From Wired Magazine June 2001


Hey, You're Worth It (Even Now)

But can you afford it? NetJets runs the ultimate on-the-fly network on the premise that time is still the most valuable asset of all.

By Warren Berger

It's almost 7 am and I'm only just now hauling my behind-schedule ass out of the car. I'm supposed to be at an 8:30 meeting in Columbus, Ohio, and I'm somewhere in the bowels of central New Jersey. I'm screwed, right?

Not today. Today I travel at warp speed. I do not mess with Newark Airport traffic, nor do I get stuck on a godforsaken LaGuardia runway. This morning (and, sigh, this morning only), I'm a member of the NetJets set. Outta my way! There's my plane. And I do mean mine. On a runway at New Jersey's tiny Teterboro Airport, a sleek Cessna Citation VII jet is waiting just for me. It's one of about two dozen jets on the tarmac, a flat field of concrete that looks like your average mall parking lot - except that it holds $30 million Gulfstream jets instead of Hondas and Subarus.

Teterboro is the busiest private airport in the country right now, largely because it's the northeastern hub for the NetJets fractional jet ownership program. But as I pass through the small NetJets terminal building in the middle of the airfield, the place is almost deserted - all I see are my three co-passengers and my pilot, Trent. He greets me with a wide grin and a firm handshake. He's got weather updates and flight time info for me - hell, he's even ready to carry my bag if need be. Trent is more than a pilot; he's my personal valet. He leads me on a short stroll across the tarmac to my plane, and as I glance to my right I see something that confirms I really am in a rarefied galaxy of the air travel universe: A limousine is coasting along the runway, headed straight toward a waiting jet. The car pulls right up to the steps of the plane, and as its door opens, the limo passenger is greeted by his own valet/pilot and practically carried into the aircraft. Now I know why the terminal was deserted: Who needs one?

Inside the Citation, I'm escorted to a soft leather seat that swivels, with a shiny mahogany table that pulls down. Trent gives me personalized safety instructions (which are a lot more compelling coming from the guy who has your fate in his hands), then disappears into the cockpit. Within a few minutes, we're soaring higher than the big commercial planes, way above the clouds - when you're in a private jet, you can take the high road. At somewhere around 41,000 feet, we pick up some serious tailwinds, which push us close to 600 miles an hour. I've barely had time to finish my croissant and my freshly sliced kiwi when I feel the plane descending into Columbus, where it's snowing like mad. But that doesn't slow us down. The Citation lands easily and pulls right up to the building where my meeting is. I vault out of my seat, jog down the steps - "Nice landing, Trent" - and stroll into my meeting at 8:30 sharp. No problem.


Well, actually, there is one problem: If I ever want to experience this master-of-the-skies rush again (and after just one flight, I feel the first stages of addiction in my blood), I'm going to have to come up with $685,000 and fork it over to a guy from Brooklyn named Richie.

Such is the cost of admission to the NetJets lifestyle, as proffered by Richard Santulli's high-flying company, Executive Jet, which pioneered and now dominates the surging industry of fractional jet ownership. That $685,000 buys a one-sixteenth share in a Citation VII, guaranteed access to 50 flight hours for one year. I would prefer a 100-hour one-eighth share, but that would set me back $1.37 million, not counting a management fee that varies according to type of plane and fraction of ownership - in this case, about $11,000 a month. On top of that, you've got the hourly rate ($1,700) that kicks in from the time the plane leaves the ground until it touches down again. Of course, if you really want to get into some heady numbers, there's the quarter share of a Gulfstream V jet - $10 million down, plus $50,000 a month and $3,000 for each hour you're up.

What do you get for all that? You get some pampering, to be sure; NetJets will make sure your favorite food or drink is on the plane (client Tiger Woods always wants Big Macs) and have a limo waiting when you land. You also get something whose value is rapidly appreciating in these belt-tightening days: virtually guilt-free prestige. Owning a share of Warren Buffett's airline (he acquired the operation three years ago) is a statement of success without excess. Most important, you get time - or rather, you get back all those hours lost in the dreaded airline hub-and-spoke system that produced 450,000 delays last year. Paying for first class can't save you from that deteriorating hell. The only true escape is customized jet travel, which sails above the commercial chaos and glides in for smooth landings at hundreds of small, uncrowded airfields.

