NetJets

NetJets created the blue ocean of fractional jet ownership. Today, NetJets is a multibillion-dollar
business with the largest private jet fleet in the world – over seven hundred aircraft, flying over
one hundred seventy countries

NetJets observed that business travelers, the most lucrative mass of customers in the airline
industry, had two principal choices: They could fly business class or first class on a commercial
airline or the company could purchase its own aircraft to serve its corporate travel needs.

Commercial travel avoids the high up-front, fixed-cost investment of a multimillion dollar jet
aircraft. Also, a company purchases only the number of corporate airline tickets needed per year,
lowering variable costs and reducing the possibility of unused aviation travel time that often
accompanies the ownership of corporate jets. On the other hand, corporations buy private jets to
dramatically cut total travel time, to reduce the hassle of congested airports, to allow for point-to-
point travel, and to gain the benefit of having more productive and energized executives who can
hit the ground running upon arrival.

To create a blue ocean NetJets built on these distinctive strengths. The result was the new market
space of fractional jet ownership. Here customers don’t buy a jet outright. They only buy a small
fraction of it. The result is that buyers get the convenience of a private jet at the price of a
commercial airline travel. NetJets’ smaller airplanes, the use of smaller regional airports, and
limited staff keep costs to a minimum. With point-to-point service and an exponential increase in
the number of airports to land in, there are no flight transfers; trips that would otherwise require
overnight stays can be completed in a single day. The time from your car to takeoff is measured
in minutes instead of hours. Perhaps most appealing, your jet is always available with only four
hours’ notice. If a jet is not available, NetJets will charter one for you. Last but not least, NetJets
dramatically reduces issues related to security threats and offers client’s customized in-flight
service.
By offering the best of commercial travel and private jets and eliminating and reducing
everything else, NetJets opened up a multibillion-dollar blue ocean wherein customers get the
convenience and speed of a private jet with a low fixed cost and the lower variable cost of first-
and business-class commercial airline travel. Now, nearly thirty years later, NetJets share of the
blue ocean it unlocked still stands a staggering five times greater than that of its nearest
competitor.

As the NetJets case study illustrates, insight into new market space can be gained by shifting an
organization’s focus from competing within to looking across defined industry boundaries.
NetJets Compared to Wheels Up
Written by Robin Catalano

Published: 20 January 2018

With dozens of private aircraft service and jet card companies now vying for your business, it’s
challenging to choose between the many types of pricing, services, and value-added bonuses.
Here we break down the differences between venerable NetJets and newcomer Wheels Up.

History & Background

NetJets, founded by three retired military pilots in 1964 as Executive Jet Aviation, is the
granddaddy of fractional ownership and private jets. Since its inception, it has grown from a fleet
of ten Learjet 23 aircraft to 10 types of planes and nearly 700 aircraft worldwide—the world’s
largest private jet fleet.

Richard Santulli, a mathematician and former executive with Goldman Sachs, purchased the
company in 1984. After poring over 22 years’ worth of pilot logbooks, he crafted an innovative
new model of fractional aircraft ownership. NetJets was renamed in 1984 and acquired by
Warren Buffet, a NetJets share owner, in 1998, who added it to the Berkshire Hathaway
umbrella. NetJets subsequently acquired the Marquis Jet Card program in 2010.

At just four years old, Wheels Up has homed in on reducing the up-front costs of private flying
and offering a value-added experience. The company was created by businessmen Bill Allard
and Kenny Dichter, the “Kevin Bacon of entrepreneurship,” and offers a mobile app that allows
members to manage their accounts, book flights, look for ride-share opportunities and private
shuttle flights at a reduced cost, and find discounted one-way fare on empty-leg flights.

Unlike NetJets, Wheels Up doesn’t operate its fleet of 75 aircraft; instead Gama Aviation is the
operator of the Wheels Up King Air and Citation aircraft and provides two FAA ATP licensed
pilots for every flight. Wheels Up’s specialty program, Wheels Down, connects members to
exclusive events and experiences, a luxury concierge service, and additional benefits valued at
up $25,000. The company is currently eyeing an expansion into Western Europe and other
overseas markets.
Aircraft

Both Wheels Up and NetJets own their fleet, which means your plane will always be fitted out in
a standard configuration, with the latest equipment and technology.

NetJets offers four sizes of aircraft:

Light Cabin
Known for their speed and ability to land on the shortest runways and at the smallest, most
remote airports, NetJets’ Light Cabin aircraft are available with as little as four hours’ notice.

