Inside Draken International: How a Silicon Valley Billionaire Assembled the World’s Largest Private Tactical Air Fleet

Sarah Staples February 15, 2018

A few miles off the Vegas strip, aircraft sit on the flight line at Nellis Air Force Base, under sunshades protecting billions of dollars of investment from the desert heat. This is what they call “iron on the ramp” — row upon row of F-16, F-15E and F-15C fighter jets, and the newest “fifth-generation” F-22 stealth fighters and F-35 multi-role aircraft (smooth black insects with bloated bellies, these are the air-to-air and air-to-ground planes with advanced radar and avionics that are tapped to replace Canada’s older CF-18s).

One by one, jets scream in to land near massive, parked C-17 transport aircraft and KC-135 aerial-refueling tankers. At a second, distant runway in front of Sunrise Mountain, B-1 bombers are readying for the third wave of takeoffs to the Nevada Test and Training Range. On the other side of the mountain is Area 51 — Lord knows what might be taking off from there.

Military culture is awash in symbolism, so it’s a big tell that amid this imposing hardware you’ll find the United States Air Force Weapons School, equivalent to the Navy’s Top Gun program. Less than one per cent of fighter pilots — 10 to 20 per year — are invited to complete essentially a PhD in warrior tactics inside low, unassuming squadron buildings that line the runway. Folks here know what the Weapons School patch, worn on the left shoulder of a flight suit, signifies. It takes precedence over any other patch; it’s the only one that can never be ordered removed.

Within spitting distance of the Weapons School is a hangar belonging to Draken International, a private company that provides “contract air support.” Its pilots — who are all ex-military, and about 80 per cent of whom are USAF Weapons School grads — play the role of “bad guys” against air force “good guys” in live aerial combat exercises, like those at Nellis.

Draken’s CEO is Jared Isaacman, a civilian pilot and former airshow performer (certifications he earned in his spare time). As a teenager, Isaacman created several start-ups in his parents’ basement in Allentown, Pennsylvania. Among them was Harbortouch, which would grow to be one of the world’s largest credit card payment processors, in the business of approving and declining credit card sales. These ventures made Isaacman a billionaire by his mid-twenties, and gave him the means to bankroll Draken.

Now 34, and disinclined to spend his wealth on sports teams or yachts as other billionaires are prone to do, Isaacman’s accomplishment with Draken is unique in aviation. He’s amassed a collection of military aircraft that’s already the world’s largest privately owned tactical fleet. He’s also put some of the best flyers alive at the controls — all with the goal of helping air forces train and retain their prized Top Guns more cheaply and efficiently. Whatever Isaacman has going on must be working, since the significance of Draken fighter jets parked beside F-22s and F-35s — the pride of the USAF air fleet —  at such an essential airbase is unmistakable, too.

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Being a military fighter pilot is a difficult job — and not for all the reasons you’d think. The United States Air Force has been on war footing since Desert Storm, the first Gulf War operation of 1990–91. Despite a continuous need for pilots and planes, budgets have plunged since the Cold War. Pilots are stretched thin, enforcing no-fly zones and supporting ground operations in the Middle East and elsewhere — spending months or years away from their families.

Complicating matters, there’s a worldwide shortage of commercial pilots. When an airline comes along waving a fat cheque, it’s a powerful incentive to leave military service.

If you could spend less training fighter pilots, you could devote more resources to keeping them in the air.

Enter Draken. That was the opportunity Isaacman was eyeing in 2011, back when he formed the Black Diamond Jet Team with his tactical-flying instructor, retired USAF Lieutenant Colonel Jerry “Jive” Kerby, and together with a few more men, they began flying the airshow circuit on behalf of the Make-A-Wish Foundation children’s charity.

“The Black Diamond Jet Team was my football or baseball team,” says Isaacman. “I loved it. It was an escape. It was the best time of my life. But we were always talking about what additional utility there could be for the aircraft; we had to be able to do more than just loops and rolls to music.”

“Jive” was the team leader and “Rook” — the Rookie — Isaacman flew right wing. They were joined by Doug “Tut” Demko, the only other civilian pilot (who, with Isaacman, had set a record for circling the earth in a business jet, in 62.5 hours). Lieutenant Colonel John “Slick” Baum, an ex-Thunderbird demonstration pilot, F-16 pilot and Weapons School instructor, joined the team, as did Lt. Col. Sean “Stroker” Gustafson, another USAF pilot and former Thunderbird, born in Ohio but raised in Kenora, Ontario.

“Jive” also managed to pull in a living legend: retired Navy Top Gun Capt. Dale “Snort” Snodgrass, a Smithsonian honouree as the all-time F-14 Tomcat high-flyer. Google the iconic photo of his flyby during the summer of 1986, just as the movie Top Gun was heading into theatres, and prepare to be amazed that a wingtip could sneak so far beneath an aircraft-carrier deck.

