NetJets, the founders of private jets fractional ownership and leaders in the industry, has created a business model that allows Owners to buy the hours they need to fly rather than the plane itself. See how the company is transforming to take advantage of this jump in share economy understanding.
Celebrities, dignitaries, and the upper echelons have enjoyed private, luxury transportation via aircraft for decades. Taking a private flight has been a status of wealth since commercial flight was introduced.
But owning a plane and employing the staff might prove to be too much of a cost, or at the very least too much of a hassle, for the owner. Having such an expensive asset sitting around for the majority of the time may not be worthwhile. But what about shared ownership of a plane?
NetJets sells part ownership of its private jets. It’s the perfect solution for a superstar performer at the height of his or her career, political figures required to travel the world, and business executives who coast hop for business.
The surprising factor for many people who are exposed to the business model of NetJets for the first time is that they had no idea how accessible an option like this truly is.
“That was really how the business originated,” shared Patrick Gallagher, EVP of Sales and Marketing. “Private aviation is more accessible to a larger audience than most people can believe. With the rising awareness of the sharing economy, we can bring our model of air travel to more people than ever.”
The company was founded by Air Force generals in 1964 as Executive Jet Aviation. These entrepreneurs worked for the special air mission wing of the Air Force, which operates Air Force One, as well as smaller planes and helicopters to transport the president and other important officials.
Why couldn’t they turn this service into an on-demand air taxi business in the private sector? So they did. The acquisition of the company by Berkshire Hathaway in 1998—Warren Buffett became a customer in 1995—boosted the business, providing the necessary level of financial backing to expand into the business it is today.
Fifty-two years later, NetJets has the world’s largest fleet of private jets and $4B in revenue.
“No one comes close to us in terms of scale,” said Gallagher. “It allows for us to provide an unparalleled level of access. Our Owners can have an aircraft anywhere in the world on short notice, we can connect two far-flung places, and we can get onto small runways.”
Although NetJets is already a leader in the industry, the company understands the importance of staying ahead of the game.
To do this, NetJets is investing heavily in all areas of the business. While its fleet, culture, and safety practices benefit from the company’s approach to continuous improvement, NetJets’ clients benefit from a culture that puts its customers first, and one of the safest fleets in the skies.
In 2010, as the market was recovering from the Great Recession, NetJets made an opportunistic decision to start investing in the renewal of its fleet. Large purchase orders—to the tune of over $17 billion—were made for what the company leaders believed to be the best-in-class private jets in each category.
“We wanted to refresh our fleet, and make sure the aircraft we invested in would be able to fly for many years to come,” said Gallagher. “I believe we’ve accomplished this.”
Since placing the orders, NetJets has taken delivery of 100 new aircraft. Big orders like the ones NetJets placed are commonplace in the industry, but they are not always fulfilled. Where many companies decide they don’t want or can’t support the products they ordered, NetJets is exercising its options above and beyond its original order.
The New Aircraft
NetJets’ new fleet is truly impressive, and the company’s clients are taking notice. Technology improvements have been made, but the biggest, most noticeable upgrades on NetJets’ planes can be found in the cabin interior. After all, “customers aren’t flying the planes,” said Gallagher.
“The latest in avionics is incredibly important to us, and we have the latest and greatest technology to support our pilots. Our investments in technology are always about creating a better experience for the customer.
“We’ve created a new proprietary system to track pilot alertness. It records countless different inputs and allows us to build pilot schedules around these data points. This is just one example of us going above and beyond FAA regulations.”
But NetJets’ Owners turn right at the top of the steps, so creature comfort is definitely at the top of the company’s list.
Custom fitted interiors adorn the inside of each plane. The materials and designs on the private jets are chosen to wear well. Hardy but beautiful carpet patterns, leathers, and woods handle normal wear and tear very well so the aircraft always looks brand new.
Owners can sync their phones to the NetJets-provided Wi-Fi and talk and text from 40,000 feet. Proprietary entertainment with the latest content available, amp sound dampening, and many other carefully chosen details fill each plane in the company’s fleet.
Let’s be clear: NetJets didn’t need to invest in a new fleet or commit to an upgrade of its company culture to hold the number one spot in the marketplace it created. The company and its executive team, however, know that continuous improvement in every area of the business can only guarantee continued success.
That’s why the 20/20 Flight Plan—a reupping of culture strategies—was created at the end of last year. It was the perfect timing to up the ante on NetJets’ culture: with a new chairman as of July 2015 and a renewed executive team in place, the company was ready to take their already strong company culture to the next level.
Like all decisions made at NetJets, every change and improvement to the company’s culture is made with one mission in mind: to enhance the life of each Owner, one exceptional travel experience at a time.
“Our goal internally is to show every employee that even if his or her role with NetJets isn’t Owner-facing, you’re facing an internal customer who then serves the Owner,” said Diana Oreck, EVP of Owner Experience. “There is no ‘I’m just a janitor,’ or ‘I’m just in Dispatch’ at this company. Every employee holds the brand in their hand.”
Company-wide, there are four major goals that NetJets’ culture and the 20/20 Flight Plan are built around: zero safety mishaps, team members’ likelihood to recommend, Owner likelihood to recommend, and providing a fair return to shareholders.
The 20/20 Flight Plan was instituted this past July, and included five modules taught over a full-day class.
“It’s the great equalizer,” Oreck said. “It’s a strategy for safety, teams, for our private jets, for our finance team, to build strength and resilience: it covers everything. And everyone is going through it: we all start on the same playing field. Service is everyone’s job, and our 20/20 Flight Plan really brings that idea home and inspires us with one common mission.”
Above and Beyond the Call of DutyThe importance of NetJets’ level of continuous improvement may be apparent now, but the reality is that it’s quite unusual to have this commitment to quality across a company in corporate America.
For a variety of reasons, quality departments in many U.S. businesses have shrunk. After the recession, quality and training programs and services were often the first to go. The fact that NetJets has a dedicated quality department shows the company’s commitment to its Owners.
And for as much emphasis as the company has put on its in-flight experience, Gallagher knows that NetJets’ service goes beyond the time in the air.
“What we offer goes beyond a flight. Our clients get to experience once-in-a-lifetime opportunities because of it, and they get to do so with the peace of mind that comes with being a long-established company in the industry,” he said.
“I’ve seen a dozen companies like us come and go in the last decade. We’ve been here for 52 years, and our clients know we’re going to be here for 52 more.”
From our strict maintenance and operational procedures to the advanced technology on our planes and our rigorous pilot-training program, safety is at the forefront of all we do.
We aim to give NetJets Owners total peace of mind. We thoroughly screen employees, tightly control aircraft access, and work closely with authorities on the ground to provide risk and threat assessment on an international scale.
A dedicated Owner Services Team is on hand 24 hours a day, 365 days a year to ensure your NetJets experience is flawless. They use our advanced IntelliJet flight tracking and reservation system to meet all your travel needs, from ground transportation to in-flight catering and everything in between.