hollywood billionaire

Chapter 219 Private Jets and Fractional Ownership
"There is nothing more important than convenient and worry-free travel and the time saved. For most people, time is a unit that can be anchored by price, fifteen dollars an hour, or eighteen dollars One hour. Enterprises hire them, they work hard, no matter how hardworking they are, there is no way to make a qualitative leap. But for billionaires like you, every second has infinite value, because every second, You all have the opportunity to create endless value for yourself, your business, and this society.”

"Therefore, every bit of your time should not be wasted."

Diana Olek spoke eloquently in a soft tone unique to women.

"In this regard, I believe that there is not much difference between your thoughts and mine. The reason why you choose a private jet is that it provides you with a a freedom, a freedom to be the master of time."

“I don’t need to hear the news of the flight delay at JFK, and I don’t need to board the plane early. I’m sitting in the first row, accepting the strange and hostile eyes of the passengers in the economy class. I keep looking at my watch and praying that the cabin will be seated quickly. The plane is full, take off quickly."

"With a private jet, you can arrive at the general terminal at any time, at any pace you find comfortable, take off immediately without waiting, and arrive on time anywhere in the world. After a few charter flights, you fall in love with total domination The feeling of the sky. 'Why don't I buy my own plane', you say to yourself, 'Having a private jet all to yourself is definitely easier and faster than chartering'."

"But is that really the case? 100 percent, owning a jetliner is really the solution to all travel-related problems?"

"Contrary to most people's beliefs, the answer is - no. Pay-per-view charter flights, although you don't need to worry about any voyage details, private airlines will take care of everything, but the one-way price is relatively expensive. The travel distance between New York and Los Angeles, even if you take the cheapest charter flight, costs 300 to 175 US dollars for a round trip. If you fly more than 1000 hours a year, based on this average price, the annual charter service alone will cost you $3000 to $[-] It costs $[-] million. A midsize jetliner costs between $[-] million and $[-] million."

"Instead of giving cash to a private airline, it is better to add some money, take a loan, and turn it into an asset that you actually control. I believe everyone will calculate this account. But this is the subtlety of completely owning a private jet. Whereas, the purchase cost you can see on the surface is just a part of the 'down payment'. When you actually own it, you will find that there are so many additional costs to pay."

"Like what?" Han Yi asked.

"First of all, you need to ensure that the private jet you buy meets the minimum flight requirements of the Federal Aviation Administration of the United States. Every year, the FAA will require the owner to hire their certified pilots to conduct safety inspections. If you own a Gulfstream G650 like this The annual inspection fee alone is tens of thousands of dollars. In addition, before each flight, the aircraft needs to undergo a safety inspection, and most captains' contracts, 'safety inspection ’ It’s an extra charge, which means you have to pay them extra ‘tips’ every time you fly, on top of their hundreds of thousands of dollars in compensation.”

"And speaking of captains, if you own an aircraft completely yourself, how do you guarantee that you can hire the best captain? And why would the best captain work for a private individual? Think about it, With the same salary, they can obviously come to us, or to any airline with a stable source of customers. As long as there is no problem with themselves, they can work until retirement. If they only fly private jets for a single rich man, then they may at any time because of Job loss for a variety of reasons. The employer’s financial situation is in trouble, the employer’s usual residence has changed, or… the simplest reason is that the captain is no longer in favor.”

"The starting salary for newcomers we recruit starts at $6.6. The annual salary of senior captains is around $21.7. I assure you that if you want to find a pilot on the same level as our senior captains in the market As a member, the remuneration that needs to be paid is definitely more than 1.5 times this figure."

"Besides, if there is only one captain, you have to consider an important issue. That is, what should you do if the captain goes on vacation or gets sick and you need to travel again?" Mark Weisser spread his hands and added said, "To take it a little further, if the captain is incapacitated for any period of time while working for you, for whatever reason. He doesn't have a permanent disability, but does have... let's call it a random number, You can’t work for half a year. In this case, you can’t just fire him and let him go, because there are usually strict restrictions on this in the employment contract, but you can’t fire him for an absent captain. Throw away all your travel plans, and let the jetliners you bought for tens of millions sit in the warehouse to eat ashes."

