NetJets Inc., a subsidiary of Berkshire Hathaway, is an American company that sells part ownership or shares (called fractional ownership) of private business jets. NetJets was founded in 1964 as Executive Jet Aviation. It was the first private business jet charter and aircraft management company in the world.
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History
NetJets Inc., formerly Executive Jet Aviation, was founded in 1964 as the first private business jet charter and aircraft management company in the world. The founding members of the board of directors included Air Force generals Curtis E. LeMay and Paul Tibbets Jr., Washington lawyer and former military pilot Bruce Sundlun, and entertainers and pilots James Stewart and Arthur Godfrey, with retired Air Force Brigadier General Olbert F. "Dick" Lassiter serving as president and chairman of the board. EJA initially began operations in 1964 with a fleet of ten Learjet 23 aircraft. Bruce Sundlun became EJA president in 1970, and Paul Tibbets became president in 1976. By the late 1970s, EJA was doing business with approximately 250 contract flying customers and logging more than three million miles per year.
In 1984, Executive Jet Aviation was purchased by mathematician and former Goldman Sachs executive Richard Santulli who owned a business that leased helicopters to service providers of offshore oil operations. When Santulli became chairman and CEO of the corporation, he closely examined 22 years of pilot logbooks and began to envision a new economic model where several individuals could own one aircraft.
In 1987, the NetJets program was officially announced becoming the first fractional aircraft ownership format in history. Around the same time, painted on every NetJets U.S. aircraft was a three-digit tail number punctuated with QS, symbolizing the revolutionary concept of selling Quarter Shares of an aircraft--a feature that is still representative of the NetJets brand today.
One of the first quarter-share Owners of the Hawker 1000 was Berkshire Hathaway CEO, Warren Buffett, in 1995. He quickly determined the fractional ownership concept was the future of private aviation and in 1998, Berkshire Hathaway acquired EJA and NetJets Inc.
NetJets soon expanded to Europe and then Russia, and by 2006 was the largest supplier of business jets in Europe and the ninth largest air carrier overall on the continent.
In early August 2009 Santulli resigned as CEO and was replaced by David Sokol. NetJets Inc. has moved its corporate headquarters from New Jersey back to its original home in Columbus, Ohio, following the departure of the company's founder, Richard Santulli.
In 2010, NetJets acquired Marquis Jet from founders Jesse Itzler and Kenny Dichter. The prepaid Marquis Jet card allowed customers to purchase 25 hours of guaranteed flight time on the NetJets fleet.
In September 2014, NetJets acquired approval to launch its aircraft charter service in China, having worked with Chinese authorities since 2012 to secure the operating certificate.
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Operations
NetJets sells fractions of specific aircraft, chosen from several available types at the time of purchase. Owners then have guaranteed access (50-400 hours annually, depending on share size) to that aircraft with as little as four hours notice. If the Owner's aircraft is unavailable for some reason, another aircraft of the same type, or a larger aircraft, will be provided. Fractional Owners pay a monthly maintenance fee and an "occupied" hourly operating fee. The latter is charged only when an Owner or guest is on board, not when the aircraft is flying to a pick up point, or flying to another location after completing a flight.
For companies or individuals that require less than the minimum 50 flight hours and the five-year commitment of fractional ownership, they can buy flight hours in 25-hour increments.
Taxes
NetJets has been involved in a tax dispute with the US Internal Revenue Service. Commercial airlines are charged a tax per passenger ticket to pay for various Federal Aviation Administration activities. General aviation operations are not charged the same tax. The IRS has argued that the NetJets fractional ownership model is really disguised commercial aviation in some cases, and has assessed NetJets with unpaid taxes and penalties exceeding $366 million. NetJets has sued the IRS over this assessment and previously paid taxes and penalties exceeding $643 million. The recent FAA re-authorization bill contains a provision that would (temporarily) address the issue by changing the law to support NetJets and other fractional ownership companies.
Fleet
NetJets' fleet is the largest private jet fleet in the world with nearly 700 aircraft worldwide. Jets in their fleet are classified by cabin size:
Orders
On June 11, 2012, NetJets placed the largest aircraft order in private aviation history totaling $17.6B. NetJets placed a firm order for 30 Bombardier Global 5000/6000 jets, 0 Bombardier Challenger 650 jets, 0 Bombardier Challenger 350s, 25 Cessna Citation Latitudes and 50 Embraer Phenom 300s. As a part of this purchase agreement, it also placed conditional orders for an additional 40 Bombardier Global 5000/6000s, 42 F-42, 50 Bombardier Challenger 650, 125 Bombardier Challenger 350s, 1 Cessna Citation Latitude and 75 Embraer Phenom 300s.
NetJets companies
- Executive Jet Management, Inc.: Manages on-demand air charter services, charter aircraft management, and aircraft management services. Based in Cincinnati, Ohio, United States
- NetJets Aviation, Inc.: Operates all aircraft in the NetJets US fleet. Based in Columbus, Ohio.
- Marquis Jet Partners, Inc.: Sells the Marquis Jet Card prepaid flight hours package. Became a wholly owned subsidiary of NetJets in 2010.
Affiliated companies
NetJets Europe is a completely owned subsidiary based in Lisbon, Portugal.
Accidents and incidents
- On May 2, 2002, NetJets Flight 397, a Citation 560, landed more than halfway down the runway in Leakey, Texas. The aircraft overran the departure end of the runway and collided with trees. A post-impact fire consumed the aircraft after the crew and four passengers were able to evacuate.
- On November 25, 2003, NetJets Flight 632 landed with the nose gear retracted for undetermined reasons.
- On August 18, 2004, Netjets Flight 961 experienced a landing gear failure in landing at Jackson, Wyoming. The two passengers and two crew members were not injured.
- On September 26, 2005, Netjets Flight 669 experienced a landing gear failure while taxiing for departure in Columbus, Ohio. The two crew members were not injured.
- On January 5, 2006, the crew of Netjets Flight 391 failed to maintain adequate airspeed during landing at the Woodruff, Wisconsin, airport. The right wing contacted the runway; the aircraft departed the runway and impacted a snow bank. The two crew members and five passengers were uninjured.
- On August 28, 2006, Netjets Flight 879, a Hawker 800XP, collided mid-air with a glider over Smith, Nevada, while on approach to Reno, Nevada. Flight 879 landed safely with only minor injuries on board; the pilot of the glider parachuted to safety.
- On May 27, 2011, NetJets Flight 749, a Gulfstream G-200, landed with the landing gear retracted in Newburgh, New York.
- On July 23, 2014, NetJets Flight 731, a Gulfstream G-200, experienced a tire failure upon landing in Aspen, Colorado.
- On September 19, 2014, NetJets Flight 322, an Embraer Phenom 300 arriving from Nashville International Airport, slid off the runway at Lone Star Executive Airport (IATA: CXO) in Conroe, Texas. The area had recently been inundated by the remains of Hurricane Odile. Both the pilot and co-pilot were hurt.
References
External links
- NetJets website
Source of the article : Wikipedia
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