NetJets Concepts

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank

by John Tamny · 30 Apr 2016 · 268pp · 74,724 words

The Credit Implications of the Fracking Boom TEN Conclusion: Sorry Keynesians and Supply-Siders, Government Is Always a Credit-Shrinking Tax PART TWO: BANKING ELEVEN NetJets Doesn’t Multiply Airplanes, and Banks Don’t Multiply Money and Credit TWELVE Good Businesses Never Run Out of Money, and Neither Do Well-Run

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to all), and that’s dangerous, as Part One has shown and Parts Two and Three will continue to reveal. PART TWO BANKING CHAPTER ELEVEN NetJets Doesn’t Multiply Airplanes, and Banks Don’t Multiply Money and Credit Banks borrow money in order to lend it. —Ludwig von Mises, The Theory

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, the best-known provider of private air transportation is Net-Jets. Based in Columbus, Ohio, and owned by Warren Buffett’s Berkshire Hathaway holding company, NetJets sells fractional ownership of the jets in its fleet of seven hundred planes. The benefits to the customer are fairly apparent. Whether they buy fifty

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plane they’ve purchased a fraction of with little notice required. Obviously, the bigger the fraction they buy, the more annual flight time they have. NetJets oversees the maintenance of each plane, makes sure the pilots are well-trained and licensed, and houses the planes. All of this means that fractional

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also have guaranteed access to it on short notice. This raises an obvious question: What happens if there’s a run on a specific NetJets plane? NetJets has more than seven hundred planes in its fleet and keeps adding to that number. If the jet partially owned by a customer is in

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use, the NetJets rule is they offer their customers another aircraft that is the same or similar to the one the customer partially owns, or, for that matter

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, a larger one in their fleet that’s not being used. What if there’s a rush on all the planes in the NetJets’ fleet at the same time? If so, just as hotels have overflow deals with other local hotels, so can

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NetJets access private air transportation outside its fleet for its well-heeled customer base. It’s neither the only owner of high-end aircraft nor the

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sole fractional-ownership jet company. What needs to be stressed is that despite multiple-person ownership of its planes, NetJets isn’t multiplying them. Even though NetJets has many multiples of seven hundred plane owners with guaranteed access at quick notice to the roughly seven hundred planes it its

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fleet, NetJets is not playing a trick on its customers. Without presuming to do its complicated math for it, I wager that Net-Jets understands probabilities. While

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credit is plentiful where production is plentiful, and it’s near nonexistent where there’s no incentive to produce. Much like the fractional owners of NetJets’ planes are guaranteed quick access to them, bank depositors are generally free to withdraw all the money they have deposited at any time. Yet at

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and demand all or part of what they’ve deposited at any given time. What’s happening here? Banks understand probabilities in the way that NetJets does. They know the odds are slim that all of their customers will demand their money at once, so they lend the majority of funds

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uses for what the borrowed dollars can procure. Also, assuming a rush of depositors comes to withdraw the monies deposited all at once, banks, like NetJets, can access other sources of credit. Not only are loans they’ve previously made constantly being paid off, banks can also borrow from other institutions

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(including other banks) that have a near-term excess of cash in their vaults just as NetJets can borrow the use of planes outside of its fleet. There’s nothing mystifying about this. Banks borrow from one another all the time. The

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depositors. Banks shouldn’t face any reserve requirements because well-run banks don’t need them. If NetJets experiences a situation where more jet owners want to fly on their jets than it has available, NetJets can easily borrow access from other commercial entities (including plane manufacturers themselves) with an excess of

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, 130, 151 Morgenthau, Henry, 167, 168 mortgage-backed securities, 150–52 mortgage lending practices, 119–20, 127 Mundell, Robert, 155, 158 Nelson, Richard, 159–60 NetJets, 85–86, 98 NetQoS, 123–24 The New Tycoons (Kelly), 126 NeXT Computer, 30 Nikkei index, 152, 159 1984 Summer Olympics, 34 1989 (album), 10