"What should we do at that time? Hire another captain? Raise two people at the same time?"

"That will indeed be quite a headache." Han Yi nodded slightly and responded.

"Yeah, and that's just a fraction of the trouble that one of the private jet employees can cause you. And the cabin service team, if you're hiring full time, it's going to cost you at least another $20 a year The storage fee for renting a hangar at the airport is 1 US dollars per month. The annual maintenance and repair costs are between 50 and 100 million US dollars. There are also aircraft damage insurance, passenger accident compensation insurance, and crew insurance... In this world, there are many high-end goods and services that billionaires can enjoy, but there are only two, and when you consume them, they will consume you in turn.”

"Yachts, and private jets." Mark Weisser crossed his fingers with a serious expression.

“And it’s not like you want to spend tens of millions of dollars and pay a few million extra every year you use it to get the airplane you want. OEMs, original equipment manufacturers, are what we call Speaking of Gulfstream, Bombardier, Cessna or Boeing, their waiting lists are so long that even the most peaceful people will lose patience. Take the G650 as an example, orders for this business jet have been backlogged for three years, and many are on the waiting list of buyers are selling the aircraft for a profit before they even take delivery. Yeah, that’s how crazy this segment is.”

"On the other hand, it's not easy to find good quality second-hand aircraft." Diana Olek sighed, as if she had really had enough of the chaos in the private jet trading market. "They are very scarce. Plus Given the current shortage of good pilots and spare parts, it is difficult to buy an old airliner that is not in such good condition and come back for refurbishment.”

“Take a step back and let’s make an incredibly bold assumption that you’ve done everything you can to overcome all of the hurdles we’ve mentioned above to finally start using your private jet, which means you can Going anywhere at any time? The answer, unfortunately, is also 'no'. First of all - maintenance time."

"Airplanes are usually grounded for at least a week every year for scheduled maintenance." Mark Weisser took over the conversation, and the two sang together, and the cooperation became more and more smooth, "In addition, most aircraft usually undergo a comprehensive inspection every few years. , which could result in weeks or even two or three months of downtime."

"Moreover, every type of airliner has FBOs that they can't reach... The term in the industry, fixed base operator, is what ordinary people call airports. Even the G650, or the Global 7500, can't go to places. For example Speaking of the airport in Aspen, a ski resort, the wingspan of the G650 is too long to land here, causing many wealthy people living in Aspen to give up their plans to travel by Gulfstream. In other words, in this world, No one aircraft is right for every situation. And if you choose to buy an aircraft out of pocket, then ... there are places in the world that you can't physically go to."

"I don't think any billionaire aspiring to reach the stars would allow this to happen."

"So, your subtext is that if I choose to do... a shared ownership project with NetJets, you can solve this problem?" Han Yi thought for a moment and continued to ask, "Even if we share ownership, isn't it just... Targeting a certain aircraft?”

"That's where NetJets excels."

Seeing that their introductory introduction finally had an effect, Han Yi took the initiative to ask the questions they wanted him to ask, and the expressions of Mark Weiser and Diana Olek both relaxed a little bit in unison.This is the sales strategy that NetJets has always adhered to, and it is also the core marketing method of all successful brands in the world - to allow customers to actively discover their needs and actively seek solutions to them.

Once this kind of psychology occurs, the possibility of closing orders will naturally be greatly improved.

“With more than 900 jetliners, we have the largest and most diverse private fleet in the world. By becoming our partner, you will not only be able to fly on the aircraft you purchase, but also have unlimited access to smaller models. Airplanes. Of course, upon request and for an additional fee, you can upgrade to a larger airliner with more seats or a longer range.”

"Free downgrade, paid upgrade?" Han Yi frowned and summed it up quite succinctly.

