A Look At The History Of Marquis Jets

Since it was founded sixty years ago in 1964, the jet charter company Netjets
has grown rapidly, innovating with its fractional ownership and jet card business models to create one of the most successful private aviation companies ever. With hundreds of aircraft at its disposal and dozens of different subsidiaries, the growth and expansion of NetJets did not happen overnight, and the company has developed its now-massive global footprint through a series of mergers and acquisitions over the years.

At its core, NetJets took the American desire to fly private in the early 1960s. They found a way to monetize it into a membership scheme, one which turned private aviation from an extremely luxury affordable only to royalty and celebrities to a service that had a monthly price tag attached to it. While still astronomical by the standards of most consumers, NetJets memberships today allow people to pay for the social privilege and prestige that come along with flying in a private jet.

This jet card system became the hallmark of NetJets operations, although the company also developed a brokerage business, a one-off aircraft charter business, and multiple other ventures. With the backing of Warren Buffett’s investment behemoth, Berkshire Hathaway, NetJets has been able to fund the acquisition of competitors over the years, allowing it to grow organically by directly building out its market share.

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A notable acquisition took place back in 2010

Quite possibly the most notable acquisition ever undertaken by NetJets took place in 2010, when the Buffett-backed company, which was already a force to be reckoned with in the world of private aviation, expanded by purchasing Marquis Jet, a company founded by two high-profile entrepreneurs that it had already partnered with in years prior. Marquis Jet came to the table not just as a nationally recognized brand, but also with a unique innovation to the business model that would help change the course of NetJets’ growth.

Photo: InsectWorld | Shutterstock

Founded by rapper-turned-entrepreneur Jesse Itzler and American businessman Kenny Dichter, Marquis Jet pioneered the jet card membership system, which differed from the fractional ownership model that had been in use by companies like NetJets and its competitors at the time. After launching the company in 2001 and selling it off to NetJets nine years later, Itzler did not return to the world of private aviation, while Dichter would go on to launch Wheels Up, a company that has grown to become one of the largest private charter companies on the market today. In this article, we will take a deeper look at the story of Marquis Jet, and why its acquisition was such a major catalyst for NetJets long-term growth and development.

Marquis Jet had an attractive value proposition for customers

The story of Marquis Jet began back in 1999, when Dichter took his first ride on a private jet between New York and Boston, onboard a friend’s Hawker 800 XP. According to Business Jet Traveler, it was at this time that Dichter began to notice the untapped potential of the private jet market. He sought out the partnership of Jesse Itzler, a friend who had made a name for himself in the world of entertainment, having released rap songs that ultimately ended up being staples of the 2004 movie White Chicks. Itzler’s name recognition in the New York Area was especially strong, as he had also released one of the most recognizable anthems of the New York Knicks.

Photo: Philip Pilosian I Shutterstock

The business model developed by Dichter and Itzer would vary from that of existing jet charter companies in a key way. At the time, companies like NetJets operated business models which only provided customers with two options. Clients could either participate in a fractional ownership scheme or purchase a one-off charter flight, something that provided good value for low-volume and high-volume private jet travelers but a rather poor value for those in the middle.

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Dichter and Itzer’s Marquis Jet card was designed to offer 25 hours of flight time on NetJets-owned private jets for as little as $130,000, allowing them to have the flexibility of taking private jets whenever they wanted but without the hefty commitment of investing in a fractional ownership scheme that could involve paying for fleet and operational infrastructure. These cards became extremely popular with those looking for medium-volume access to private jets without a long-term financial commitment.

The personality and management styles of both Dichter and Itzer have long been seen as key elements to the company’s ultimate success. Both describe themselves as team players, and neither hold an MBA nor any other advanced degree. Marquis Jet, a company that had over $800 million in sales by 2009, was run by just 120 employees, despite having a membership base of around 4,000 people. On any given day in 2009, around 3% of all members were flying and this represented about 10-15% of the total flights which would be operated by NetJets aircraft.

Photo: Vytautas Kielaitis | Shutterstock

The company had also taken large strides to maintain a nationally recognized image, including partnership deals with Bergdorf Goodman, Montage Hotels Resort, and Avis Car Rental, all of which provided exclusive benefits to Marquis Jet cardholders. The company’s relationship with NetJets had also helped it maintain its image, something that co-founder Dichter described as follows:

“I would say on an annual basis, between 5 and 10 percent of our owner base is graduating up to NetJets. On the other side of the coin, the NetJets sales force actively sells Marquis cards to prospects that aren’t quite ready for the fractional commitment.”

NetJets was benefiting tremendously from its relationship with Marquis Jet, and the pair of founders were continuing to see sales increase and its customer base grow. The Marquis Jet had become a major status symbol in America, especially within cities in the Northeast like New York and Boston.

An acquisition was going to happen sooner or later

Given that NetJets was already so heavily involved with Marquis Jet’s business, it is not unsurprising that an eventual acquisition would likely be in the works. Marquis Jet was turning a profit on the cards it was selling, something which NetJets certainly wanted to get in on. The company agreed to buy Marquis Jet from its cofounders in 2010, according to Corporate Jet Investor.

Photo Kevin Porter | Shutterstock

It appeared that both parties were extremely excited to announce the acquisition at the time, at least per the rhetoric of both companies’ leaders. In a statement to the media at the time, David Sokol, the chairman and Chief Executive Officer of NetJets had the following words to share:

“By bringing NetJets and Marquis Jet together, we combine the unquestioned industry leaders in safety and owner service and, simultaneously, we create the finest sales and marketing organization in private aviation.”

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NetJets indicated that the merger would allow it to reduce costs and would ensure that it could provide the most competitive pricing for the market. Kenny Dichter had something relatively similar to say at the time, sharing the following words with the press:

“As part of NetJets, Marquis Jet can best capitalize on new opportunities over the long term and provide even greater value to our Marquis Jet Card Owners.”

The ability to have no middleman between jet card members and NetJets management allowed for more efficient communication with passengers in the event of delays or other aircraft-related issues. NetJets continued to offer jet cards following the acquisition, launching the signature Marquis Jet Card by NetJets.

So what’s the bottom line?

At the end of the day, the NetJets acquisition of Marquis Jet served to significantly expand the company’s footprint and did so by adding a new company with an extensive reputation to its system. The two founders of Marquis Jet also proved themselves to be respectable entrepreneurs.

Photo: InsectWorld | Shutterstock

While Itzler mostly pivoted away from private aviation in favor of pursuing ventures in other fields, Dichter was able to use his experience to help launch another extremely successful jet charter company. At Wheels Up, he would continue to expand the jet charter business model, building out a new set of flexible options for customers to choose from. Today, NetJets remains the largest name in private aviation, with a history of successful acquisitions.

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