Poised for international growth

As Flapper plans the next phase of its international expansion, CEO Paul Malicki looks forward to the opportunities ahead. Words: Mike Stones

Poised for international growth

As Flapper plans the next phase of its international expansion, CEO Paul Malicki looks forward to the opportunities ahead. Words: Mike Stones

“One of the key projects for Flapper in 2022 is the internationalisation of our business – especially our app”

Paul Malicki, co-founder and CEO of Flapper

Hybrid specialist magniX partners with Flapper.

FROM THE FARMING plains of Poland to the rainforests of Brazil, aviation entrepreneur Paul Malicki has crossed the globe to pursue his business dreams. Throughout his travels, the strong work ethic, entrepreneurial spirit and dedication forged on the family farm in north-east Poland have never left him. He has needed such fortitude – not least now, as he plans the international expansion of his business Flapper.

“My family – way back to my great, great grandparents – were all involved in farming. And my biggest learning from that background is how to work hard,” Malicki tells Corporate Jet Investor. “There’s no alternative – you are part of the family and involved in all tasks.”

It’s a lesson applied throughout his business life, even before moving to São Paulo, Brazil in December 2013 to work for Latin America Uber competitor Easy Taxi. During his three years as global chief mobile officer and partner, the company (later acquired by Spanish ride-sharing giant Cabify) rocketed from 2m users to 25m, with a social media following reaching more than 1.5m. He even documented his experiences in a book. “In 2013 mobile marketing was virtually non-existent. It was something we had to learn from scratch.” Realising there were no written guides, Malicki captured his learnings in the book The Chief Mobile Officer’s Guide to Growth.

One of the items topping his out-tray was forging partnerships. “I was responsible for Easy Taxi's global partnerships, including some of the world's most successful tech companies,” he says. Those included: Waze, WeChat, Samsung, TripAdvisor and Moovit, plus 10 or more telecom companies.

This experience of partnerships and building tech platforms was to prove invaluable when Malicki came to co-found Flapper as an aviation hire company based in Belo Horizonte, Brazil.

Turning down offers from both established firms and unicorns, Malicki decided to follow his passion and join a team of five other entrepreneurs to launch Flapper in early 2016. Named after the aircraft part (not the American free-thinking socialites of the 1920s), Flapper was conceived as a private aviation marketplace. “I’m probably different from any other founder within the aviation space,” explains Malicki, who is CEO of the company. “I am not a pilot and I have no aviation background. I simply thought it unfair that more people don’t have access to private jet or helicopter transport. I wanted to be an entrepreneur and build something on my own.”

His intention was to launch “the Uber of executive aviation”. Using a smartphone app, users can book a single seat, a group of seats or charter an entire plane or helicopter on demand. Passengers select their departure and destination, travel time and the preferred time for flights. Flapper has access to about 900 aircraft and operates with traditional brokers. There’s even a facility to check each aircraft's certificates of airworthiness, maintenance records and aeronautical and civil liability insurance.

“It’s unfair that more people don’t have access to private jet or helicopter transport.”

Until recently illegal charter has proved a big problem in Brazil, according to Malicki. In 2016, the year of Flapper’s launch, it was estimated that seven out of every 10 charter flights were illegal. But the introduction of an electronic tail number verification system in Brazil has made significant progress in helping to combat the problem, he says. For example, on the company’s website, aircraft listed for charter have a reference to their flight status and permissions. “That’s one example of an initiative that’s relatively easy to automate and is very scalable,” says Malicki. “No other country in the world has such a system. And any other digital platform can benefit from the same system – we want to help educate customers.”

After five years of growth, Flapper is now poised for international expansion based on what Malicki sees as an historic opportunity to vastly widen the audience for private aviation. “One of the key projects for Flapper in 2022 is the internationalisation of our business – especially our app product and our website. I am very optimistic about the potential to bring private aviation [both fixed wing and rotorcraft] to a many more customers, who previously would not have used these services,” he explains.

It’s not just about High-Net Worth Individuals but also about corporations who are returning to private aviation. “There are lots of new entrants, lots of IPOs [initial public offerings] taking place all around the world. These entrepreneurs monetise their shares through IPOs and then they become our customers.”

New entrants – including those involved in Urban Air Mobility (UAM) tests in Rio de Janeiro staged with partner Embraer Eve – account for at least 30% of Flapper’s total client base.

Paul Malicki is a man on a mission to open private jet and helicopter flights to a much wider audience.

As easy as ordering an Uber. Malicki aims to make Flapper the “Uber of executive aviation” with the aid of smartphone technology.

Sitting comfortably. Service is key for Flapper.