Perhaps the best thing about a NetJets membership, though, is what happens when you're not using the jet. You don't have to store it, maintain it, keep the pilot hanging around somewhere. "When you're done with the plane," one NetJets owner purrs, "it just disappears."

As a share owner, you are technically part-owner of a plane, and can claim depreciation on your taxes if you use it for business. But in reality what you own is membership in a club that allows you to play musical planes. You can trade your Gulfstream hours for time on a Hawker or a Citation. This is more than just a perk: Some airfield strips can't accommodate bigger planes like the Gulfstream. You can also trade your US flying hours for time in the NetJets European system, and take trips that are the hyper-definition of jet-setting. Recently, Santulli used NetJets to go to a Tuesday lunch meeting in London, followed by dinner in Paris; on Wednesday he had breakfast in Cologne and dinner in Frankfurt; and on Thursday he lunched in Geneva and dined in Milan. "You could never do that commercially," he says. And since the plane taxis up to the customs office, it's as if you've got a personal agent at each stop as part of the bargain.

One more thing about jet-sharing: It can make you feel even richer than owning. You can collect planes - or at least pieces of them - outright. Vin Gupta, who runs the database company InfoUSA, has purchased a one-eighth share on three different NetJets planes. This means Gupta has spent less than the amount he'd have to shell out for a single plane, yet can indulge his flying whims. He can fly in a sleek, bullet-like Citation X when he wants to travel at three-quarters the speed of sound, a Gulfstream when he's living large, and a midsize Hawker at any time in between.

One thing's certain: Whichever plane Gupta picks, and at whatever speed, he's burning some serious cash. If you figure in all the expenses and average them out over six years, it can cost upward of $7,000 an hour to fly NetJets. So even if that speedy Citation X gets you from the East Coast to California and back in eight hours, the meter will top off at more than $50,000. These tabs can make your head spin if you're not part of the club. "I don't even try to explain the numbers anymore," says a Houston investment banker who has shares on three jets. "People look at the hourly breakdown and say, 'How can you justify spending that?'"

For some NetJets owners, justification is not an issue. They've earned the good life. "Whenever a CEO retires," Santulli says, "the first call they make is to us." Others just don't have time to feel guilty: harried entrepreneurs (flying more than ever right now in search of dwindling investment capital), globe-trotting consultants, and tech design teams in a hurry. Technology execs have been the fastest-growing category of NetJets customers in the past couple of years. Another hot group is the financial community. Yes, these guys can afford their own planes, but as one Wall Street partner told me, to be able to pick up the phone and have your jet just show up for you, no headaches - well, "that's a nice piece of cake." Fractional ownership has also caught on with media players (Don Imus, for example) and professional athletes (along with Tiger, there's Pete Sampras and Andre Agassi).

What will $10 million get you? For starters, 200 hours on a Gulfstream V. You'll get back all the time lost to the airlines. And when you're done with the plane, it just disappears.

But the decadence is starting to trickle down. "Flying in private jets is being driven by the desperation of businesspeople who can't be productive enough in the airline system," says Michael Dyment, an aviation consultant with Andersen. "You're now seeing people at all levels of business on these jets." To hear some tell it, Santulli has brought private planes to the people. "He's like the Gates or Jobs of the airplane business," pants Kevin Russell, Santulli's worshipful marketing director. That may be overstating it. Perhaps a more realistic assessment comes from an industry observer who says, "Sure, he's opened up jet travel - from the fabulously wealthy to the extremely wealthy."

No one disputes that Santulli's time-share program has been the piston driving the explosive growth of the private jet business in the past few years. Until recently, the jet category was "a quiet little backwater of the aviation industry," says Richard Aboulafia, an analyst with the Teal Group. "It was a hobby for old rich guys - who cared? Now the total market has gone from $3 billion to $10 billion, in no time. That's the kind of growth you expect to see in silicon chips and cell phones, not in aviation."

Exactly how much of that growth is going into Santulli and Buffett's pockets is unclear. Five years ago, NetJets' revenues were a paltry $100 million; two years ago the company passed the $1 billion mark. Now all Santulli will say is, "We're a multibillion-dollar company." NetJets has a 50 percent market share in its industry.

It may be just getting started: Honeywell Industries projects that the fractional jet business will triple in size in the next three years. Of course, that's assuming it won't be devoured by the bear market. Santulli's been here before: The recession in the early '90s almost killed his business before it got off the ground.