"Yes, for example. Let's say you... buy part ownership of a Bombardier Challenger 350, even though you can always switch to another jetliner of the same class if you want, Cessna's Citation Longitude .Or smaller 6-8 seat passenger planes, such as Citation XLS, Citation Latitude, Embraer’s Praetor 500, Phenom 300, etc. Pay an upgrade fee, and you can also upgrade the aircraft type for the current itinerary to the Challenger 650, and even the Global 5500, 6000 and 7500."

"What does this mean? It means that not only do you own part ownership of one aircraft, but you also get access to all the aircraft in the NetJets family. One investment, unlocking 900 private jets, there is no better deal than this .”

"At the same time, we also take care of all the problems you just mentioned about private jets. You no longer need to worry about crew recruitment, management, and sick leave, no matter when you depart, NetJets will match you with the most experienced captain and the most energetic cabin crew. At any time and any place, you have more than 7500 global aviation experts working on your private jet in their respective fields of expertise.”

"In my department, Mr. Han, there are nearly 300 members of the owner service team to plan, coordinate and confirm every link of your flight. They are at your service 7 hours a day, 24 days a week, including weekends and holidays. You only need to make an appointment four to six hours in advance, and you can start the journey. We provide ground transfers and cabin meals for free. Even the wine served on the plane is from the top winery in Tennessee, Blackberry Farm Handpicked by experienced sommeliers.”

"In addition, we have more than 30 service points in more than [-] countries around the world. Whether it is Barcelona, ​​Nice, or Saint-Tropez, as long as you arrive in the local area and have any reception needs, we will handle it for you— —of course, there will certainly be no charge.”

"Finally, although I know you definitely don't need it, I still have to introduce our financing service to you."

Mark Weisser's wording is quite tactful and cautious. He doesn't know how much cash is in the bank account of the rich Chinese man in front of him, and how much liquidity he has converted into assets that are difficult to realize in a short time. However, he has been in the business for more than ten years. Judging by my experience, being able to afford tens of millions of dollars in real estate is a level of wealth, but being willing to spend tens of millions of dollars to buy a private jet is another completely different realm.

The vast majority of NetJets shared ownership customers, no matter how nice they say and how big they are, they still have to finance through various mortgages and credit, try to keep cash in their hands as much as possible, and use other people's money to buy Fractional ownership of a private jet.

"NetJets has a subsidiary dedicated to providing direct financing to customers, NetJets Direct Financing, operated with a grant from Berkshire Hathaway, to provide prospective owners with a simple but comprehensive way to purchase NetJets shared ownership options. In fact, we are, to date, the first and only airline operator in the private aviation industry to offer credit sales financing to our clients. Building on nearly 60 years of unparalleled experience, and Berkshire Hasa With Wei's rock-solid financial stability, we can significantly reduce the cash outlay required to acquire a private jet for you."

"In a nutshell, credit financing for aircraft is..."

"Thank you, Mark, Diana, your introductions really opened my eyes."

Han Yi pretended not to hear Mark Weiser's last words.Out of politeness, and in order to give myself more time to read the information in front of me, so as to make an accurate judgment on the fundamental nature of the NetJets project, Han Yi has been listening patiently to Mark and Diana just now. A sales pitch that took years to finally take shape.

Now, after sorting out all the information in his mind, Han Yi, who has a general grasp of the NetJets business model, is ready to regain the initiative in the conversation and use sharp questions to find out the truth.

"If you don't mind, before we go any further, I have some questions about the introductory information you provided, and I hope you can answer them for me."

"Of course, Mr. Han." Diana Olek opened her arms slightly, with an open and friendly attitude, "We are here today to clarify your doubts."

"That's great."

Han Yi smiled, held the coated paper brochure in his hands, and read the contents.

"It says that for a fractional ownership aircraft contract, the purchase cost is a one-time investment based on the share of ownership purchased and the type of aircraft itself. Is that correct?"

"That's right, the price of each type of aircraft is different, and we also have differentiated pricing according to the size of the share you want to buy. The more shares you buy at one time, the lower the average price."