Whereas Thunderbirds, Blue Angels or Canada’s Snowbirds typically fly formation about 45 centimetres apart, wingtip-to-wingtip, the Black Diamonds were stacked like playing cards, with a comparable span of wingtip overlap and 20 centimetres of wing clearance. They were kicking ass in the air.

On the ground, they realized they could perform at a fraction of the manpower and cost that government demonstration teams budgeted for. Black Diamond jets were easier to maintain and cheaper to fly than Air Force F-16s, yet they still had ex-Thunderbirds and Weapons School graduates flying them. Why not apply that blueprint — high-quality tactical performance at low cost — to help fulfill the USAF’s urgent need to provide worthy sparring partners for its pilots in training?

By November 2011, “Rook” had incorporated Draken, and the Black Diamond Jet Team was starting to evolve into an air force that could provide “opposing forces,” known as “red air,” on contract. They were ready to get going; all they needed were more planes and pilots. That’s when New Zealand’s entire fighter jet fleet came up for sale.

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Draken has won every “red air” contract offered by the USAF in the past three years. The company owns 90 fighters and counting, and just announced plans to acquire 20 Mirage F1s from the Spanish Air Force. (In comparison, the Royal Canadian Air Force operates 77 CF-188 Hornets, also known as CF-18s).

It’s a far cry from the startup phase, when “Rook,” “Stroker,” “Slick,” “Jive,” and “Snort” plotted, through 20-hour days, how they could buy, secure numerous military and export approvals for, pack, and ship an entire fighter-jet fleet across the Pacific Ocean.

Like good Top Guns, the first move of the newly minted executives was to build a bar at Draken’s hangar in Lakeland, Florida — a suburb of Tampa. The hangar today resembles a strangely militarized IKEA warehouse: packing crates of aircraft parts stacked high, fuel tanks, jet engines, fuselage tails, and racks of combo pods used in training, which look like 11-kilogram NERFs but have the ballistics of a 900-kilogram bomb.

There’s a “MiG Alley” featuring boxed-up Polish BIS-variant Mach 2 MiG-21s from the 1980s. Rows of L-39s sit ready for takeoff near beefier L-159s, the same frontline fighters currently flown by the Iraqi Air Force against ISIS in Syria. Looking around this space, you see Isaacman’s endgame. He could entice customers — and erect an insurmountable barrier to competition — by amassing “iron on the ramp.” Emblazoned on a sign near the bar is Draken’s motto: Build it and they will come. The strategy had worked well for the young CEO in the past.

Isaacman was a techy-savvy kid with an afterschool job as an IT guy for a computer store, picking up clients on the side for his own consulting business, when credit-card payment processor MSI Merchant Services hired him to debug its network, and promptly made him Director of IT. He stayed on for six months, long enough to figure out what was broken with the industry — minimal customer service, maximum paperwork — then struck out on his own with Harbortouch to fix it.

“Whereas Snowbirds typically fly formation about 45 centimetres apart, wingtip-to-wingtip, the Black Diamonds were stacked like playing cards. They were kicking ass in the air.”

“The entire experience from beginning to end made no sense,” he recalls. “Merchants had to jump through a million hoops and small businesses would wait weeks to be approved to start swiping cards; everything about it was wrong.”

The solution was to give away expensive tools like those handheld payment terminals, and create an efficient virtual back-office that made it easier for the local pizza shop, say, to process credit-card transactions. Front-loading significant investment in hardware and infrastructure was a gamble, but Isaacman reckoned the payoff would be greater volumes of credit-card transactions. Build it and they will come. He was 16 when he made that call. (Eventually, he would come full-circle, acquiring MSI for $250 million.)

Harbortouch remained a lucrative day job, but the opportunity posed by Draken was increasingly on Isaacman’s mind, too. For decades, the global military machine has used private-sector contractors to rein in costs. The USAF initially resisted the outsourcing trend, preferring to stand up two in-house training squadrons, the 64th and 65th Aggressors — but their future was uncertain.

So in November 2011, Isaacman extended his honeymoon in Bora Bora with a reconnaissance trip to New Zealand, which had spent $300 million upgrading its Vietnam-era A-4s with new bells and whistles like advanced radar — only to see a newly-elected prime minister stand down the “offensive” role of its air force and mothball the planes. Reliable, capable of reaching Mach 1.1, and able to fly supersonically in a dive, these were A-4s on steroids: an ideal training fleet.

It took a couple of years to finalize the purchase and pack up 11 A-4s, plus some Aer- macchi MB-339CBs, along with their spare parts, into 124 shipping containers destined for Lakeland. Finally, in 2013, during Sun ’n Fun — a popular airshow that takes place on municipality-owned runways behind Draken’s hangar — New Zealand’s defunct fighter-jet force roared back to life in a handover ceremony.