Richard Santulli's kingdom is Teterboro and his throne is on a Gulfstream jet. The NetJets time-share program represents close to 90 percent of Executive Jet's business (the rest is a charter service). The guts of the operation are at mission control in Columbus, and there's an executive office in Woodbridge, New Jersey, but Santulli does some of his best work out on the tarmac at Teterboro, where he tends to take his meetings. It's where he sold Warren Buffett on the whole concept of NetJets - Buffett says it took 15 minutes; Santulli says it wasn't even that long. Right now, Santulli is waiting on the Gulfstream to receive me, his legs stretched out, a pilot hovering at his elbow. At 56, Santulli cuts an elegant figure, with a designer suit, coiffed hair, chiseled features, and an even tan. He looks like a guy who mingles with the rich and famous and owns a stableful of thoroughbred racehorses, both of which he does. Some believe he's Buffett's heir apparent at Berkshire Hathaway.

But in some ways, Santulli is the last guy you'd expect to see sitting in this particular catbird seat; he's an enigma, which is one of the things Buffett seems to like about him. ("Such an interesting guy," Buffett says to me at one point.) For example, Santulli is not a plane nut; he never even set foot on a plane until his honeymoon, at age 21. Why not? "I grew up in Brooklyn," he explains. Enough said. Richie played stickball and had a head for numbers. His dad worked three jobs, and the family arrangement in Bensonhurst was like something out of Everybody Loves Raymond : His father's parents lived on one side of the street, his mother's parents on the other. The Brooklyn accent and street smarts are still with Santulli - and that, too, seems a little out of place here in Gulfstream heaven. But the real kicker, the thing that should have guaranteed him a lifetime of flying in coach, is that in his first career he was a math teacher - he is the former Professor Santulli of Brooklyn Polytechnic Institute.

How did a numbers nerd from the outer boroughs end up in such rarefied air? By solving a puzzle that had stumped the rich geniuses in Connecticut for years: How do you fly private without "barbarians at the gate" excess? How do you justify having a plane sitting idle most of the time, and a pilot on your payroll who's twiddling his thumbs? Richie the math whiz from Brooklyn knew the answer: Simple division, you jerks!

Actually, it wasn't so simple, which is why Santulli was the first to crack the fractional code. He took up the challenge almost by accident. In 1967, after two years at Polytechnic, he was lured into the private sector by Shell Oil. He moved on to Goldman Sachs, which was looking to start its own quantitative analysis group. Santulli went there to develop a computer program for the leasing department. But because no one except him knew how to crunch the numbers, pretty soon Santulli was running the whole department, selling and closing the big contracts himself - which often involved the financing of airplanes. He became a young star at Goldman (Goldman partner Peter Sacerdote remembers him as "computer-mind smart") and was pegged for a partnership.

And then, suddenly, he announced he was leaving. "We were devastated," says Sacerdote. "Nobody does that at Goldman in their partner year." Indeed, Santulli left precisely because he was about to become a partner. "That would have been it - once you're a partner, you never leave," he says. "I was already making more money than I'd ever dreamed of. But the whole time I was running the leasing department, I wondered: 'Am I successful because of me, or because of the Goldman name?' I wanted to take a shot and see if I could do it on my own." Sacerdote recalls that when Goldman chief John Whitehead learned of Santulli's plan, he told his partners, "If he does start something, make sure we invest in it."


Santulli started his own leasing company, specializing in aircraft deals. And then he stumbled upon an old, struggling company called Executive Jet Aviation, which had a fascinating history. In the early 1960s, retired Air Force general Dick Lassiter told actor Jimmy Stewart (whom he'd gotten to know during a stint as a technical adviser on war movies) about his plan to launch a private jet charter service for powerful business executives and celebrities. Stewart agreed to kick in money, as did TV star Arthur Godfrey. Another well-known military man, General Paul Tibbetts (captain of the Enola Gay) got involved, too. This crew launched Executive Jet in centrally located Columbus in 1964, and promptly bought the first Learjets that rolled off production lines. Executive Jet became the pioneer of private jet chartering, known for its fast planes and attractive stewardesses (Lassiter was said to have had a taste for both). But the business went through management shake-ups and was hit hard by the oil crisis of the mid-'70s. By the time Santulli discovered it in 1984, Executive Jet was on its last legs. At first, he thought it would be a nice side business for his leasing operation, a place to dump planes coming off lease programs.