Flying high on hybrid power: Flapper is buying up to 20 magniX electric propulsion units to convert Caravans to electric power.

“We are now seeing tremendous traffic coming from Indonesia.”

Malicki says that the progress of app technology – driven by Flapper’s team of developers in Brazil – is also helping to widen the appeal of private aviation and, crucially, lower costs. Hiring talent can prove problematic but Flapper offers innovative remuneration packages. Almost everyone in the company has been employed for four years and nearly everyone has shares or options.

Malicki believes markets, outside Europe and the US, are ripe for development. “You have to remember that Europe and the US are very competitive. There’s probably around 500 brokers and hundreds of operators generating such a lot of noise.” In response, Flapper has adopted the strategy of focusing on developing emerging markets. “Right now, we are seeing tremendous traffic coming from Indonesia – it’s a country of more than 200m people.” He estimates the potential value of emerging markets as being at least the equivalent in size to Western Europe. And there’s a dearth of active competition for company’s services in Latin America.

Flapper’s plan is to replicate its Brazilian strategy. The weakness of the Brazilian currency, the real, is an advantage. “We earn in dollars but spend in the local currency,” explains Malicki. “That makes resources in Brazil so affordable. And that’s part of our strategy to benefit from such an attractive cost base and the talents we can attract. It’s about using talent to help conquer new markets.”

Rising costs remain a challenge, with aviation becoming significantly more expensive in Brazil. “The prices offered by commercial aviation have increased by more than 50% and we see the price of business aviation charter flights going up by at least 40%.” While that affected the purchasing decisions of local customers at the end of last year, the business is benefiting from more international clients who are less price sensitive.

The app is available in three languages, but the goal is to expand that to 20. There’s also an ambition for the app to support all currencies. “No one has done that before,” says Malicki.

Other new features focus on ride sharing and aircraft sales. The ride sharing app, Flapper Pool, is due for launch in the first quarter of this year. It will enable users to create their own flights in a bid to boost convenience and cut cost per mile. The system will allow passengers to book more seats than they need with the excess offered for sale on Flapper’s social media platforms. “If someone wants to fly to Birmingham and needs one seat but is willing to pay for three, we will feature the flight on our app on our social media and look for new people to fill those seats,” he says.

The company operates its own quotation system, which calculates the price of a flight based on more than 30 factors. Eventually the same aircraft will be offered on the app for both charter and sale. Malicki bills Flapper’s app as “the world‘s largest private aviation app”, with 300,000 mobile app users. Plus, the company’s revenues in January 2022 exceeded those achieved in 2019.

Malicki plans to relocate to Europe this year but still plans to retain strong connections with Latin America. Confirming his roots in the region, he recently bought an apartment in Rio de Janeiro. One legacy of the global pandemic will be hybrid working from decentralised office hubs, Malicki believes. “My partner moved to Europe last December and this year I will also move back to Europe to co-ordinate business activities. And we will be hiring more people in key aviation hubs in the region and gradually in Europe and the Middle East.”

Meanwhile, despite a packed work schedule, Malicki makes time for martial arts and the natural world. After his years living in Asia, he is passionate about Thai boxing and competes internationally at semi professional level. “Thai boxing teaches you how to win. And, like being an entrepreneur, you are fundamentally on your own. It’s often a lonely journey – you have a team, but the ultimate decision is yours.”

He also maintains connection with nature via Rio de Janeiro’s tropical forest. “It’s the largest urban tropical forest in the world – that’s where I like to spend my time close to nature.”

Nor has he forgotten his farming roots. “I’d like to get back into agriculture one day. When you come from a farming background, it stays in your blood,” says Malicki. “Perhaps I could grow avocados here in Brazil.”

Flapper has access to about 900 helicopter and fixed wing aircraft.

UAM offers unprecedented opportunity’

Urban Air Mobility coupled with the rising middle class offers “an unprecedented opportunity”, says Paul Malicki, CEO of Flapper

Paul Malicki of Flapper.

The Eve of UAM opportunity: Flapper has forged partnerships with a number of key developers including Embraer’s Eve.

Designed for an electric future: Flapper’s parter magniX has developed a range of electric propulsion units (EPU) for commercial aviation. Pictured is the magni650 EPU, which will power Flapper’s Cessna Caravans.

IT’S A MARRIAGE made in business heaven. Paul Malicki, CEO of Flapper is referring to the business aviation opportunities sparked by rapidly developing Urban Air Mobility (UAM), plus the increasingly affluent global middle class. “It represents an unprecedented opportunity from a business standpoint,” he tells CJI.

“Most analysis points to the fact eVTOLs [electrical Vertical Take Off and Landing aircraft] will kill the existing aviation centre and the way it works,” he says. “It will open the market to an entirely new audience – the people who today use their cars or an Uber to travel from home to the airport.”

