Jim Segrave flies high
Jim Segrave displays little fear in growing his Kinston private-jet business amid a scarred aviation industry.
The nose of the business jet, darting and bobbing in air currents rising from the flat-topped mesas and wooded canyons below, arches downward. On top of a plateau in the distance, just feet above a sheer canyon wall, is a narrow, impossibly short runway that culminates in a thousand-foot plunge to Colorado’s San Miguel River.
In the last seconds, the pilot extends the flaps and flares the nose up slightly, and the white center line of the runway rushes up. The plane touches down lightly.
“There’s no better freedom,” Jim Segrave says, “than to be able to fly an airplane.”
Compared with his early days flying single-engine planes through darkness over mountainous western North Carolina, nailing a daylight landing in Telluride, Colo., isn’t so difficult.
Segrave’s business is fast, private charter jets for hire. He and the 180 pilots of flyExclusive, the prime component of his 400-employee Kinston-based LGM Enterprises, regularly fly CEOs, movie stars and other celebrities. The business is headquartered at a once-dilapidated World War II airport in the soybean, corn and cotton fields of eastern North Carolina. Segrave estimates its value at about $200 million.
Now, facing a storm he can’t fly above or around, Segrave, 49, is stacking his chips higher, continuing to grow in the pandemic-plagued aviation industry. It’s a gritty, unconventional move at a time when industry giants such as American Airlines and United Airlines are losing billions of dollars as they cut staff, reduce flights and wait for a travel rebound.
LGM’s revenue plunged to 5% of its normal level by late March, forcing Segrave to summon his suddenly stricken air force back to the Global TransPark headquarters. The assortment of Cessna Citation Encores, Excels and fast, continent-spanning Citation Xs, jammed the ramp in front of flyExclusive’s white metal hangar, nose to nose.
With a fleet of more than 60 jets, it’s the eighth-largest of nearly 2,000 private jet-charter companies in the nation, and biggest in North Carolina, according to the Washington, D.C.-based National Air Transportation Association and Federal Aviation Administration.
“We had 47 planes sitting here,” he says. “It was incredibly beautiful but incredibly scary at the same time. It was costing us a fortune, paying the banks, insurance, the pilots, the staff.”
The planes, which might normally average $5 million a year in revenue normally, were racking up hundreds of thousands of dollars a month in maintenance and other costs. “We didn’t lay anyone off, but it was a really, really stressful time for us.”
Six months later, aided by a couple of million dollars in Paycheck Protection Program support to help preserve jobs, Segrave says he is breathing a bit easier. “We’re not where we were previously,” he says. “We’re running about 75% of the revenues where we were before. If you looked at what we projected this year, that was about $185 million to $200 million. Now we’re projecting about $150 million. We’re not back to making money yet, but we’re not losing a whole lot now.”
LGM and flyExclusive have satisfied a string of lenders, and Segrave expects to expand to nearly 70 jets by year end. “We’ve grown one plane at a time, plowing all the profits back into the business. As we’ve made money, I’ve used that to finance the equity portion of the next acquisition.”
FlyExclusive courts wealthy clients for its Citation X jets, which cruise at 600 mph, with an unsubtle slogan: “Fly nonstop from Boston to Napa Valley, from chowder to wine country, quickly and with ease.” Jet Club members pay $150,000 to join and as much as $7,000 an hour to fly.
LGM Enterprises also owns Jetstream Aviation, which paints and refurbishes planes. It launched in Kinston last year with about $5 million in bank financing and $3 million pledged from the state and Global TransPark Foundation. If Segrave creates 145 or more jobs as promised within 12 years, it would qualify for another $2.3 million in state incentives.
As a pilot, Segrave is certified to fly a half-dozen different planes and has more than 9,500 hours at their controls. He’s also a member of one of North Carolina’s most prominent business families.
Segrave is the great-nephew of the late Felix Harvey, an eastern North Carolina business titan whose Harvey Enterprises included a bank, insurance company, cotton bins, farm stores, oil distributors, tractor and farm equipment dealerships, and other businesses. Harvey was a founding force behind the Global TransPark and helped it obtain more than $200 million in public support. It floundered for more than a decade until landing Spirit AeroSystems in 2008. The park has since grown with aviation-related companies, including Segrave’s.