The Snowball: Warren Buffett and the Business of Life

by Alice Schroeder · 1 Sep 2008 · 1,336pp · 415,037 words

maintained it, the schedulers who got it to the gate on six hours’ notice, and the flight attendant who served their lunch all worked for NetJets, which belonged to Warren Buffett’s company, Berkshire Hathaway. Sometime later, the G-IV crossed the Snake River Plain and approached the Sawtooth Mountains, a

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and told the audience about the goody bag he had brought for them from Berkshire Hathaway. “I just bought a company that sells fractional jets, NetJets,” he said. “I thought about giving each of you a quarter share of a Gulfstream IV. But when I went to the airport, I realized

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and visit him; he gave lessons at the openings of furniture stores, the inauguration of insurance telemarketing centers, and dinners for would-be customers of NetJets; he gave locker-room talks to football players; he spoke at lunches with Congressmen; he educated newspaper folk in editorial board meetings; he gave lessons

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; how many pounds of See’s Candies had sold yesterday; how many prison-guard uniforms had been ordered from Fechheimers; how many jet time-shares NetJets was selling in Europe and the United States; and all the rest—awnings, battery chargers, kilowatt hours, air compressors, engagement rings, leased trucks, encyclopedias, pilot

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few wonderful ideas, and without calling the Air-a-holic hotline, Buffett now bought a company for Berkshire called NetJets for $725 million.10 He sold the Indefensible and became one of NetJets’ customers. This company sold time-shares in jets of various makes and sizes; its planes all had tail numbers

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that started with QS, or Quebec Sierra. Susie had gotten Warren to buy her a quarter share in a “fractional” jet from NetJets in 1995, worth two hundred hours a year of flight time, which she referred to as The Richly Deserved.11 She joked that QS stood

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for Queen Susie. Buffett took to NetJets so much that he had appeared in an ad and endorsed it even before he bought it. Still, on the surface, it was an atypical

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would, one year later, tell the moguls at Sun Valley that somebody should “have shot Orville down.” The reasoning behind the purchase seemed sound, though. NetJets was dominant in its market; it was too late for any serious competitor to catch up. Buffett figured that it was not unlike the newspaper

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business, where there were no red ribbons. Eventually, the competitors would fall away.12 And, indeed, NetJets was outgrowing the competition. Buffett was intrigued with its CEO, Richard Santulli, an entrepreneurial mathematician who had formerly spent his days at Goldman Sachs figuring

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entertained at private events. Buffett met a whole new set of famous people, including Arnold Schwarzenegger and Tiger Woods. Investors cheered Buffett’s purchase of NetJets but were shocked when he almost simultaneously announced that Berkshire was buying General Re, a huge insurance wholesaler, or “reinsurer,” which bought excess risk from

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other insurers. At $22 billion, this deal was almost thirty times larger than NetJets. It dwarfed by multiples his largest deal ever, GEICO.13 When he met with the Gen Re management team, Buffett told them, “I’m strictly

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reenact their childhood photograph (see Photo Insert 1) with expressions appropriate to their feelings at the time. Image 85 Buffett and Arnold Schwarzenegger at a NetJets conference for business leaders in England, September 2002. Image 86 Buffett interviews San Francisco 49ers cheerleaders for flight attendant jobs at another

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NetJets event. Image 87 Buffett concedes defeat to Ariel Hsing, the nine-year-old ping-pong player who trounced him on his birthday, August 30, 2005.

