Back Page: How Time Flies
Until someone discovers how to create a true H.G. Wells– style time machine, private business jets will have to do. Although the latest bird from Boeing or Bombardier will not transport you to the past or the future, it does enable you to manipulate time and space when you can depart for a far-flung destination in the morning and arrive home in time to sleep in your own bed that night.
Robb Report has its own version of a time machine: this page. Because this issue includes a special section on private aviation, it seems fitting to look back to the October 1989 issue, which featured a comprehensive story on private jet ownership. Gracing the cover was a Beechcraft Starship, which was “among the largest turboprops on the market designed specifically for business use” and sold for $3.88 million, or more than $5.5 million in today’s dollars. Like a certain Jefferson before it, the airplane that became known as a starship soon became outdated and irrelevant. By the early 1990s, business jets had become the standard mode of long-distance corporate transportation.
Meanwhile, fractional jet ownership, the concept that would revolutionize the business jet market and private aviation in general, was still in its nascent stages and received only a passing reference in the article. Five years earlier, Richard Santulli, a former Goldman Sachs executive who was operating his own helicopter leasing business, purchased Executive Jet, an ailing 20-year-old charter and aircraft management company. The name NetJets was trademarked in 1986, and its fractional ownership program was launched in January 1987, when it began offering shares of Cessna Citation S/IIs. Santulli concluded that there would be a demand for private aviation that was not as costly as outright ownership, more convenient than flying commercial, and, for frequent flyers, more financially feasible than chartering. He was correct, although it took people some time to catch on.
“Richard Santulli thought it would be an instant success, but it evolved slowly,” says Kevin Russell, the company’s executive vice president of sales and marketing. The company was chugging along in 1989 and then struggled just to survive through the recession of the early 1990s. Santulli hung tough, and by 1992, things began to turn around. Executive Jet silenced any doubters for good in June 1993, when it placed an order for 20 Hawker 1000s—then the largest-ever order for private business jets.
If Santulli needed any more confirmation that his business plan was ultimately solid, he received it in 1998, when Warren Buffett, once a reluctant jet owner, purchased the company. Today, NetJets (the parent company changed its name from Executive Jets last year) maintains a fleet of nearly 500 aircraft and is waiting to take delivery of 800 more.
Just as aircraft and the fractional market have evolved since 1989, so have the tastes of the people who purchase and own them, says Eric Roth, the president of International Jet Interiors, a Ronkonkoma, N.Y., company that modifies and refurbishes corporate aircraft cabins. “In 1989, most private jet owners were on their first aircraft, or maybe their second,” says Roth, who appeared in the 1989 article. “In 2002, many are on their third, or more. Private jets are not a novelty anymore. They are part of the owners’ businesses and their lifestyles. And they have a more sophisticated understanding of what they want.”
Roth says his clients tend to request cabin interiors that are subtler and more subdued than anything included in the 1989 article—designs that feature “more traditional colors and more sophisticated styling.” Lighter woods such as bird’s-eye maple, which were prevalent in the late 1980s, have been replaced by mahogany and other dark woods. Etched mirrors, once a common decorative item, have vanished. Today, the only mirrors on board are those in the bathrooms. Clients may want to add a touch of glitter to seat belt buckles, light fixtures, cup holders, and other cabin fittings, but they usually select less flashy materials then they did in 1989, when Roth was receiving requests for accents in 24-karat gold. “By today’s standards,” he says, “that would be gaudy.” Well, it may have been late in the decade, but it was still the 1980s.