His grandmother was Felix Harvey’s sister, and she married into the Brody family, whose department stores once dotted eastern North Carolina. Their contributions funded East Carolina University’s Brody School of Medicine. Segrave is a board member of Harvey Enterprises, which owns or partners with more than 30 John Deere dealerships in the Southeast, along with other ventures.
“We’ve been trying to bring in smart people from the sixth generation, and Jim is one of them,” says John McNairy, the company’s longtime leader and Felix Harvey’s son-in-law.
While Felix Harvey was famous for his common-man demeanor, Segrave lives a jet-set lifestyle, while doting on his four children. (He has remarried, and his first wife, Michelle, married St. Louis Cardinals manager Mike Shildt in March.)
Segrave has multiple million-dollar homes and a Florida-anchored yacht that employs a captain, chef and other crew. It’s a style that can get under the skin of some. Four years ago, he rankled neighbors in Pine Knoll Shores, a Carteret County beach town where his family owns property, by repeatedly landing his personal helicopter there.
“He’s got a really big personality, is a gregarious guy and likeable as all get-out,” says Harry Smith, a Greenville businessman and former chairman of the University of North Carolina System board of governors.
Jim Segrave was born in Kinston, but when he was a year old, his family moved to Hickory, where his father, Thomas, ran an insurance agency. The family later moved to Columbia, S.C., then Florence, S.C., where the elder Segrave was part owner of a Pepsi-Cola distributorship controlled by the Harveys and Brodys.
When Segrave was about 8, the family switched brands and invested in East Carolina Bottling Co., distributing Coca-Cola products in Kinston, Greenville and other areas. Soft drinks were then sold in glass bottles, and Segrave went to work unloading empties picked up by route trucks. “They had me sorting them. There were Coca-Cola, Pepsi, Diet Coke, Dr Pepper [bottles], all had to be sorted and put in crates.”
Like a lot of folks in eastern North Carolina, Segrave quickly gained a love for boats. When he was 13, his parents gave him a 15-foot Boston Whaler. He obtained a diver’s certification and a Coast Guard captain’s license. An initial goal was to operate his grandmother’s 54-foot boat. He also started a boat-delivery business, shuttling sailboats up and down the Tar Heel coast for wealthy owners who raced them on weekends.
When he was 17, Segrave used his diver’s license to start Scuba Clean, charging $300 to dive under boats in the Morehead City harbor and scrape barnacles off their hulls. “Otherwise, they had to pay $300 or $400 to merely get the boats pulled out, then had to pay for the cleaning too.”
His father also had a Virginia Beach, Va., business and a pilot who regularly flew there. Divorced, his mother married an orthodontist, who also flew. Segrave would occasionally take the controls of their small planes, mostly Cessna 172s, 182s and Pipers, and his fascination with flying grew. At 19, he earned his pilot’s license.
He worked in quality control for his father’s American Coatings Technology, a Greenville company that supplied Chrysler, Ford and others. When a Tennessee customer reported a problem, Segrave saw an opportunity for a new venture.
“I got to rent an airplane to fly to Tennessee with somebody else paying for it,” he says. The customer asked if he could bring a load of parts, was pleased with the delivery, and asked if Segrave would ferry parts on a regular basis.
“I figured maybe $1,500 a trip, so I told him $2,500 and he hung up,” Segrave says. “I figured, ‘I blew it by asking too much,’ but then he started booking me five, six, seven times a month, and I was making $150,000 a year as a college kid.”
Tom Segrave signed a loan for his son to buy a single-prop Piper Saratoga, and soon he was regularly flying parts to Tennessee and elsewhere. He logged more than 600 hours in the first 10 months, much of it flying over the Smokies at night.
He pressed his dad for a bigger plane. “I took the approach of ‘You don’t want your son up there flying over the mountains at night with just one engine, do you?’”
Segrave soon had five Beechcraft Barons and similar planes, carrying freight and auto parts and ferrying canceled checks from banks to Federal Reserve sites. All this business activity, which included a trucking unit, didn’t make for a traditional college lifestyle. He majored in math and computer science at ECU from 1989 to 1993, but he didn’t complete his degree. He never returned as a student but in 2019, he was appointed to the ECU board of trustees.