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told him to get the family on the plane. Buffett had to call everyone and organize their departure. A couple of hours later, when the NetJets plane taxied into Boise, Warren called Susie Jr. and said he didn’t feel he could come to the hospital. She told him that he

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’d rather have a lumpy fifteen percent return than a steady ten percent. It didn’t bother him. Most would naturally right themselves over time. NetJets, however, was struggling, not just because of the economy but because the premise for buying it—the uniqueness of its franchise—was looking less unique

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. Other people who forgot to call the Air-aholic hotline kept setting up businesses to compete with NetJets, even though the economics of the fractional aviation business were unattractive. Buffett now realized that it was testosterone that caused Air-aholism. “If only women

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sports franchises. If only women could own sports franchises, they’d sell for one-tenth what they sell for now.” He told the shareholders that NetJets would return to profitability and would dominate its market. He did not point out, however, that it might not earn the margin on capital he

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had hoped, at least not any time soon. It was a letdown, but still a lot better than a money-losing textile mill. Besides, NetJets was fun. He knew mountains of minutiae about how the planes were purchased, managed, scheduled, routed, maintained, insured, piloted, crewed, and even how the pilots

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were trained. NetJets was cool. He did a lot of elephant-bumping at NetJets events. He would never sell it, even if the world’s other mega-billionaires tried to arm-wrestle him for

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on foundation business, seeing Warren and the family at scheduled times. Cole packed and unpacked for her, managed her three homes and staff, juggled the NetJets timetable, made the hotel reservations, scheduled the pedicures, fended off the phone calls, and organized the latest treasures from Susie’s shopping trips. Not only

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an hour rather than a week. Berkshire could do all those things, and more. Many of the companies Berkshire was now buying were businesses like NetJets, built by entrepreneurs who wanted to sell to a buyer who would treat their babies well, and who trusted Berkshire to behave honestly.41 Buffett

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terrible. Buffett flew from the meeting in San Diego to San Francisco the day before Susie’s surgery. He had been scheduled to attend a NetJets marketing event that day and had made up his mind to go, but Susie Jr., who recognized this as a form of denial, told him

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dream, however, of skipping a day of reading the Journal, even on Fridays, the day he drove out to Eppley Airfield for the three-hour NetJets flight to San Francisco. Sharon Osberg picked him up at the airport and took him straight to Susie’s apartment in Pacific Heights. Not wanting

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night she went through a bedtime ritual centered around a song by the singer Bono, who had befriended Susie Jr. after meeting Warren at a NetJets event. Now Susie put on U2’s Rattle and Hum DVD when she was going to bed and fell asleep to “All I Want Is

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You.” “All the promises we break From the cradle to the grave When all I want is you…” At the NetJets event, Bono had initiated his connection to the Buffetts when he told Warren that he just wanted fifteen minutes of his time. “I knew nothing

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real estate listing statistics from Home Services of America (the real-estate company that MidAmerican Energy owned); recited jet-fuel costs and ownership statistics for NetJets; and knew ad lineage from the Buffalo News by heart. Peter’s multimedia event was nothing like the knitting shop; it was harder for Buffett

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in Indiana. “Where’s Howie?” she asked. “In Africa,” said Devon. “He’s landing in about half an hour.” Susie Jr. tried to hurry the NetJets plane that was coming first to Boston to pick her up and then to collect Peter in Omaha before continuing on to Cody.22 By

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: Charles Scribner’s Sons, 1993. 9. Speaking at the 1998 Berkshire Hathaway shareholder meeting. 10. At the time, NetJets marketed itself both as NetJets and by its legal name, Executive Jet, Inc. It was renamed NetJets in 2002. 11. Interviews with sources; Anthony Bianco, “The Warren Buffett You Don’t Know,” BusinessWeek, July

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he could not confirm them. 40. Cerberus memorandum, “For Discussion Purposes,” reprinted in Jim Clayton, First a Dream. 41. In a few instances, such as NetJets, private-company owners sold to him at lower prices than they could have obtained elsewhere because they wanted Berkshire as an owner. 42. Jim Clayton

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National Archives, National Indemnity Corporation, the Nebraska Furniture Mart, the New Bedford Free Public Library, the New Bedford Whaling Museum, the New York Public Library, NetJets Inc., the Omaha Press Club, the Omaha World-Herald, Outstanding Investor Digest, the Rolls-Royce Foundation, Rosehill School, Ruane Cunniff & Goldfarb Co., The Securities and