Another indication of the size of the local market is the 200m people who live in the megacity of São Paulo. Significant numbers are accumulating the wealth to enable them one day to take an eVTOL to their beachside property.

Key factors are the promise of far lower UAM cost per seat mile, compared with conventional flights, and growing private wealth. “If you can reduce the cost, you can open the market to the upper middle class. We want to make sure you can fly more routes at less cost [than helicopter or fixed wing flights] without compromising service and quality.”

Malicki believes the UAM industry is entering a critical key phase – with its ownership up for grabs in a three-way battle. “This is a really crucial time because the market could be claimed by the airlines, or it could be taken by the likes of Uber. Or, the market could be dominated by companies like Flapper. And we already have 270,000 users, including lots who are early adopters.” The opportunity to fly at half the cost of current levels is likely to prove a compelling proposition for the newly wealthy, he says.

A seat on a typical helicopter flight in São Paul, assuming a full aircraft on both legs, costs about $100 per person. Using eVTOL flights to halve that cost promises to open new audiences for UAM, particularly when a helicopter flight between John F. Kennedy Airport and Manhattan can cost $200.

Gauging the size of the market is daunting but any assessment should probably include the word huge. “Analysis from the consulting companies about the size of the UAM market varies from billions to trillions,” says Malicki. “I don’t have a hard number in my head right now. But I can tell you it could triple or even quadruple our existing client base.”

Flapper is examining several options from cargo to transport of organs. But the main focus is on executive transport. As a boutique airline, the company is even buying its own executive hangars to continue its top-quality service.

Describing the market potential reminds Malicki of an inspirational quote from a panel discussion at the Revolution.Aero US 2019 conference in San Francisco,. “Someone said: ‘It’s for us to decide whether we want to be part of this’ [the fourth revolution in aviation].” From the start, Malicki had no doubt about his commitment. To prove it, he went on to win one of the conference’s Pitch competitions, which attracted new investors.

Precisely when eVTOLs will make a practical impact is less clear. At present, at least 500 companies are looking at eVTOL solutions and some are running tests after winning approval from civil aviation authorities. Malicki does not expect just one eVTOL will rule them all. “Many of these companies will be running different types of flights. You’ll have short haul flights, mid haul flights and operations conducted at different heights.”

In response to the when question, Malicki has two answers. The first is the answer given by the OEMs: somewhere between 2025 and 2030. But Malicki is more circumspect: “Based on my experience and gut feeling, I’d say it will be sometime in the 2030s before eVTOLs become a mainstream travel option. That will be when you can take an eVTOL flight to the airport without thinking this is something that is completely new.”

Malicki bases his opinion after agreeing a wide range of industry partnerships – including with Embraer Eve. Both parties are working with the Brazilian authorities to test routes in the country. So, regulatory barriers to eVTOL growth are not a problem in Brazil or in South America. That contrasts with the regulatory environment in Europe and North America which, although welcoming, is much more complex and demanding. Another big battle will be winning over public opinion for the new technology.

“It will be sometime in the 2030s before eVTOLs become mainstream”

Also challenging will be upgrading battery technology to provide longer range flights. “Most of the concepts we have seen – and I’ve seen hundreds of designs – focus on 40-to-50-mile ranges. That means the only efficient use for such technology today is urban air mobility. But in the future, there will be more opportunities in connecting cities.”

That’s one of the reasons Flapper has based its strategy on forging strategic partnerships. In addition to Embraer Eve, partners include electric aviation developer magniX, Electra and its latest joint venture with Jaunt Air Mobility.

Such partnerships position Flapper to exploit rapidly developing technology and growing numbers of clients. For example, the company’s deal with magniX, revealed last November, facilitates the purchase of up to 20 magni650 Electric Propulsion Units (EPUs) for the conversion of Cessna Caravans to electric aircraft. (Flapper uses Caravans for its scheduled service in the state of São Paulo and cargo flights across Latin America).

“Through our partnership with magniX, we aim to decrease operating costs, reduce carbon emissions, and activate new routes abandoned by regional aviation years ago,” says Malicki. In the 1960s, Brazil used to have more than 260 airports connected by scheduled flights, compared with only about 110 today.

“It’s about both sustainability and cost saving,” he explains. “If you can reduce your dependence on fuel – which accounts for about 40% of costs – it means you can effectively open up the market to the increasingly affluent upper middle class. And that is very much part of our plan.”

CJI Connect

Paul Malicki, CEO, Flapper +55 (21) 9711 90066 • [email protected]

Mike Stones, Group editor, Corporate Jet Investor