Ride-Sharing With the Rich
How fractional jet owners get out of flying coach.
- By David Freed
- Air & Space magazine, August 2011
(Page 4 of 5)
NetJets officials and air crew members, who all sign agreements prohibiting them from publicly naming names, point out that most of their fractional owners are successful corporate types, not recognizable entertainers and athletes. They are, as a rule, down-to-earth people who savor their anonymity and require little pampering. That doesn’t mean they lack certain expectations.
Before takeoff to San Diego, Hart discovered to her dismay that the "fabulous" crab claws her passengers had ordered had not been cracked. "So I took full responsibility, just knowing that no owner is going to want to sit there and battle with these claws," says Hart, who demanded the caterers do the cracking. (They did.)
Given the money the average fractional owner shells out for his or her piece of a private jet, pre-cracked crab claws are a perfectly reasonable expectation. A Hawker 400XP, an airplane that seats up to seven passengers and that NetJets markets as "the ideal entry-level business jet," will run a Marquis card holder $115,900 for 25 flight hours (television personality Kelly Ripa holds a Marquis card). Buying a 1/16 share in one of NetJets’ larger airplanes, a nine-passenger Gulfstream G200, guarantees the fractional owner 50 hours of flying time annually, and costs approximately $600,000, depending on the age of the airplane (newer aircraft cost more). In addition to these one-time payments, owners pay fees to help offset operating expenses: pilot salaries, fuel, insurance, hangaring, aircraft maintenance, catering, landing fees, and so on. Those charges run owners $20,000 a month or more.
If a fractional owner decides that it’s all just too much, he can sell his share back to the company after five years for an amount based on his or her airplane’s fair market value.
There are other, less expensive ways to fly aboard private jets these days. A new company, Social Flights, allows users to book seats on chartered jets for point-to-point service for about the same price as flying a scheduled airline. Still, more than eight of 10 NetJets customers renew their contracts, says a company spokesperson.
Returning clients no doubt get hooked on the attention, especially when compared to the impersonal, cattle-car-like service that most commercial airlines offer. To accommodate owners afraid of turbulence, for example, NetJets pilots will navigate routes that steer clear of projected patches of rough air. For those fearful of flying over water, pilots have been known to follow shorelines for as long as possible, even if the route added hundreds of miles to a transoceanic trip. Good luck getting love like that from Delta or United.
NetJets traces its Ohio roots to 1964, when U.S. Air Force Brigadier General Olbert Fearing Lassiter, who had retired in Columbus, came up with the idea of selling chartered jet transportation to civilians, affording them the same kind of swift, luxurious air service to which Lassiter had become accustomed while a flag officer. He secured financing, acquired some Learjets and Dassault Falcons, hired mostly former Strategic Air Command pilots, and assembled a high-profile corporate board of directors that included, among others, actor Jimmy Stewart, himself a former bomber pilot and one-star Air Force Reserve general. Thus was NetJets’ predecessor, Executive Jet Airways, born.
Within 17 months, according to a June 1966 Time magazine story, EJA (later Executive Jet Aviation) had 87 clients and was earning nearly $3 million a year. IBM and Xerox executives regularly chartered the company’s aircraft. So did Playboy founder Hugh Hefner.
Paul Tibbets, pilot of the Enola Gay, the Boeing B-29 that dropped the atomic bomb on Hiroshima, took over as EJA president in 1976. Before the end of the decade, the company’s client list had nearly tripled.