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant

by W. Chan Kim and Renée A. Mauborgne · 20 Jan 2014 · 287pp · 80,180 words

industry and another. Often, however, the space between alternative industries provides opportunities for value innovation. Consider NetJets, which created the blue ocean of fractional jet ownership. In less than twenty years since its inception, NetJets grew larger than many airlines, with more than five hundred aircraft, operating more than two hundred fifty

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of over seven hundred aircraft, flying to over one hundred seventy countries. Purchased by Berkshire Hathaway in 1998, NetJets is a multibillion-dollar business with the largest private jet fleet in the world. NetJets’ success has been attributed to its flexibility, shortened travel time, hassle-free travel experience, increased reliability, and strategic

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pricing. The reality is that NetJets reconstructed market boundaries to create this blue ocean by looking across alternative industries. The

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most lucrative mass of customers in the aviation industry is corporate travelers. NetJets looked at the existing alternatives and found that when business travelers want to fly, they have two principal choices. On the one hand, a company

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choose one alternative industry over another? By focusing on the key factors that lead corporations to trade across alternatives and eliminating or reducing everything else, NetJets created its blue ocean strategy. Consider this: Why do corporations choose to use commercial airlines for their corporate travel? Surely it’s not because of

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tickets needed per year, lowering variable costs and reducing the possibility of unused aviation travel time that often accompanies the ownership of corporate jets. So NetJets created the concept of selling fractions of jets, which can be as small as one-sixteenth ownership of an aircraft in the United States, entitling

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time, expenses—were factored in, the cost of first-class commercial travel was higher.2 As for NetJets, it avoids the fixed costs that commercial airlines attempt to cover by filling larger and larger aircraft. NetJets’ smaller airplanes, the use of smaller regional airports, and limited staff help to keep costs low

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. To understand the rest of the NetJets formula, consider the flip side: Why do people choose corporate jets over commercial travel? Certainly it is not to pay the multimillion-dollar price to

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allow for point-to-point travel, and to gain the benefit of being more productive and arriving energized, ready to hit the ground running. So NetJets built on these distinctive strengths. Whereas 70 percent of commercial flights go to only thirty airports across the United States

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, NetJets offers access to more than two thousand airports in the US and five thousand airports around the world with convenient locations near business centers and

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a flight from Washington, DC, to Sacramento would take on average 10.5 hours using commercial airlines, it is only 5.2 hours on a NetJets aircraft; from Palm Springs to Cabo San Lucas takes on average 6 hours commercial, and only 2.1 hours via

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time. 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 clients customized in-flight service, such as having your favorite food and

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beverages ready for you when you board. 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

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lower variable cost of first-and business-class commercial airline travel (see figure 3-1). And the competition? 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.3 FIGURE 3-1 * * * The

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strategy canvas of NetJets * * * The biggest telecommunications success in Japan since the 1980s also has its roots in path 1. Here we are speaking of NTT DoCoMo’s i

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pricing model of the industry. By changing the pricing model used—and not the level of the strategic price—companies can often overcome this problem. NetJets, for example, changed the pricing model of jets to time-share to profitably deliver on its strategic price. The New Jersey company follows this model

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Report 2012.” http://www.nada.org/NR/rdonlyres/C1C58F5A-BE0E-4E1A-9B56-1C3025B5B452/0/NADADATA2012Final.pdf. Accessed June 19, 2014. NetJets. 2004. “The Buyers Guide to Fractional Aircraft Ownership.” http://www.netjets.com. Accessed May 8, 2004. New York Post. 1990. “Dave Do Something.” September 7. New York Times. 1906. “‘Motorists Don

Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America

by David Callahan · 9 Aug 2010

the conference about who would get to fly back with them to Silicon Valley. (Facebook founder Mark Zuckerberg was among the lucky who were chosen.) NetJets Europe, the continent’s largest private jet operator, booked no fewer than fifty flights to Davos to handle all of the demand for the conference

