Jet Advisors Blog

NetJets

Posted on Tue, Feb 19,2013

Global 5000NetJets, a wholly owned subsidiary of Berkshire Hathaway, is the oldest and largest fractional program in North America and Europe, with a joint venture in China. NetJets began in 1986, but dates back to the mid-1960s because of its ties to Executive Jet Aviation. With a North American fleet of 366 and a European fleet of 160, NetJets’s position as the largest fractional program would be hard to dispute.

 

The NetJets North American fleet is very diverse when compared to other programs, such as Cessna, Hawker, Gulfstream, Dassault, Embraer and Bombardier. The fleet includes light jets, mid-size jets, super mid-size jets, and large jets. (A more complete list of jets in the fleet is below.) 

 

The programs offered are as follows:

  • Fractional purchase, with a minimum purchase of 50 hours (6.25% share). The fractional purchase can be financed in house by NetJets.

  • Fractional lease, with same minimum as with a purchase. 

  • Jet card in 25-hour increments. The jet card is offered through Marquis Jet, a wholly owned subsidiary.

 

Each option's available aircraft types vary based on age, new entries to the fleet, and the relative demand for a specific type.

 

Fractional purchase (or finance) and fractional lease normally offer 5-year deals with predictable pricing with the option to terminate in 24, 30 or 36 months based on aircraft type. The only exceptions to the predictable pricing are a fluctuating fuel surcharge, which is based on NetJets's actual fuel costs for the applicable month, and - in the case of fractional purchase - an unknown residual value of the asset at termination. With fractional purchase, the client buys the asset at closing and then pays a monthly management fee, per-hour flight charge, and a fluctuating fuel surcharge. The fractional lease is very similar to the fractional purchase, but instead of paying the asset cost upfront, you pay a monthly lease fee.


The Marquis Jet Card offers 25-hour programs (1 year term), 50-hour programs (2 year term), and combo cards which are 25-hour cards split between two aircraft types of the buyer’s choice (1 year term). The 25- and 50-hour card terms can be extended for up to 3 years, but additional restrictions and charges apply during the second and third years. Also with the combo card, depending on aircraft selection, additional restrictions may apply on peak period days. With any of the card options, you pay a flat fee upfront and then each month you fly you pay an additional fuel surcharge based on the number of hours flown.

Cost-wise, the Marquis Jet Cards are the most expensive, followed by the lease program, with the fractional purchase/financed program pulling up as the least expensive. However, the final cost of the fractional purchase/lease program is hard to calculate upfront since a large portion of the cost is driven by market conditions and the value of the aircraft share at time of termination.

 

Jets in the NetJets Fleet

Topics: fractional, fractional ownership, jet card, NetJets