XOJet fired a warning shot across the bow of the private jet industry this week with its announcement that it has secured nearly $2.5 billion in financing for a major expansion. XOJet founder and CEO Paul Touw took some time off from deal making—he was in Geneva hammering out details with investors—to talk with Halogen Guides. In the first part our interview he discusses the major cash infusion, his backers and how he was able to snag $2.5 billion in a tight credit market.

HG: First of all, congratulations on the new financing. How long have you been working to secure this round of funding?

PT: At the end of last year we analyzed our position and realized we had a major opportunity to expand. We started to lay the groundwork in December 2007 and worked all through the first quarter of 2008.

HG: TPG Capital is once again one of your major backers, contributing an $85 million equity investment this time around. What’s it like working with them and to what do you think you owe their support?

PT: I’ve worked with a lot of different financing and venture organizations before, and TPG is one of the finest investment firms I have come to know. They are hard working, professional, and smart; incredibly good to work with.

TPG started working with us during our third round of funding. In fact, they initially came in as a customer. They used a lot of different private aviation options, including NetJets. I think that when I approached them about investing in us, they recognized from experience, the value and potential of our model.

When you meet with [TPG founding partner] David Bonderman, he tells you in the first five minutes whether you have a horrible idea, or if he’s interested. Luckily for us he was interested, because they have an incredible track record. They’ve managed a 44% ROI every year, which is absolutely phenomenal.

HG: In the last few months two airlines have folded, others are cutting back on flights, and even all business class airline Eos was unable to come up with $50 million investing to continue its operations. How is it that you were able to secure $2.5 billion at a time when commercial aviation has been struggling.

It’s interesting news that’s boded well for us. The demise of the commercial aviation system and the rise in business aviation are connected. Travel is a business necessity, and it’s becoming increasingly difficult with the failing commercial aviation system. We have a corporate client which travels back and forth from Wichita to Seattle. They were finding that if they had important meetings in Seattle they’d be spending two days in travel, when they flew commercially.

I saw a survey recently where for the first time consumer airlines ranked below the IRS in terms of consumer trust. At the same time, private aviation is becoming more affordable. I think investors are realizing which way things are trending, and our new funding shows this. All that being said, we’re going through a general period where debt is hard to secure, fuel prices are going up, and there’s a great deal of uncertainty about the broader economic outlook. In light of that, I think our success in raising these funds is something really remarkable. But like my father told me, “there’s always money for great ideas and good business execution.”

Check back tomorrow for the second part of our interview with XOJet CEO Paul Touw, where he talks about going up against NetJets, and his company’s plans for global expansion.