 Cessna Citation Encore—up to 7 passengers; 69 cubic feet baggage capacity; 3,122 km range.
Built to climb faster to altitude, for a more comfortable ride and additional range.
 Embraer Phenom 300—up to 6 passengers; 74 cubic feet baggage capacity; 3,196 km range. One
of NetJets’ most requested aircraft, thanks to its comfortable interior.
 Cessna Citation Excel/XLS—up to 7 passengers; 79 cubic feet baggage capacity; 3,441 km range.
Offers the amenities of a midsize-cabin jet with the ability to fly into and out of smaller airports.
Midsize Cabin
NetJets’ midsize-cabin aircraft offer additional space for work and comfort, and are capable of
flying longer distances.

 Hawker 900XP—up to 8 passengers; 40 cubic feet baggage capacity; 5,153 km range. Nicknamed
the “spacious conference room in the sky,” the Hawker is known for its comfortable cabin and
speed.
 Cessna Citation Latitude—up to 7 passengers; 100 cubic feet baggage capacity; 4,937 km range.
This midsize jet measures 6 feet in cabin height and has the largest cross-section in NetJets’
midsize class.
 Cessna Citation Sovereign—up to 8 passengers; 100 cubic feet baggage capacity; 5,219 km
range. Able to fly longer ranges in high elevations.

Super-Midsize Cabin
Extended ranges, speed, larger passenger capacity, and flexible seating configurations make
these jets the top choice for transcontinental business travel.

 Cessna Citation X—up to 8 passengers; 72 cubic feet baggage capacity; 5,476 km range. This
nimble aircraft is reputed to reduce cross-country travel by up to 35 minutes.
 Bombardier Challenger 350—up to 9 passengers; 106 cubic feet baggage capacity; 6,047 km
range. One of the longest flying ranges of all private jets.

Large Cabin
The top choice for global flyers, these aircraft—staffed by a NetJets flight attendant—can
transport up to 14 passengers for up to 14 hours. Large Cabin aircraft flights also feature luxury
food service.

 Dassault Falcon 2000/2000EX—up to 10 passengers; 134 cubic feet baggage capacity; 5,429 km
range. This aircraft mixes business with pleasure, offering flexible conference and club seating
and a comfortable large-cabin feel.
 Bombardier Challenger 650—up to 11 passengers; 115 cubic feet baggage capacity; 6,833 km
range. Considered a world-class large-cabin jet, the Challenger 650 provides optimal comfort
and mobility during coast-to-coast and even intercontinental flights.
 Gulfstream IV-SP/G450—up to 13 passengers; 169 cubic feet baggage capacity; 7,242 km range.
Another great choice for intercontinental flights.
 Bombardier Global 5000—up to 13 passengers; 195 cubic feet baggage capacity; 10,452 km
range. Designed for premium comfort, this large-cabin aircraft is a popular choice for
transatlantic trips.
 Gulfstream G550—up to 14 passengers; 226 cubic feet baggage capacity; 11,975 km range. A
descendant of the Gulfstream V, this is an ultra-long-range business jet.
 Bombardier Global 6000—up to 13 passengers; 195 cubic feet baggage capacity; 11,632 km
range. Known for its transpacific performance, this speedy jet has long range.

The Wheels Up fleet is more streamlined, featuring just two types of aircraft:
  King Air 350i—up to 8 passengers; 71 cubic feet baggage capacity; 3,345 km range. This twin-
turboprop aircraft, part of a line that’s been in continuous production since 1974, is built for
short to medium distances.
 Cessna Citation Excel/XLS—up to 7 passengers; 79 cubic feet baggage capacity; 3,441 km range.
Offers the amenities of a midsize-cabin jet with the ability to fly into and out of smaller airports.

Availability

For NetJets fractional owners, 4 to 6 hours’ notice is required, and there are 15 peak period days
(with 48 hours’ notice required during peak periods).

The company also offers two jet card programs, its original Marquis Jet Card and a newer Elite
Jet Card. For Marquis Jet Cards, 10 hours’ notice is required for booking, and there are 30 to 45
peak days (with 120 hours’ notice required during peak). FET is excluded from the overall price,
and flights are subject to a fuel surcharge.

