See full version: NetJets drops Marquis Jet brand
Wheels Up, along with jet card inventor Sentient Jet, helped popularize the pre-paid flight programs. They offered flyers fixed rates, one-way pricing, eliminating repositioning fees, and guaranteed availability with as little as 10 hours’ notice. Today over 60 jet card providers are bridging the gap between ownership and on-demand charter. here
NetJets has been expanding its jet card line-up. It features the Embraer Phenom 300, Cessna Citation XLS, Sovereign, and Latitude, Bombardier Challenger 350 and 650. [links]
The Marquis Jet Partners website from 2003. Credit: Wayback Machine
Card flyers account for about 20% of NetJets’ flight hours, according to executives. Based on Argus data, that would equate to about 60,000 flight hours. That’s similar to leading Part 135 charter operator Gama Aviation, now owned by Wheels Up. [links]
At the time, NetJets only offered shares and leases. The starting point was 50 flight hours per year with a minimum of a three-year commitment. here
“I think the expense issues (at NetJets) have largely been resolved. The question is what happens on the revenue side,” Shields said. “The Embraer order is certainly a reflection of anticipated demand improvement.” here
Speaking on CNBC television, Sokol said Buffett is for now “in great shape” and “not going anywhere.” Sokol also praised Todd Combs, named on October 26 to run some Berkshire investments, saying the hedge fund manager should do a “great job.”
Terms of the sale were not disclosed. here
Based in Omaha, Nebraska, Berkshire is expected to report third-quarter results after U.S. markets close on Friday. It has roughly 80 operating units and tens of billions of dollars of common stock investments.
Buffett installed Sokol at NetJets in August 2009 to slash capacity and a $1.9 billion debt load after difficult economic conditions curtailed business travel. Sokol reduced headcount and sold old planes in a bid to turn the company around. more
Marquis Jet sold its first jet card on June 1, 2001 and by 2007 had grown into a $700 million per year business with 3,500 customers, selling business jet flying in 25-hour increments. Buyers were paying for a “pre-paid lease of a specific aircraft,” according to Marquis Jet. All flights were conducted as Part 135 charters. During his 2007 interview with AIN, Dichter predicted that Marquis Jet would grow into a billion-dollar business by 2010. here
NetJets lost some of its creative energy in July when Marquis Jet founder and former CEO Kenny Dichter resigned as vice chairman of the company. NetJets, a Berkshire Hathaway company, bought Marquis Jet last November, as part of the NetJets 10-year business plan under then-chairman and CEO David Sokol. Dichter plans to “serve in an advisory capacity,” to NetJets for the next year, “focusing on branding, product development and owner engagement.”
On Nov. 4, 2010, NetJets announced that it had purchased Marquis Jet, which at the time owned 65 aircraft in the NetJets fleet. Terms of the transaction were not disclosed, but at the time NetJets said that year-over-year sales for both NetJets and Marquis Jet were up 8 percent and 6 percent, respectively. here
Asked about Dichter’s contributions to NetJets, Santulli told AIN, “Kenny built a great company in Marquis Jet. He is one of the most creative and clever marketing people I’ve ever met. He’s a really bright guy, started with nothing and built the first real jet card business in the industry. It was brilliant and did a great job. It’s sad to see him go. He had something, kind of like if you watch the film The Natural. He was the natural in the aviation business. He’s a special guy.”
Dichter’s entrepreneurial efforts saw early success when he started an on-campus retail store selling college-related T-shirts, sweatshirts and hats at the University of Wisconsin-Madison. He and partner Jesse Itzler later founded Alphabet City, a sports-compilation CD company that they sold to SFX Entertainment in 1998. more
– Downgrades are guaranteed; Upgrades aren’t
– We’re not fans of fuel surcharges – they vary monthly – although Gallagher says the Elite Card, which includes fuel surcharges and FET, is racking up strong sales since its 2017 launch. [links]
– There are no roundtrip discounts
“Quality is remembered long after price is forgotten,” said fashion designer Aldo Gucci in 1938, and to that Gallagher makes the case that safety is expensive. He says, “First and foremost you know whose aircraft you are flying (with NetJets). We have an enviable safety record. We hire the best. We pay the best.” more
– With PSAs in North America and Europe, NetJets is a good program if you fly on both sides of the pond. here
As an example, he notes, NetJets pilots average 10,500 flight hours and every NetJets pilot is type-rated in the aircraft they fly and he or she flies only that type so they aren’t switching aircraft types. Training includes two times per year in state-of-the-art Flight Safety simulators. Having pilots dedicated to a single aircraft type is not particularly efficient, but the idea is the pilots critically know their aircraft type inside and out. It’s not uncommon that in air crash investigations one or both pilots have limited experience in the aircraft type they were flying at the time of the accident. more
You have some major competitors. How do you differentiate yourself?
I'll give you two words: Berkshire Hathaway. And NetJets. We have the best partner we could ever have as it relates to the delivery of a product. Our business is not a commodity business. If you boil down Marquis Jet to its essence, it's NetJets 25 hours at a time. It's a totally different product when we sell against competition. It's not Coke and Pepsi.
How does that differ from NetJets?
It's relatively higher on the net-worth piece, but it's really determined by how many hours you fly in a year. You might be worth $1 billion, but fly only 35 hours a year. Although you could buy three airplanes, it's smart for you to buy a card and a half on Marquis. We may be 10 or 15 percent more expensive than NetJets on an hourly basis, but you pay that little premium for the convenience of not having to be committed beyond the 25 hours at a time. We're also 80 percent personal to 20 percent corporate while NetJets is 50-50. here
Editor's note: Kenny Dichter moved on from Marquis Jet the year after we conducted this interview. In 2013, he founded Wheels Up, where he still serves as CEO.