Supplying the rich and famous
The rich and famous patrons of the private jet industry lead a luxurious lifestyle few New Zealanders ever even glimpse.
But Kiwi entrepreneur Richard Pryor has found a window into the plush world of super rich high-fliers, and the US$1 billion cater dhing industry that supports them.
Pryor founded Private Flight, an Auckland-based company that provides onboard catering procurement and software support to private fleets, in 2007, after his experience working for the private fleet of Saudi Arabian royal, Prince Al-Waleed bin Talal in 1999.
Pryor, who has a BA in Psychology and a PgDip in Business, spent three years working with the catering and procurement team for the prince, who at the time was the fourth richest man in the world.
He found that the catering on the royal's private jets often didn't match the passengers' sophisticated palates of the passengers and saw an opportunity.
''The prince's private commercial jets were virtually flying hotels,'' Pryor said. ''He was used to a palace full of chefs and his understanding of food was pretty high, but the flight attendants who were making the meal orders didn't have a background in food and beverage or procurement.''
Flight attendants on VIP flights are often given difficult requests such as sourcing avocados in challenging locations like Siberia, Pryor said.
The Private Flight procurement system aims to resolve such problems by connecting aircraft operators with menu options from 1000 food suppliers around the world - including five-star hotels, Michelin-starred restaurants and high-end caterers - through its service software.
But while the VIP catering world is a niche market, it is by no means small, Pryor said. There are 33,000 private aircraft in the world and the fleet grew by 2.8 per cent last year, as demand for corporate jets increased.
Passengers might spend $40,000 on catering for one flight and have annual food budgets of several million, Pryor said.
But with big budgets come big challenges. Private Flight pays catering suppliers directly for orders and bills its clients at a later date. But while 60 per cent of its supplier bills are on payment terms, 40 per cent must be paid on delivery.
''Cashflow is something we manage very well but we are very aware of,'' Pryor said. ''We have clients that can spend an awful amount of money in a short space of time and we need to fund that knowing that we might not get paid until 50 days later.
''Banking is another challenge. We got told by NZ Trade and Enterprise that we transact in more countries than any other company. [Our software] is built to deal with different currencies, time zones and VAT laws.''
Private Flight works with several international aircraft operators, including Comlux, Avcon jet, Luxaviation and Saudi Private Aviation and the company has staff in Portugal, Geneva, Paris and Bulgaria - an area that services many wealthy Russian passengers. Since going to market in 2008, the company has experienced serious growth and became profitable last year.
''We could have been profitable in any time in the past few years, but we have been reinvesting for growth,'' Pryor said.
Callaghan Innovation has provided a grant of $600,000, which the company has matched dollar for dollar to expand its existing software. The development will allow Private Flight's technology to be white-labelled and in turn permit clients to work directly with suppliers.
Private Flight is on NZTE's list of the top 500 companies it focuses on, due to the projected growth from the new software product. It should be rolled out at the end of the year.
Identifying new business is relatively straightforward, Pryor said. The company targets aviation companies directly and any fleet expansion is easy to predict due to the slow lead in time with aircraft manufacturing. But getting clients to change their supply chains has been a hurdle.
''This is an exercise in change management. Our biggest obstacle is the status quo.
''But something I tell our new clients is that high net worth individuals benchmark the small things,'' Pryor said.
''They can't assess the value of a flight by tracking the cost of fuel, or aircraft maintenance but they can compare the steak they had in Le Cirque restaurant in New York against the steak they are having on the plane.''
Sixty-six per cent of the world's private aircraft carriers in the world are in the US, and Private Flight has its eye on the American corporate market. But Middle Eastern and European markets remain the priority as they have proven quicker to adopt new technology.
''They are a lot less sophisticated in the US with food and beverage. A customer might pay $200,000 for a private charter, and they would put McDonald's on board,'' Pryor said.
''There's also a lot of catering monopolies that exist in the US market.
''Something we try and do in every location we work is to introduce competition in the supply chain and bring new providers to the market so we have a platform that provides choice.''
The company has 24 employees in its Auckland office and hopes to expand to 35 but recruiting staff is difficult. Most positions require staff to speak at least three languages.
''In terms of breaking barriers and facilitating good relationships, speaking to someone in their own language is really important,'' Pryor said.