NetJets

1960s

The company was founded in 1964 and originally known as Executive Jet Airways. The name was later changed to Executive Jet Aviation (EJA), and again in 2002 to NetJets, after Berkshire Hathaway purchased it in 1998. NetJets was the first private business jet charter and aircraft management company in the world. The idea came from retired Air Force Brigadier General Olbert F. "Dick" Lassiter, who had experience running the Air Mission Squadron, an air taxi service for the Air Force. The idea was to run a similar service for private companies, with a pool of corporate jets providing transportation instead of each company having to purchase and maintain their own plane. The founding members of the board of directors included US Air Force generals Curtis E. LeMay and Paul Tibbets, Washington lawyer and former military pilot Bruce Sundlun, and entertainers and pilots James Stewart and Arthur Godfrey, with Lassiter serving as president and chairman of the board.

Shortly after its founding, EJA began receiving regular investments from the Pennsylvania Railroad (PRR), which were managed by accountant David Bevan. In June 1965, the railroad purchased a majority of shares in EJA, despite the fact that rail carriers were barred from owning air carriers by the Federal Aviation Act of 1958. To hide the investments from the PRR board, Bevan made the payments through a subsidiary, the American Contract Company, which he was president of.

EJA initially began operations in 1964 with a fleet of ten Learjet 23 aircraft. The company soon moved to acquire competitors and larger aircraft, including two 707 jets and two 727 jets from Boeing, but these could not be operated in revenue service without being an airline, so EJA attempted to buy Johnson Flying Service (JFS), a small Montana charter airline. EJA even negotiated an order for Lockheed L-500s, the nascent civil version of the C-5 Galaxy, contingent on acquiring JFS, which required approval from the Civil Aeronautics Board (CAB), the now-defunct Federal agency that, at the time, tightly controlled almost all commercial air transport. The PRR argued its EJA stake was legal as it consisted of non-voting stock. Anticipating CAB approval, EJA licensed its larger jets to foreign airlines. But the CAB saw PRR's involvement as illegal, EJA found itself deeply unprofitable, and the PRR attempted to sell off its stake. However, potential buyers lost interest after corporate spies for Pan Am acquired and leaked information on EJA's illegal interests. The PRR merged into Penn Central in 1968, and the search for a buyer continued. Penn Central and EJA were ultimately fined $70,000 by the CAB in 1969.

In 1970, the trustee for Penn Central's EJA shares voted to oust Lassiter and replace him with Bruce Sundlun. On July 1, the day before he was voted in as president, Sundlun led a midnight raid on EJA's corporate offices with the assistance of Pinkertons. Lassiter attempted to retake the office with armed guards of his own shortly after, but they were stopped by Sundlun's guards. Lassiter was later sued for his role in diverting $21 million of PRR money into EJA, much of which had gone to his personal expenses. Sundlun, Robert L. Scott Jr. and Joseph S. Sinclair bought out the Penn Central interest in EJA in 1972 and stabilized the company's finances. Paul Tibbets became president in 1976.

1980s

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. The majority of NetJets' US aircraft have registrations ending with QS, symbolizing the concept of selling quarter shares of an aircraft.

1990s

In 1998, Berkshire Hathaway acquired EJA and NetJets Inc from Richard Santulli for US$725 million, half of which was paid in stock. NetJets soon expanded to Europe and then Russia, and by 2006, it was the largest operator of business jets in Europe.

2000s

The company operated a fleet of nine Boeing 737-700 Boeing Business Jets in the mid-2000s, since then sold off.

Subsidiaries

NetJets Europe, also known by its corporate legal name, NetJets Transportes Aéreos, S.A., was launched in 1996 as a sister company of NetJets and is now a subsidiary. It is based in Oeiras, Portugal, and serves more than 5,000 airports globally.

Also among NetJets subsidiaries is Executive Jet Management (EJM), based in Cincinnati, Ohio, which offers aircraft management and charter services. QS Partners is the whole-aircraft brokerage arm of NetJets, launched in 2016 and officing in Columbus, Ohio; Boulder, Colorado; and London; it also exclusively resells used aircraft from NetJets' fleet. QS Security Services was launched by NetJets in October 2019 with "tiered security packages" based on passenger needs and threat level at destination. Initially only available at Paris Le Bourget and in Mexico, future plans include worldwide coverage by 2023.

Business model

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 monthly maintenance fees for a minimum of 50 annual flight hours and a five-year commitment, as well as operating fees by the hour for use of aircraft. Alternatively, customers may buy flight hours in 25-hour increments by way of jet card programs. Fractional owners also pay an occupied hourly operating fee, but it is charged only when an owner or guest is on board, not for ferry flights.