Around this time, Santulli started to think about buying his own plane. Naturally, he crunched the numbers. And they didn't add up. "In terms of the amount of time I fly, it made no sense to own a plane," he says. "But when I divided the numbers by four, it started to make sense." So Santulli asked three Wall Street buddies to go in on a plane with him. Immediately, "we were squabbling about who would have it, on which days. And the whole point of having a plane is to have it whenever you need it." At that moment, Santulli understood why there was no fractional jet market.

He decided to approach the fractional share conundrum mathematically. "If I could figure out a way to share the cost and solve the problem of guaranteed availability," he says, "I knew I'd have something big."

Santulli gathered up all of Executive Jet's charter flight records - geographical patterns, seasons and times of day people tended to fly, frequency of mechanical breakdowns - and constructed a mathematical model. But he had to find the x factor. If he sold a certain number of shared planes to customers, how many extra planes would he have to own in order to cover all the overlaps in customer demand? After two days of doing equations, he arrived at the solution: For every 20 planes he sold to customers, he would need 5 1/4 extra planes of his own to bridge the gaps. This would allow him to guarantee 98 percent availability. If he tried for 100 percent guaranteed availability, the x factor shot way up, wiping out potential profit. Santulli's plan was to use charter services to cover his 2 percent gap.

In 1986, Executive Jet was reborn as primarily a fractional jet program, called NetJets. Santulli took money from investors, added in some of his own, and bought eight jets from Cessna. "They probably thought I was nuts," says Santulli, "but I was writing them a check, so what did they care?"

Over the past five years, Santulli has grabbed 40 percent of the world's business planes right off production lines, reaping the considerable savings of buying in bulk. Today, the NetJets fleet numbers more than 330 jets.

In the early days, however, the marketplace did not immediately embrace Santulli or his concept. He started out like a desperate Amway salesman, hitting up the people he knew, and he managed to sell a few shares to his pals in the financial industry. He began to gather momentum in the late 1980s, and then came the recession. "It was a disaster," he recalls. Santulli sold exactly one-eighth of a jet share in '90. He had purchased the airplanes, hired the pilots, and begun to set up a huge flight-network infrastructure in Columbus. He was losing more than a million dollars a month.

But he gutted it out, and began to prosper in 1992, when the market heated up. "The recession seemed to change the way people thought about owning planes," he says. A lot of owners had gotten burned when they tried to sell off jets in the down market. Now they were flush again and wanted to get back in the air - but with less financial risk. On the strength of hundreds of shares sold in the mid-'90s, Santulli began placing head-turning orders with jet manufacturers. The Teal Group's Aboulafia notes that plane companies "were used to selling a plane here and a plane there. And here's this guy who wants to order 20 or 30 at a time. They gave him good deals - why wouldn't they?"

"Is the service worth the money to people?" says Buffett. "The answer in my book is yes - and the proof is, nobody that tries it ever quits."

He stepped up his line from little Citations to the larger Hawker 1000s, snapping up 25 of them at $12 million a pop. He followed that with a big Gulfstream deal. "He bought up all these planes," says Aboulafia, "and he gambled that the market would keep rising. It did." Santulli wasn't pounding on doors anymore; he was beginning to enjoy a network effect, la Metcalfe's law: The more his network grew, the more valuable it became. Now customers were coming to him, sometimes joining waiting lists for shares on the hot planes.

One customer who came calling round about 1995 was Warren Buffett, in from Omaha with his wife, Susan, who was interested in getting a share of her own jet. "We went over to Teterboro, and Rich was there in a Hawker 1000," Buffett recalls. "And my wife fell in love on the spot." With Santulli or the plane? Buffett laughs. "Believe me, I don't ever want to give her a choice between me and Rich. She would probably leave me in a minute."

It wasn't long after Buffett bought NetJets shares that he became the company icon. Santulli asked him to appear in ads, and Buffett agreed. (Since he bought the company, Buffett has starred in just about every NetJets promotion. At a NetJets-sponsored charity event last year, the company auctioned off a jet trip and a round of golf with Tiger Woods - featuring Buffett as caddy.) Buffett helped Santulli position NetJets as an elite business club. And Santulli's fractional cost-sharing model began to open the door of private jet travel to more people - without letting that door swing wide open.

