8/31/2023 0 Comments Netjets pricing 2016That successful strategy worked effectively right through the 2008 economic downturn, and forced less-nimble competitors into emergency landings. The NetJets flight center in Columbus, Ohio, overseeing a fleet of 710 jets.īut NetJets still has a commanding 72% share of the fractional private-jet market, figures an aviation analyst at Rolland Vincent Associates, and it stays ahead of the pack by adapting its business model to a market consistently in search of “more.” Patrick Gallagher, NetJets’ senior vice president of sales, says the firm helped differentiate itself from the competition by building its own dedicated passenger terminals at airports and by consistently buying “best in class” aircraft. Furthermore, the firm is surrounded by hungry competitors, such as Flight Options, General Dynamics’ Jet Aviation, and even well-run regionals like Executive AirShare. NetJets Europe, for example, lost money for a decade before turning the corner in 2012. The company did not respond to our request for comment.īuffett admits that NetJets is a slow-growth business and once even conceded that he had been “dead wrong” about its profit potential. The suit also charges that NetJets “unlawfully accessed and obtained confidential communications” from a union Internet message board that was allegedly password-protected. During the continuing hardball contract negotiations under way, the pilot union sued NetJets, claiming that the company used a bogus Twitter account where an “impostor” pilot tried to goad members into committing unlawful acts. ![]() The company’s most vociferous critics at the moment seem to be many of its own 3,000 pilots, who complain of being overworked. Buffett’s recent Berkshire shareholder letter suggests that NetJets generates more than $4 billion in annual revenue, and it’s believed to have been consistently profitable in recent years. With the help of Berkshire’s capital and shrewd fleet buys, consistent service, and high standards, NetJets has grown steadily and today is the undisputed leader in the fractional-ownership game. That was three years after Buffett himself became a customer. In 1984, EJA was sold to former Goldman Sachs executive Richard Santulli, who used it in 1986 as the launching pad for NetJets, which in turn was sold to Warren Buffett’s Berkshire Hathaway in 1998. NETJETS TRACES ITS ROOTS to a company called Executive Jet Aviation, or EJA, founded in 1964 by many legendary pilots, some of whom were retired Air Force generals, including Curtis “Bombs Away” LeMay, who reorganized the Strategic Air Command. Without tax considerations, fractional ownership is more expensive than charter, but add in the depreciation possibilities from owning a share of an airplane, and it can at times be less expensive. ![]() ![]() But there’s also a monthly charge to help defray the fixed costs of ownership-salaries, insurance, storage, refurbishment, and scheduled maintenance-plus additional charges, such as $2,029 for each “owneroccupied hour” aboard the aircraft. ![]() Example: A 25% share in a new NetJets Embraer Phenom 300 costs a customer $2.25 million upfront and guarantees up to 200 flight hours per year. What you are paying for is a consistent level of equipment and service, guaranteed aircraft access, and not having to manage your own aircraft and crew.Ī regular NetJets fractional owner pays an upfront charge for a “fraction” of the aircraft and receives annual flight hours. Headquartered in Columbus, Ohio, NetJets succeeds by selling a go-anywhere lifestyle wrapped in convenience, taking the hassle out of aircraft ownership. A quarter share in NetJets’ Phenom 300 by Embraer costs $2.25 million upfront.
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