"Is the size of the share purchased related to the length of time I can use the aircraft every year?"

"Yes." Mark hesitated for a moment, then replied slowly, "The more shares you buy, the longer you can use the aircraft every year."

"It sounds fair." Han Yi smiled at him, "I also noticed that in addition to the one-time purchase cost, the 'owner' with partial ownership also has to pay a monthly management fee."

"The monthly management fee is fixed, and we will confirm the amount with you when we sign the contract, and it will not change, because it includes the indirect operating costs of the aircraft, such as the pilot's salary, training, aircraft insurance, Your insurance, the insurance of other passengers, and the cost of renting the hangar.” In the second half of the sentence, Mark Weiser emphasized the tone, “However, it should be noted that you do not need to pay 100% of the cost ..."

"It's calculated according to the share, right?" Han Yi shook his right hand back and forth, "If you buy half of the share, you will pay half of the fee."

"Yes."

"It's very cheap, in this case." Han Yi's smile grew stronger.

"Considering the owner at all times is our first principle of service." Diana Olek responded softly.

"What's the fee for the next one? Occupation hourly fee, OHF."

"This is the direct cost of using the aircraft, including some fuel consumption, maintenance fees, landing fees, cleaning fees and meals."

"I thought meals were free?"

"The meals and drinks provided are free." Diana replied with a normal expression, "but the labor costs and material costs for preparing the meals do need to be paid by the owner. However, you should have noticed that you You only need to pay part of the fuel cost, because before the aircraft is handed over to you for use, we will not clear the previous fuel scale, but still calculate according to the scale used last time. You only need to pay for this flight The actual fuel consumption is sufficient.”

"Understood... I don't think there is a clear price for fuel costs?"

“The exact amount of fuel a flight consumes will vary slightly based on a variety of factors,” explains Mark Weisser, “including weather, runway conditions and aircraft performance. So we use a sliding fuel rate for each flight. Depends on the type of aircraft you have and what NetJets' fuel purchases cost last month."

"Will the float be large?"

"No, the average price of jet fuel this year is $1.25 per gallon, which is 28 cents cheaper than last year. In fact, in recent years, the price of jet fuel has been very friendly to aircraft owners. The average price from 2011 to 2014 was At $2.92 a gallon, you do the math, that’s more than half the price.”

"Then I have to hurry up and go to more places." Han Yi winked at Mark and joked.

"Own your own plane early and enjoy the wonderful vacation life early." Mark clapped his hands and laughed a few times.

"Oh, yes, and this one, is the plane transfer free?"

"Yes, our transfer fee is the lowest in the industry - because it is completely zero! We just shared with you the size of our fleet. Because of its large scale, we will not charge any transfer fee. As long as it is in our Within the centralized service area - that is, the 48 states in the continental United States and some designated cities in Canada, NetJets owners can enjoy purely free transfer services."

"Wow." Han Yi rubbed the back of his head and laughed in surprise, "I'm starting to wonder if you guys still have any profits."

"For us, profit is never the most important thing." Seeing Han Yi taking the bait bit by bit, Mark Weiser's expression became more and more comfortable, "The real meaning of shared ownership is NetJets, and You, together own an aircraft. It is our shared treasure, and nothing else matters more than making it the perfect travel experience for you.”

"Fabulous." Han Yi raised his eyebrows, breathed a sigh of relief, and sighed, "Do you know, Mark and Diana, what impresses me the most is your attention to customer privacy."

"I feel the same way as you, Mr. Han." The creases at the corners of Diana's eyes were almost as big as her squinted eyes. "Before I came to NetJets, I worked at Ritz-Carlton for 12 years. I can be very confident Let me tell you honestly, our protection of customer privacy is several levels higher than that of Ritz-Carlton. In order to protect the anonymity of important guests, the owner will never be associated with a specific tail number, and has exclusive access to our Access to private boarding lounges. All passenger data is kept strictly confidential by the top cybersecurity team.”