Segrave created Segrave Aviation in 1994, flying charter jets, running airport-based filling stations for planes and offering maintenance service. In 2010, Delta AirElite, the charter arm of Atlanta-based Delta Air Lines, bought the business, which then had 21 jets. No price was disclosed.
BACK IN BUSINESS
Saddled with a noncompete agreement, Segrave ventured into other businesses, including a child care center. When the noncompete ended in 2017, he got back into charter jets, ramping up from six employees and three jets to its current size, says Allen Thomas, executive vice president of flyExclusive and a former Greenville mayor and Global TransPark director.
Segrave credits lessons learned from Segrave Aviation for the growth. Where he had operated 17 different plane models at his old business, he has focused mainly on two variations of Cessnas at flyExclusive, cutting maintenance costs and increasing scheduling and flexibility for his pilots.
He mostly buys jets that are 10 to 15 years old, depreciated but relatively young in aircraft terms. Some jets leased to the company are owned with outside partners. A primary function of his newly created Jetstream Aviation is repainting and upgrading interiors for a consistent brand look. “The idea is to present a world-class product to our customers,” he says. “They demand it.”
In March, just as the coronavirus crisis struck, flyExclusive expanded its international reach by acquiring Sky Night, a Greeneville, Tenn.-based company with four Gulfstream jets with capacity for as many as 13 passengers for travel to Europe, Asia and elsewhere.
Segrave leaves no doubt that LGM and flyExclusive have run up considerable debt with banks including Little Rock, Ark.-based Bank OZK, Chicago-based Northern Trust and Lafayette, La.-based IberiaBank, which was acquired in July by First Horizon. FNB, a Pittsburgh bank that bought Yadkin Financial to expand into North Carolina in 2017, facilitated the company’s PPP loan earlier this year, federal filings show.
OZK bases lending decisions on the financial strength of borrowers and history, age and time on the plane, and its engines, among other factors, says Michael Cole, managing director of its business aviation group.
“The airplanes we finance are essential business asset, working airplanes,” he says. “We support charter operators like flyExclusive that fly under higher FAA operating standards. They have dedicated professional pilots, maintenance staffs and experienced managers like Jim Segrave.”
OZK’s analysis, he adds, supports Segrave’s optimism for the future of the charter industry. “Individuals that historically have flown first class are now flying with organizations like flyExclusive for health and safety reasons.”
Because of the pandemic’s impact, the cost of charters “has dropped as much as 50% on some flights,” Cole notes. For companies that have several employees on a private jet, the cost is often the equivalent of first-class fare on commercial airlines.
Paul McCluskey, vice president of Hunt & Parker USA, a Daytona Beach, Fla.-based broker of charter flights, is less sanguine. He also heads the Air Charter Association of North America and relies on flyExclusive as a primary flight supplier.
“Our industry is holding its breath to see what happens next with the virus,” he says. “Is there a second wave coming?” Still, he adds, companies like Segrave’s might fare better than commercial airlines. “In chartering an aircraft, people have a higher degree of control. They are not exposing themselves to the public, and they know the aircraft will be sanitized and low risk.”
In the same Global TransPark office he occupied before selling his business to Delta, Segrave turns reflective in sizing up the future. “I don’t have any private equity money in the business, and I have just four little partners — my four children. Each owns a little piece. My oldest girl is 14, and so far, they listen to me pretty good.”
Much of his Segrave Aviation staff has returned to his new venture. They realize flyExclusive is not out of pandemic turbulence yet.
On a summer day, Segrave props at his desk, outlining the growth, struggles and future of LGM and flyExclusive, while 900 miles away, a 97-foot Hatteras yacht is idling in the harbor of Ocean Reef Club on the northern tip of Key Largo, Fla., preparing for a trip to the Bahamas. Palm trees line its canals, in turn lined by million-dollar homes. One is Segrave’s. He had a second one at the club but sold it earlier this year.
Within a day or so, Segrave, his wife, Lyndsay, and his children will jet to the Bahamas to spend a month on the yacht, in the blue waters and white sands of the islands.
“I’m living a good life,” Segrave shrugs. “I’m playing a little bit this summer. I’ve got the best team I’ve ever had, and that lets me sneak away.”
The Bahamas are hardly more than two hours by private jet from Kinston. But much farther, he says, from sorting sticky Coca-Cola bottles at the family soft-drink plant. ■