That was an important part of the formula, because the sense of belonging to an exclusive group - far removed from the grunts and salespeople who bump their way into commercial first class nowadays - is important to NetJets owners. "These are people who've left the airlines behind and now want a certain quality of life," says Santulli.

Santulli kept the club special by not divvying up the shares too much. NetJets won't offer anything less than a sixteenth share (and a half-million dollars down). "I'm not interested in commoditizing this business," he says.

By the same token, he could have bought smaller, less expensive planes, but Santulli went with pricier Hawkers, Falcons, and Gulfstreams. And unlike competitors, he won't traffic in discounted used planes. "Not interested," says Santulli. "I don't want the kind of customers who are looking to save a few bucks on a plane that's old enough to go to college."

What Santulli wants - and seems to have achieved so far - is to operate in a particular zone, so that his business will remain affordable enough to grow steadily, but also unquestionably, awesomely upscale. This formula may be even harder to calculate, but Santulli is aided immeasurably by the fact that he's selling intangibles - time, convenience, status, a relationship - as much as partial ownership in a private jet. And for any very important person having trouble justifying the cost as smart, savvy, or fiscally responsible, there's always the kicker: This is how Warren Buffett, the original budget billionaire, flies.


Buffett himself has become the super-rationalizer of just-in-time jet travel. On a recent afternoon, I called him at his Omaha office and within 10 seconds he launched into the rap he has given to college students at the University of Nebraska. "I say to these kids, 'Lookit,'" Buffett says, in his arch, folksy delivery, "'we both sleep on the same mattress seven hours a day. We eat in the same places - I go to McDonald's, you go to McDonald's. I wear the same clothes you do - I pay more, but they look cheap when I put 'em on, so it doesn't make any difference. There's really no difference in our lives - except that when I travel, I really travel differently than you guys. Yes, it costs a lot of money flying on a private jet - but it's one of the few areas where money can actually change the quality of your life.'"

It wasn't long ago that Buffett was calling business jets a waste of money. Then he grudgingly bought a jet and named it Indefensible. But once Buffett got hooked on fractional ownership, the jet wisecracks stopped; he started putting everyone in his family on jets, even his 94-year-old Aunt Katie. (Buffett told Santulli, "She needs a plane; send her the contracts. And send her the bill, too - she can afford it.") He started rhapsodizing about jets and quality of life. And - most important, from Santulli's perspective - Buffett started to believe that the business had a very big upside.

Buffett was sold on the NetJets business a few years after Santulli sold him that first jet share. "It took me even less time to sell him the business than to sell him a share," says Santulli. Buffett was predisposed to buy. In an earlier conversation with Santulli, he told him, "If you're ever thinking about doing anything with this company, give me a call." Santulli made that call in 1998, because he was being pressured to go public by part-owner Goldman Sachs, which had invested three years earlier. Santulli didn't want to answer to Wall Street. "He called me up, and we made a deal - bingo," says Buffett, who paid $725 million. Is Santulli that good a salesman? "He's one hell of a salesman," says Buffett. "But it didn't hurt that I liked what he was selling."

Buffett based his decision on two factors. First there was Santulli's commitment to the business, which was pretty obvious. Second, Buffett looked for what he looks for in everything he buys, all the way down to the shoe companies. "What I needed to figure out," he says, "was this: Is the service worth the money to people? The answer in my book is yes - and the proof is, nobody that tries it ever quits."

Wasn't Buffett concerned that a luxury business like this could get flattened by a downturn? "I don't worry about that,"he says. "Will there be as many people buying in a recession? Who knows, but it won't make any difference over 20 years. And the thing is, people in the program aren't going to give up their planes. Most of these people have enough money to get through a downturn. So the service revenues won't get hurt."

That seems to be the case so far. When the Nasdaq began to slump last year, Santulli braced for a withdrawal by crushed dotcom millionaires. He lost only a handful of shares, while adding hundreds of new ones (the company now has more than 2,000 owner/members). This spring, with the market in a year-long spiral, a handful of devastated investors told Santulli they wanted to sell - but new customers kept coming in. Santulli claims he is benefiting this time from what he observed in the early '90s - the "tumble-down" effect. As rich guys get squeezed, they trade in full jet ownership for a fractional share. "I could name - but I won't - four or five Internet companies whose owners laughed at us when we tried to sell them a fractional during the boom," Santulli says. "They said, 'Ha, I'm worth $2 billion; I'll buy my own G IV.' Guess what? Those guys are now saying, 'Can you sell my $30 million airplane? Because I'd like to get a share instead.'"