Elite Jet Cards are offered in 25-hour blocks on its two Citation light jets. Minimum booking
notice is 24 hours, and there are 45 peak days per year, also with 120-hour minimum booking
notice. It’s important to note that a 25% premium is assessed for hours on peak days, unlike with
the Marquis card, where you’re charged for actual flight time only. Elite pricing includes FET
and fuel.

For all three NetJets programs, downgrades are guaranteed, and upgrades are subject to
availability, within 24 hours of making a request. Card program members can also expect extra
fees for international travel, ground transportation, and other miscellaneous charges.

Wheels Up gives members access—with guaranteed availability 300 days a year for individuals
and 315 days a year for businesses—to its entire fleet with as little as 24-hour notice. For their
prepaid programs, both hours-based and fund deposit–based, as you purchase more, three
changes occur:

 The number of guaranteed availability days increases

 The number of peak days decreases
 The amount of time required for advanced booking decreases

Wheels Up also provides a flight desk for expert help in locating a larger aircraft or for when
their own aircraft are not available.

Hours, Memberships, and Pricing

A NetJets fractional membership gives you undivided interest in a chosen aircraft. Prices vary
according to the type of jet and flight frequency, with the minimum available fractional share
offering a 1/16 interest and 50 hours’ of flight time. There’s a one-time acquisition cost, plus a
monthly management fee and an occupied hourly fee for fuel, maintenance, catering, and
landing. After the minimum term, NetJets offers a guaranteed buy-back option if you opt out of
the program.

NetJets Marquis Jet Cards are made for people who fly fewer than 50 hours per year. Prepay for
flight time on the aircraft of your choice, and you have access to it for 25 hours at a time over 18
months, with the flight time deducted from your card balance. Pricing starts in the neighborhood
of $165,000.

Wheels Up operates on a pay-as-you-fly model with no minimum hourly commitment.

Individuals pay an initiation fee of $17,500 ($29,500 for businesses), with annual dues in year
two and beyond priced at $8,500 for individuals ($14,500 for businesses). Members pay a fixed
hourly rate only for occupied flights: $4,295 on the King Air and $7,495 on the Citation
Exel/XLS.

Wheels Up also offers a pre-purchase block, available in increments of $50,000, $100,000,

$200,000, and $400,000, which unlocks access to additional guarantees, fewer peak days, and
other benefits; the cost of each flight is deducted from the block.

Terms
NetJets’ fractional ownership has a minimum term of 36 months, while its Marquis Jet Cards are
good for 18-months. Wheels Up has an annual renewable membership.

NetJets and Wheels Up both offer a range of compelling options for luxury personal and
business travel. The type of ownership, membership or card program you choose will depend on
a variety of factors including how often you need to fly, how many amenities you prefer to have,
how much notice you’re able to give, and which aircraft type is most suitable.

If you are actively comparing NetJets and Wheels Up, or looking at other leading providers, then
subscribe to our members only comparisons. This gives you access to side by side, detailed
comparisons of the key features for the leading fractional providers, and jet card and membership
companies in North America.
 Fleet Size
Number Aircraft 700+
Aircraft
Citation ENCORE+/ENCORE
Light Jets Phenom 300
Citation Excel/XLS
Hawker 900XP/800XP
Midsize Jets
Citation Sovereign,
Citation X
Super Midsize Jets Gulfstream G200
Challenger 350
Falcon 2000EX/2000
Challenger 650
Gulfstream G450/GIV-SP
Large Jets
Gulfstream G550/GV
Global 5000
Global 6000
Products
Charter Yes
Cards Yes
Membership/Lease Yes
Fractions Yes
Aircraft
Yes
Management

Description

NetJets is one of the world's first aircraft management businesses and was the pioneer of
fractional ownership in 1986. Warren Buffett bought the company in 1998, adding it to the
Berkshire Hathaway empire.

Today, NetJets has over 6,300 employees dedicated to the safe and efficient operation of over
285,000 flights annually to 170 countries and 2,200 airports. The NetJets worldwide fleet is
equivalent in size to the world's second largest airline and is comprised of 13 different aircraft
types.

NetJets offers a full range of private aviation solutions to satisfy almost every travel need,
including the NetJets Share, the NetJets Lease, the Marquis Jet Card, and the NetJets Europe
Private Jet Card as well as aircraft management and on-demand charter services through its
subsidiary, Executive Jet Management. With operations in the United States and Europe and
more recently China, NetJets is truly a global company.
The NetJets owner roster encompasses some of the most successful companies and people in the
world.

Read the articles below for more information about NetJets.