The Private Jet Tax Bracket

In 1986, an entrepreneur named Richard Santulli founded a company called NetJets to sell fractional shares of private jets — typically one-sixteenth shares granting roughly 50 hours of annual flight time. In 1998, Warren Buffett bought a NetJets share for his family. Five years later, Berkshire Hathaway acquired the company outright. By 2024, NetJets had grown to operate over 950 aircraft, the largest private-aviation fleet in the world, with annual revenue exceeding 10 billion dollars.

The post-pandemic period has been the best in the company's history. Private jet hours flown grew over 40 percent between 2019 and 2023. NetJets' membership backlog stretched 24 to 36 months at multiple price points. New competitors — Wheels Up, Vista Global, FlexJet — emerged but none has displaced the NetJets economics.

The Fractional Model. A typical fractional ownership share at NetJets ranges from 600,000 dollars (one-sixteenth share, 50 flight hours) to 5 million dollars (full ownership equivalent, 800 hours). On top of the share price, members pay monthly management fees (typically 30,000-50,000 dollars per month for one-sixteenth) and per-flight occupied-hour rates. The total annual cost for moderate use sits around 500,000-800,000 dollars for a one-sixteenth share, and several million for larger fractions.

This is structured as a financial product. Members are not buying a specific airplane; they are buying access to the fleet. NetJets handles maintenance, crewing, scheduling, and logistics. The fractional share entitles you to an aircraft of the agreed type within a certain number of hours' notice.

The Pandemic Pivot. Private aviation's massive growth in 2020-2024 was driven by two forces: substantial wealth creation in tech and finance during the COVID-era markets, and high-net-worth aversion to commercial aviation during the pandemic. Many new fractional owners came from the Bay Area and New York tech ecosystems. Others were finance executives whose firms were quietly subsidizing private jet access.

The trend has continued even as commercial flight has fully recovered. The economics of executive time — for executives whose hourly opportunity cost can be measured in tens of thousands of dollars — make private aviation rational for any business trip lasting under 8 hours. Combined with the demographic shift of new ultra-high-net-worth wealth, the demand has structurally expanded.

The Competitive Landscape. NetJets' dominance reflects scale economies. With 950-plus aircraft and 100-plus FBO bases globally, NetJets can guarantee jets within 24-48 hours notice anywhere in North America and most of Europe. Competitors with smaller fleets cannot match this responsiveness. Wheels Up went public in 2021 at a 2.1-billion-dollar valuation, then collapsed to under 100 million by 2024 due to operational issues. Vista Global has expanded aggressively but remains private and operates with substantial leverage. FlexJet, owned by Directional Aviation, has grown but operates at a smaller scale.

The Bigger Pattern. Private aviation as an asset class is a useful indicator for ultra-high-net-worth wealth concentration. NetJets membership growth tracks high-net-worth liquidity events (IPOs, M&A, executive bonuses). When NetJets' new-member onboarding accelerates, you are seeing a leading indicator that the wealth segment is feeling flush. When it slows, that segment is consolidating.

The continued strength of NetJets through 2024 and into 2025 suggests that high-net-worth wealth is not just resilient but actively expanding, despite all the macro narratives about wealth tax, inheritance reform, and inequality concerns. The private jet bracket is structurally protected from most macro headwinds.

The Lesson. Berkshire Hathaway's acquisition of NetJets in 2003 was, in retrospect, one of the cleanest examples of the kind of business Buffett favors: stable demand from a specific demographic, high switching costs once members are onboarded, scale advantages that defend against competition, and predictable cash flows over decades. The investment has compounded quietly while attracting almost no public attention.

For investors, the lesson is to look for businesses that serve narrow demographics with structural protections from competition. NetJets is one of the most successful examples in modern American business, and most people who have not flown private have never heard of it.

Now go enjoy your Saturday. Probably not from 41,000 feet.

Sources: - NetJets Inc. operational data (publicly disclosed) - Berkshire Hathaway annual reports - Industry coverage: Aviation Week, Flightaware, Bloomberg