Still, low-end competitors sense opportunity in the air, so to speak. "In a downturn, any kind of jet ownership becomes an acute cost, and it's going to get attention when it's time to cut," says Matt Andersson, who runs the new Indigo charter flight service. Based in Chicago, it sells individual seats on private jet flights to New York and Atlanta, with DC on the way. Says Andersson: "When things get tough, people are going to start divesting themselves of their planes and looking for realistic alternatives."

Or, if they do continue to buy shares, they'll hunt for bargains. So says Kenn Ricci of Flight Options, which is trying to undercut NetJets by selling shares in older jets, aged 15 to 20. Ricci has heard Santulli's barbs about planes that are old enough for college, and insists that most of his planes are "barely old enough to get a driver's license." The bottom line is that older planes cost as much as 35 percent less; Flight Options can put you on your own jet for less than $200,000. Which is still pricey, Ricci concedes. "We're not selling toilet paper here; this is not a staple," he says. "So yes, there is some vulnerability in a downturn."


Santulli isn't fazed. "If there's a downturn in the market tomorrow," he says, "I can still write a check for a billion dollars."

That's not as far-out as it sounds. Santulli has spent $14 billion on jets over the last five years. He has also invested heavily in NetJets' infrastructure. Housed in Columbus, the operations center is, in effect, the eighth-largest airline in America, running 250 to 350 flights a day. But there's one big difference: You know how any kind of unscheduled event causes a disruption at the airlines? At NetJets, everything is unscheduled. NetJetters fly whenever and wherever they want with 4 to 6 hours' notice.

To make such a random flight system run smoothly, you have to play what Buffett has called "three-dimensional chess." The operation is run military-style; generals Lassiter and Tibbetts are long gone, but other Air Force and Army veterans abound, and the big dog here is not Santulli (he mostly stays in New Jersey) but his executive VP, Richard Smith, aka "Smitty." He barks, Patton-like, at the troops every morning in preparation for the day ahead.

On one recent Friday morning, Smith is reviewing delays from the day before, taking each division manager to task. For every delay there must be an explanation. Some are more significant than others, and this morning, one really takes the cake: Susan Buffett - you-know-who's wife - was delayed four hours out of Decatur yesterday, because of a de-icing holdup. "Susan was fine with it; they did a great job of keeping her entertained," a manager explains to Smith. He's not comforted. "We shouldn't be dopes; we should be ready for that," he says. Smith gets a service update: 36 planes are down for scheduled or unscheduled maintenance. He gets bad news from the meteorologists (there are 12 full-timers on staff) and sums it up: "So what do we got, 250 flights today? And the weather's bad. Typical day."

The obsession out here is with safety: The word drops off Smith's lips constantly. That's why experienced pilots are treated like royalty; among other things, they have their own plush lounge in Columbus. In the midst of a pilot shortage in the industry, NetJets is considered a haven - not so much because of pay (the most experienced international pilots can make more on the commercial airlines), but because NetJets schedules are designed to allow pilots to stay closer to home and have more time off.

The private jet business took a big hit on safety when golfer Payne Stewart was killed in October 1999 in a crash of a chartered Learjet. And again when a chartered Gulfstream III went down in late March, killing all 18 people on board. But Santulli and his aggressive sales staff are not above using catastrophe to their advantage: In an interview with CNBC, Santulli warned that people should be asking hard questions about safety before they step onto a chartered jet. "If Payne Stewart had asked those questions, he might still be alive," Santulli said. (There have been 16 fatal Learjet accidents since 1990.) The NetJets safety record is spotless. Indeed, this has become part of the pitch to those who might be thinking about trying to save money on alternative jet travel. NetJets' Russell likes to quote a line from Buffett: "If you were hiring a brain surgeon, would you ask, 'Who's the cheapest?'"

In the now ferocious competition to grab jet shares - among NetJets and three relative newcomers, Flight Options, Bombardier's FlexJets, and Raytheon's Travel Air program - safety and cost are the hot buttons. The newcomers are in for an uphill battle, because jet ownership is largely a referral business - one titan tells another. This confirms that being first was hugely important for Santulli; Aboulafia calls NetJets "the 800-pound gorilla of this business" and adds, "Unless they screw up, they'll be in a good position for a long time."