"How do you do it without being associated with a specific tail number?" Han Yi asked.

"Each aircraft is registered in the name of NetJets, so naturally the owner of the aircraft cannot be traced."

"I can't find any faults in all aspects." Han Yi shrugged, "You guys... must have been inundated with orders from all over the world."

"It's not an exaggeration to say that you are drowning, Mr. Han." Mark straightened his tie and went after the victory. "We will not disclose the private information of any customer, but I can share with you the public data. As of March this year, we have a total of There are 3 partial ownership aircraft owners and flight card holders enjoying NetJets’ ultimate service.”

"Oh, 7000."

Hooked.

Han Yi took a sip of iced coke, and suppressed all the smiles that burst out.

Under normal and vigilant circumstances, Mark Weisser and Diana Olek would never disclose such data, so Han Yi must act as if he is ready to sign with NetJets in the next second. It is possible to elicit this most critical customer-to-fleet size ratio.

"That is to say, on average, each aircraft is used by eight customers. According to the average annual flight time given by you, one aircraft is 7500 hours, and each person has 7200 hours. If I follow the eight One-tenth of the ratio, to buy a Global 900, one-eighth of 900 million US dollars, is 9000 million US dollars. [-] million US dollars, I can only fly [-] hours a year, converted to each hour, ten years The usage cost is US$[-] per hour. And this does not include the so-called direct operating costs and indirect operating costs.”

"You just said, what is the price of a round-trip charter flight from New York to Los Angeles? Six to seventy thousand dollars? Based on the 5800-hour round-trip flight, the cost is 155 dollars per hour, right? Even if I extend the number of years to ten In [-], the cost of using your service is still [-]% more expensive than direct charter flights.”

"It's like this, Mr. Han, the biggest difference between partial ownership and direct charter is that you can actually own a share of an aircraft instead of just paying for a flight..."

"What's the use to me of owning shares?" Han Yi shook his head and asked, "The aircraft is registered under the name of NetJets. I have no way to dispose of the assets of the entire aircraft. I just have some shares. What can I use it for? Go to the bank, or ask you for mortgage credit? Or, resell the shares to other buyers?"

"You can sell to other buyers, there is no doubt about it." Mark Weisser's expression began to become solemn, and he realized that Han Yi was not as young and energetic as he appeared, and he was not as easy to be deceived. , will make impulsive consumption, "At the same time, we also provide share redemption services."

"Share redemption?"

"Your investment has a minimum freezing period of 36 months. After 36 months, you can submit a redemption application to NetJets, and we are willing to repurchase the shares in full at the price you paid at that time."

"In other words, I am equivalent to providing a three-year loan with zero interest for your aircraft." Han Yi laughed dumbly. "Moreover, I also need to share the cost of use during this period. It is equivalent to both my We provide you with the funds to buy the aircraft and pay for the maintenance.”

"You have to... think about it this way." Diana chimed in, "The value of the aircraft itself will depreciate. As the aircraft ages, its market price will decline. Most of the contracts of private airlines are It is stipulated that share redemption is determined according to the assessed price at that time, so no matter if you go to any other company, after the contract expires, there is a high probability that you will lose some money. But here at NetJets, precisely because we have strong Therefore, we are willing to repurchase the aircraft in full at the actual transaction price three years ago, which is actually very valuable.”

"Furthermore, our customers, generally very few... rarely buy the ownership of Global 7500 aircraft." Mark Weisser thought for a while and added, "If you choose a smaller aircraft, then use our financing Service, the initial investment is only 30 to 60 US dollars, if you think about it, 30 US dollars, you can have..."

"But the so-called down payment is not what I care about, Mark."

Han Yi stretched out his hand, interrupted Mark Weiser, and said slowly with an unusually serious expression.

"I know what the general user profile of these private jet customers is like. They may already have seven or eight figure deposits in the bank, and ordinary first-class commercial flights can no longer satisfy their pursuit of top material life. So , they turned to private jets. It's not cost-effective to charter every time, and the process is cumbersome, plus, as you say, they don't actually own, or in name, an asset. So, the fractional ownership you offer Service, right in their arms."

