| Issue #38, December 14, 2006 |
Who's Here
Todd Rome - President of Blue Star Jets
By Dan Rattiner
Todd Rome is a tall, handsome man of 37 who lives with his wife and children in Manhattan, Southampton and Miami Beach. In 2001, he partnered with Ricky Sitomer to found Blue Star Jets. To say that they have turned the business of buying, selling and leasing aircraft upside down would be an understatement.
Before Blue Star, the business was a quiet, some might say staid affair wherein prospective customers either bought aircraft for their corporations and staffed them with a crew, or chartered corporate jets for particular trips, or bought fractions of a particular aircraft. The firm leading the industry when Blue Star came along was Warren Buffett’s NetJets. It took Blue Star just three years to surpass NetJets in this business, and for the most recent year, NetJets lost $60 million and complained publicly about the Blue Star competition while Blue Star was in the black. Blue Star does about $200 million in revenue. It’s a remarkable story.
“Our job is to get the best price for the best aircraft,” Rome says.
I met with Todd Rome in his Manhattan townhouse the other day and he told me how he wound up in this extraordinary business.
“From the time I was 12 years old, I was always buying and selling things.”
Rome grew up in South Bellmore here on Long Island, the son of a man who was a court reporter for the New York Supreme Court in Manhattan. When he was 12 years old, he sold kazoos to the Ice Cream Man. When he was at Kennedy High School at the age of sixteen, he started promoting teen parties.
“I’d make a deal with a hall, Channel 80, Spratts, American U. Club 212, Speaks, and arrange for one hit wonders to come in and perform. We’d split the door. I did all the shows on the South Shore, and I had a friend who promoted them on the North Shore. We were very successful.”
He went to the University of Maryland where he majored in Business, but immediately saw a need on campus that he thought he could fill.
“All the kids were coming up to college with their parents and all their stuff. Some people came from a long distance. I wondered if it might be a good idea to hire trucks to move the kids things back home when the school year was over and tell the kids they could go in comfort on their own.”
He advertised and signed up some of the other students. And when the time came, he simply moved all of their stuff back home for the summer while they went home at their leisure.
In January of the next year, he began a business to get roses for the guys at school to give to their girlfriends on Valentine’s Day.
“I’d take orders. I had contacts who could get me what I needed from South America very cheaply. Just before St. Valentine’s Day, I’d drive out to Dulles Airport and receive the merchandise.”
In between his Junior and Senior year, Rome worked for the Lake Success stockbrokerage firm of Stratton Oakmont Inc. He loved the excitement of this work. He never went back to finish his senior year, but instead stayed at the firm.
At Stratton Oakmont, Rome met Ricky Sitomer, a young man the same age, who had the exact same drive as he did.
“We were the only two people who were still there at 11 p.m.,” Rome said.
Four years later, they founded Millenium Securities, a retail brokerage firm in Manhattan, at Park and 60th. Rome was President. Sitomer was CEO. They were both 22-years-old. By 2000, when the market seemed to be running out of gas and they thought it was time to close up the business, they were employing between 300 and 400 people.
It was just before the founding of Millenium that Rome met a girl at a restaurant in Manhattan. Carole, it turned out, was one of those kids that had gone to his parties in high school. She was now at Georgetown, where, later, she graduated at the top of her class. The pair were married six months after they met and honeymooned in Hawaii.
It was largely through the experience at Millenium that Rome and his partner Sitomer decided to go into the private jet business.
“We both had houses in the Hamptons,” Rome said. “We’d arrange to bring our top salespeople away on a vacation, we’d jet to Florida, helicopter to the Hamptons. And we got this idea. Using our Wall Street experience, would it be possible to make private jets less expensive for everybody? What if we built a kind of trading room, where what we did was match up people who wanted to go places with private aircraft owners who wanted to make use of their planes when they were not being used — say on a return leg back to the headquarters?”
It was this idea that was to turn aircraft leasing on its ear.
“Ricky and I flew out to Wichita, Kansas. We toured every single aircraft assembly line in that city. We learned all about all the different aircraft, where they are, how they go, what they sell for.”
And then, in Midtown Manhattan, they created a big trading room, with huge television screens on the walls where teams of salespeople could track the movements of different aircraft around the world and phone in availability times. Using this information, Blue Star could then, over the phone, arrange private auctions for the time and place and get the best price for the best and most appropriate corporate aircraft. They would buy aircraft time by the trip.
“We began to build an executive team,” Rome said. “And we began to contact our old ‘team’ from Millenium. We’d make this industry competitive, we’d make our mark, and we would grow to become the major player in this market. It’s expected to be a $3 billion business shortly. We want $2 billion of it. And then we will go public.”
Rome and his wife and his two kids, Jessica and Skyler, spend winters in Florida on Fisher’s Island, have a house in Manhattan and a summer place in Southampton, in what is known as the Murray Compound. They are active in charity events, including ArtRageous, G + P Foundations, which is Denise Rich’s foundation, and the American Red Cross. The Red Cross Ball was held at Rome’s home in Southampton last year and 300 attended.
“I love being a parent,” Rome says. “I have daddy/daughter breakfasts at the Regency when we’re in town. The girls go to Miami Country Day. And we vacation in Europe in the summer and Aspen in the winter. We are in St. Bart’s over Christmas Week.”
As for Blue Star, they have offices in New York, Chicago, Los Angeles, Miami, Dallas, Boca, Houston and Phoenix, with a new one just opening in London. They are providing 4,000 people with hourly travel on 4,000 aircraft. They have also introduced a “rewards points” system, similar to the ones used by major airlines. No one has ever done this before for corporate flights.
“Our Miami trading floor is spectacular,” Rome told me. “It’s a 10,000 square foot space that looks right out over the ocean. You can see planes fly by.” The rest of the view is Blue Star.
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