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private trips the company operated in Europe in 2006—the equivalent to a plane taking off or landing every eight minutes. When the CEO of NetJets Europe, Mark Booth, was criticized for spewing so much carbon into the air around the Davos event, he scoffed at the naïveté of such attacks

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previously paid much heed to environmental critics. Now they do, in part because those critics include their peers. Thus, Booth went on to explain that NetJets Europe was actually hard at work developing a plan to offset its carbon emissions and that the company was committed to doing the “right thing

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” when it came to climate change. The plan, which was revealed later in September 2007, raised the fees on NetJets’ clients between $4,000 and $5,600 a year to offset the carbon dioxide emissions from their flights. “People want to know we are doing

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the right thing and every month our customers will be reminded of that in their management fee,” Booth explained.4 Two years later, NetJets announced that it was on track to become carbon neutral by 2012. c03.indd 60 5/11/10 6:18:32 AM the eco rich

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’t the first jet charter service to make carbon offsets mandatory for all flights. Cerulean Jet, based in Austin, Texas, beat NetJets by a few months in taking this step when it announced that it would buy carbon offsets for all of its flights. Ken Starnes, the

The Lost Bank: The Story of Washington Mutual-The Biggest Bank Failure in American History

by Kirsten Grind · 11 Jun 2012 · 549pp · 147,112 words

Washington Mutual to shell out a couple hundred thousand dollars each month in plane costs. The cost to the company was not detailed for shareholders. NetJets, the timeshare company WaMu used, described one of the planes, a Cessna Citation X, as “the world’s fastest midsized business jet.” It had a

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. But Tall wanted to return to Seattle and his own doctors. Chapman got on the phone and called Killinger. Could the executives use WaMu’s NetJets account to book a private plane back to Seattle? There was no way Tall could travel on a commercial airline in his fragile condition, Craig

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the offices of Simpson Thacher, trying to find other ways to save the company. The WaMu executives debated for a long time whether to fly NetJets, which was already paid for, or commercial, which would look better publicly. In the end, they decided it was more important to return quickly and

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notice. Rotella and Frank tried to reach Fishman and Casey on the plane, calling their cell phones again and again. Fishman’s executive assistant called NetJets and asked the company to place an emergency call to the pilot, instructing Fishman to call her. He did, and she passed him through to

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Vanasek, 124, 135 Continental Illinois National Bank and Trust Co., 25–26, 301, 318n corporate jets, 44–45, 88–89, 97, 174, 205 See also NetJets Correspondent Division, WaMu, 129–30, 154n, 170 Cost of Funds Index (COFI), 115n Countrywide Financial BoA acquisition of, 187, 222 congressional hearings and, 329 criminal

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, 330 Naroff Economic Advisors, 152 National Association of Realtors, 136, 151, 152, 152n National Australia Bank Limited, 97 negatively amortizing mortgage, 112, 113–14, 138 NetJets, 89, 97, 301, 303 New Century Financial, 71, 152, 166, 176, 329 New York State WaMu acquisitions in, 85 See also Cuomo, Andrew New York

The Quants

by Scott Patterson · 2 Feb 2010 · 374pp · 114,600 words

an online poker hedge fund. Weinstein, more of a blackjack man, was no slouch at the poker table, having won a Maserati in a 2005 NetJets poker tournament. Griffin simply hated to lose to anyone at anything and approached the poker table with the same brainiac killer instinct that infused his

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poker. Jain mentioned that Weinstein was Deutsche Bank’s poker ace. Intrigued, Buffett invited Weinstein to an upcoming poker tournament in Las Vegas run by NetJets, the private-jet company owned by Berkshire. Weinstein made his boss proud, winning the tournament’s grand prize: a spanking new Maserati. Still, gambling was

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the following morning. In 2006, Muller took the PDTers on a ski trip to an exclusive ski resort out west, flying the gang on a NetJets private plane. His treat. It would be one of the last few such trips they would make in years. A credit crisis brewing on Wall