"You don't need to spend a lot of money to announce that you bought a private jet. Even if it's just a part of the plane, it's completely real, isn't it? Give a down payment that's less than a Manhattan apartment. Money, you can have... Just take the right to use a Cessna, and all the valued owner services of NetJets. Don't get me wrong, your service is really meticulous and excellent, and the [-] customers you now have Definitely not fools. For their income level and travel needs, fractional ownership is enough.”

"This project is the cornerstone of your business model. It is precisely because of the fact that ultra-high-net-worth individuals need to show their strengths to the outside world, and they need to show strengths beyond their own real level, in order to make more senior contacts and richer resources. Continue on the ladder Climbing psychology, you will become the global hegemony in the private aviation industry."

"I have to applaud NetJets, Berkshire Hathaway, and Mr. Warren Buffett for his powerful business acumen."

"But, you see... personally, it doesn't really apply to your personas."

"When I say I want to buy a private jet, I mean it. I want outright 100% ownership of a precision aviation instrument. Owning costs, operating costs, maintenance costs, operating costs, you name it I don't even care about the extra expenses I have to pay after buying it."

"All I care about is the fact that I own it completely."

"So, my appeal is very simple. If you want me as a customer, there is only one cooperation model - help me acquire a private jet with full capital, and then I will hand over all the management and operation processes to NetJets deal with."

"I know that such a service is not in your profile..."

Having said that, Han Yi turned the brochure upside down and put it on the table.

"But I believe there are exceptions to everything."

"There are indeed exceptions to everything, Mr. Han."

Mark Weisser and Diana Olek exchanged a look, licked their lips, the previous joy, and the serious expression of these few minutes disappeared completely, replaced by a formulaic mechanical smile.

"However, the company has a company policy. Except for a few important customers recognized by the parent company, we currently only open the three projects of partial ownership, leasing and flight cards."

"If you want, we can work together on the project of fractional ownership first. When the first period of the contract is over, we will apply to Omaha to see if we can buy you a private jet that is completely yours through NetJets. "

"It's too long." Han Yi bluntly refused, "I value timeliness, and I need assets that can be acquired now, Mark."

"This one……"

Mark Weisser touched his nose looking extremely embarrassed.

"I may not be able to give you an answer today... If possible, please allow me and Diana to go back to the office, have a meeting with the headquarters to coordinate, and then give you a specific answer, okay?"

"No problem at all."

"Then, let's rush back to schedule a meeting now and try to give you an updated situation report within a week or two."

Mark Weisser and Diana Olek stood up one after another and said goodbye to Han Yi neatly.

"You can take as long as you need."

"Thank you, Mr. Han. Thank you for your love and support for NetJets, and thank you for inviting us to be our guest today."

"Don't be so polite, Mark, Diana, I look forward to your good news!"

"Goodbye, have a nice day!"

"Goodbye."

Seeing the faces of Mark and Diana disappear at the other end of the elevator car, Han Yi turned around and looked at the property manager Corey McIntosh who was standing by the side with a perfect smile.

"What do you think, Corey?"

"You should have the same premonition as I do, Mr. Han." Corey bowed and said leisurely, "The two of them have already made a decision just now."

"Oh, really?" Han Yi took some time to straighten his cuffs, "What decision?"

"A company is a company and a business is a business."

Corey said this in an unintelligible way, and took out his cell phone from the inside pocket of his suit.

"In another... at most half a minute, I should be able to receive a text message from Mark."

"Half a minute, so confident?"

"Well, Mr. Han, half a minute is just a rhetorical rhetoric...well, it doesn't look like half a minute."

Corey snorted through his nostrils and looked at the screen where a new iMessage popped up.

"21 seconds."

"what did he say?"

"He says……"

Corey unlocked the screen and faithfully repeated the very simple message.

"Jet Linx, Chris Curtin, 516-554-6431."

(End of this chapter)