“This is a national treasure sitting behind you,” explains “Slick” Baum, Draken’s vice-president of security and strategic projects, as we sit in the bar overlooking several A-4s in the hangar. “Not only for us, but for New Zealanders and anyone with an interest in aviation. Grown men were crying when we flew them. Pilots and crew chiefs and maintenance guys who we reunited with their aircraft were saying, ‘Oh my God, I thought these would never fly again.’”

The Black Diamond Jet Team disbanded afterward, as Draken began ramping up “red air” contracts for the USAF, the American National Guard, and air forces in countries such as Norway, France, and Japan. The following year, 2014, the USAF’s 65th Aggressors training squadron folded. Soon, Draken pilots were flying alongside the remaining 64th Aggressors at prestigious multi-fleet, multi-country dogfight events like Nellis’s “Red Flag.”

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In the afternoon, “Slick” Baum fires up an L-39 and steers with his feet down the runway. Lakeland has just wrapped its latest edition of Sun ’n Fun and families are bolting out of RVs toward the runway fence, waving. Watching fighter jets take off never gets old. “Slick” was a little kid visiting his uncle, a jet-engine mechanic stationed in San Antonio, Texas, when a group of F-16s flew in for fuel. After he snuck into the movies at age 10 to see Top Gun, it confirmed for him what he already knew: he’d end up like Maverick one day, an officer and a fighter pilot.

At 17, he called an air-force recruiter and enlisted, using the Montgomery GI bill to finish college and later a Masters degrees in aeronautical science and strategic communications. He kept working his way up, first to Euro NATO Joint Jet Pilot Training where students get their wings (and where one of his primary instructors was a Canadian F-18 pilot), then F-16 training, and finally to Weapons School.

We have liftoff into a crosswind, accelerating through 100 knots. We’re playing wingmen of a two-ship formation, following flight-lead “Jive” over the marshy green of southern Florida. Into the long, delirious, burning blue of John Gillespie Magee Jr.’s poem — one “Slick” considers a favourite — he starts demoing “wing work,” rising to 90 degrees of bank, working through various bank and pitch angles. He performs an aileron roll, a barrel roll, and pulls into a clover loop. Smooth. You barely feel the pressure of 4.5 Gs.

“Slick” came to feel like his own Viper was an extension of his body — he would strap in for eight-hour combat sorties in Bosnia or Iraq, feeling like he had on the most perfectly tailored suit. Then, in April 2004, came a radio request for air support from marines taking enemy fire in Fallujah. Chris Kyle’s American Sniper was playing out in real life at the time. American contract forces had recently been killed and hung from a bridge in the city.

“Slick” approached in a storm under heavy fire. Visibility was so poor he couldn’t drop a laser-guided bomb, so he led a strafing attack, removing a rooftop sniper who’d pinned down the marines. It was a bold move, and contrary to preferred tactics of the time. It also sealed the decision of higher-ups to grant him the rare honour of becoming a Weapons School instructor, just like Maverick in the final scenes of Top Gun.

This spring, “Slick” bowed out of active duty after 24 years. Married now, with a young son, and having risen the ranks of the USAF faster than most and achieved his boyhood dreams well beyond his own expectations, it was time to leave the vagabond life of global deployments for good.

Others may reach a certain rank, but if they don’t advance beyond by a specific combination of age and years of service — or if, say, a pilot wants to keep flying but his only option for “promotion” is a desk job — the choice to retire may be made for them by the Air Force. What then?

•••

As Isaacman predicted, the future of Draken is lining up perfectly, like the fighters streaking through the sky over Nellis. Weapons School candidates are taking part in a final graduation exercise, hours before squadrons are due to hold secret, solemn “patching ceremonies” to welcome this next generation of Top Guns into their ranks. Company flyers are in the air, too.

Collectively, Draken pilots have wielded every bit of firepower in the American air arsenal. Colonel Leonard “Wizard” Dick commanded forces in northern Iraq during Desert Storm. Colonel Terry “Stretch” Scott was point man for the Pacific. Lieutenant Colonel Jeff “Magwa” Scott was the first-ever Marine Corps F-35 pilot and stood up the first operational F-35 squadron.

“Jive” Kerby, one of my tour guides at Nellis, led 20 missions as an air-to-air mission commander in Desert Storm, and can fly 70 different aircraft. Previously, such accumulated experience and skill would have been lost to the USAF when he retired. Instead, after a brief stint at an airline, “Jive” is now Draken’s vice-president of operations.

That’s the essence of a venture that’s simply mind-boggling in terms of scale and ambition. More than just saving militaries serious money, Isaacman has figured out how to keep those guys flying the way they were meant to — soaring and banking in service to their country. “I’m in my retirement years, yet it feels like I never left the Air Force,” explains “Jive,” nodding to the jets overhead. “It’s just magic to me — still is, after all of this time.”