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character from the movie Arthur: “It doesn’t suck.” As his imperial ambitions soared, so did his lifestyle. The firm bought a fractional share in NetJets, giving its partners access to a fleet of private jets at their beck and call. Asness decided the North Street mansion was too constricting and

Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else

by Chrystia Freeland · 11 Oct 2012 · 481pp · 120,693 words

party: “They started saying, if you’re going to buy all this stuff, life starts getting really expensive. If you’re going to do the NetJets thing”—this is a service offering “fractional aircraft ownership” for those who do not wish to buy outright—“and if you’re going to have

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like Africa, how can Western firms compete?” ARISTOCRACY OF IDEAS Just as the railroad created new cities, private jets and private jet time-shares like NetJets have contributed to the globalization of the super-elite—owning homes and doing deals around the world becomes feasible when you can travel the planet

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, Charles, 286 music industry, 109–10, 126–27, 170–71 n-11 economies, 30 Nakamoto, Michiyo, 169 Naspers, 66 Neeleman, David, 156–57 Netherlands, 16 NetJets, 2, 66 New Class, 264–69 New Class, The (Djilas), 89–90 New Deal, 13–14, 132–34, 177 Newsweek, 127 New Yorker, 33 New

Billionaire, Nerd, Savior, King: Bill Gates and His Quest to Shape Our World

by Anupreeta Das · 12 Aug 2024 · 315pp · 115,894 words

by the family at Susie’s house at Lake Okoboji. I have a 6.25% interest in a Falcon 2000 operated by NetJets [another Berkshire company], having been a NetJets customer myself and for my family for about 20 years. And that’s about it.”4 Buffett has since sold the Laguna

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of Historic Places, 47 Neilson, Trevor, 99, 179, 202–203 Nelson, Willie, 154 Nerdle, 107 nerds, 37–38, 50–54 Netflix, 44, 103, 187, 256 NetJets, 117 Netscape, 43, 64, 74 Netscape Navigator, 76–77 New England Journal of Medicine, The, 247 New School for Social Research, 199 Newsweek, 97 Newtown

The Pyramid of Lies: Lex Greensill and the Billion-Dollar Scandal

by Duncan Mavin · 20 Jul 2022 · 345pp · 100,989 words

table magazines aimed at New York’s elite. They were so rich, Greensill insiders joked, that even their dogs had accounts with private airplane company NetJets. Roland had never needed the roles at Morgan Stanley or Citi. Greensill was an opportunity to build something more meaningful. Others had long-standing, personal

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aircraft. Gabe questioned Lex about it, telling him that it could be bad for his reputation, and that he could instead get a membership with NetJets, or some other aircraft-on-demand service. Lex pushed back: ‘Watch me work for a few months, see how much work I do on board

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, ref2 Myners, Paul ref1, ref2 Nacional Financiera (Nafin) ref1 Nagle, Jessica ref1, ref2 National Health Service (NHS) ref1, ref2, ref3, ref4, ref5, ref6 Natixis ref1 NetJets ref1 Network Rail ref1, ref2 Neumann, Adam ref1, ref2, ref3 News Building ref1 Nexia Sydney ref1 NHS see National Health Service NHS Trusts ref1 NMC

The Long History of the Future: Why Tomorrow's Technology Still Isn't Here

by Nicole Kobie · 3 Jul 2024 · 348pp · 119,358 words

approach, starting out life as an electric business jet, or put differently, a flying corporate minibus. Lilium already has a partnership with private jet supplier NetJets for regional flights, so the early eVTOL customers may well be rich dudes getting from Miami airport to their favourite golf course. Wiegand is relaxed

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here, here NASA (National Aeronautics and Space Administration) here, here, here, here, here National Transport Safety Board (NTSB), US here Nature here NerveGear headset here NetJets here neural networks here, here, here, here convolutional here Neuralink here, here, here New Scientist here New York City fires, 1970s here New York Times