Still, the competition is chipping away, and they've managed to siphon off a bit of NetJets' market share, which slipped from 52 percent to 48 percent last year. Flight Options has been the biggest challenger, banging away at the low end with its cheaper, post-pubescent jets. FlexJets, meanwhile, boasts that its planes (made by parent company Bombardier) are newer than Flight Options'. FlexJets VP Mike Riegel boldly predicts: "This game will be won by the company that controls the supply chain." Riegel says he wins his head-to-head sales battles with his competitors because the newer Bombardier planes have modernized safety features.

The jet share companies, including NetJets, attack each other mercilessly, according to a Houston investment banker who uses a couple of the programs to create a personal stable of aircraft. "It's ridiculous; they trash each other like used-car salesmen," he told me. "It finally got to the point where I said to two of them, 'If you guys don't stop all this bad-mouthing, I'm going to drop you both.' That worked."

Santulli won't stoop to mention his competitors by name. When I ask about the fractional market, he says, "I don't think in terms of a market; to me there's only NetJets. I truly cannot understand why somebody would even think about doing business with anybody besides us."

He may not be willing to acknowledge what's going on around him, but Santulli has, like all catalysts, helped spawn a burgeoning industry now poised to take off. Eclipse Aviation, a new company founded by Vern Raburn, a veteran of Microsoft and Lotus, is working on a next-generation jet that would be smaller, faster, and - most important - cheaper than existing jets. The plane will be hitting the marketplace in the next two or three years, and the hope is that it will create a thriving "air limo" market. You'll be able to summon a jet like a taxi - at a travel rate of a dollar a mile, according to Raburn's projection. That's comparable to first-class airline rates.

Meanwhile, NASA is testing its own small aircraft transportation system (SATS). According to NASA's Bruce Holmes, who is heading up the project, the objective is to enable large segments of the public to bypass the airline hub-and-spoke system by using small jets that can land at regional airports and airfields. The federal government has deemed the SATS program a priority and is funding it accordingly.

"It's become clear," Holmes explains, "that the delays in the current transportation system are a silent killer of economic development." NASA sees the Eclipse jet as a possible solution. But Holmes says the work is just beginning because the planes need to be turned into "intelligent nodes" with enough onboard technology to let them land almost anywhere - sans control towers, radar, and the rest of the airport infrastructure.

"This could allow a company like NetJets to access a whole new layer of the market," Holmes says. Raburn is not so sure: "The model that Rich has pioneered is great, but it doesn't scale down well." But if NetJets were to shift its focus to more affordable jets, he says, "Rich could be the next IBM."

Don't bet on that. Santulli is actually thinking in the other direction: bigger, and more expensive. This spring he rolled out his newest offering - the mammoth Boeing Business Jet. Price tag: $48 million. (But hey, you can get a quarter share for $12 million down!) And when Santulli talks about "the plane of the future," he's thinking fast, not cheap:the private supersonic jet. He's been working with Gulfstream, Falcon, and NASA. If they can build it, "we will be serious about placing a large order," Santulli says, figuring to sell one-eighth supersonic shares for, oh, $10 million or so.

To some of the coming jet revolution's true believers, Santulli's elitism is irritating. Indigo's Andersson, who wants his affordable jets to wrest power from the evil airlines, explodes at the notion that NetJets will play an important role in changing air travel. "Do you really believe a company that sells jets to wealthy people will change the marketplace? Their endorsers are Tiger Woods and Warren Buffett! This means nothing to you and me and most people. It's about getting Mr. Wealthy to write a check!"

Hell, yes, it's about that. And don't expect Santulli to make any excuses for it. His customers are at the top, and so is he. He's riding the Gulfstream these days, and things are looking good. He has his horses: He breeds them and races them, and uses his math skills to better his odds. And he has a bright future at Berkshire Hathaway, it would seem. Buffett has not said who will succeed him as CEO - he is keeping the name in a sealed envelope at headquarters in Omaha. But Santulli, who talks to Buffett almost every day, is considered a front-runner.

"I think he'll be running Berkshire," says InfoUSA's Gupta, who is close to both Buffett and Santulli. Santulli smiles when the subject is raised, and says, "Whatever Warren wants." And Buffett? All he'll say on the matter is: "He could succeed me a lot easier than I could succeed him."