, flyExclusive would like to double its hangar space for plane maintenance, Segrave said. While it wants that work done in Kinston, that won’t stop the company from seeking a JDIG grant from the state to help build the hangars, he said.

“There’s lot of hangars all over the place, and a lot of airports chasing us right now,” he said. “We’ve got to make sure we can make a deal to build the facility to make it make sense for us.”