Executive Jet Orders 12 Additional Falcon 2000 Business Jets
for Fractional Market

Executive Jet Inc. has purchased 12 more Dassault Falcon Jet 2000s to be sold into EJI's NetJets Europe fractional ownership program, EJI chairman Richard Santulli and Dassault Aviation chief Serge Dassault announced last month.

The transaction is valued at close to $250 million by Jean Rosanvallon, president of Dassault Falcon Jet. With EJI's previous purchase of 26 Falcon 2000 aircraft for its U.S.-based NetJets program, the deal brings to 38 the total number of EJI's Falcon 2000 orders.

Initial service entry for the first NetJets Europe Falcon 2000 is slated for the second quarter of 1999. The first of 26 U.S.-based NetJets Falcon 2000s will enter service in January 1999.

One-eighth shares in each $20-million-plus Falcon 2000 in the NetJets Europe program will be sold for $2,687,500, according to Santulli. The NetJets fractional ownership program is more attractive for potential shareholders in larger business aircraft than small ones.

"You can buy one-eighth of a $20-million aircraft for roughly the price of a used Learjet 35," Santulli said. He expects that all NetJets Europe aircraft will be owned by Europeans, but that about 25% of the missions will be flown for NetJets Falcon 2000 fractional owners based in the United States. Each Falcon 2000 shareholder is "guaranteed access" to other NetJets Falcon 2000 aircraft based in other sections of the world, Santulli said.

"Our goal is to connect the world with five or six NetJets programs," he said. Future plans call for creating Falcon 2000 NetJets programs in the Middle East and, eventually, in Asia, after it recovers from its current economic slump.

Similar to the NetJets Falcon 2000s based in the United States, the NetJets Europe Falcon 2000 airplanes will be maintained by Dassault for a fixed hourly fee. Other direct and fixed operating expenses, including management fees, have yet to be determined. At present, 14% to 15% of all Dassault Falcon Jet aircraft are being delivered to the NetJets program, but Rosanvallon expects the number to increase to 20 percent in the future.

Since EJI was purchased in late July by Berkshire Hathaway, controlled by Warren Buffett, Santulli's plans have increased in scope. Santulli says that because Buffett shares his vision for growth, EJI will expand into a global network.

"Warren Buffett is more excited about the program than I am," Santulli said. Further NetJets program announcements are expected before the end of the year.

For example, when asked if he thinks there is a market for supersonic business jets, Santulli replied, "If they're priced correctly, we will sell more SSBJs than any other airplane in our fleet."

Currently, EJI operates 135 NetJets business aircraft and manages another 40. Each aircraft flies 1,100 to 1,200 hours per year, roughly twice the utilization of corporate operators. EJI currently has 284 aircraft on order, with a value of $3.8 billion.

By Fred George