Richard Santulli, who resigned as CEO of NetJets in August 2009, has returned to the aviation industry with the launch of Milestone Aviation Group. Mr. Santulli secured initial funding of $500 million of equity capital and will serve as Chairman of Milestone. Milestone will have headquarters in Dublin, Ireland and has operations in Columbus, Ohio and Colts Neck, New Jersey. The company plans to focus exclusively on helicopter and private jet markets. Here is a description of Milestone’s main focus from a news release issued today:
Headquartered in Dublin, Ireland, Milestone is the first global specialty finance company focused exclusively on helicopters and private jets. Milestone provides aircraft owners and operators worldwide with personalised financing options not otherwise available. The Company offers 100% financing on new, pre-owned and sale-leaseback transactions. Customers select their own aircraft and, following a credit review process of 3-5 days, Milestone purchases the aircraft and enters into a lease agreement with the customer. Customers operate the leased aircraft and cover all operating costs without bearing residual risk.
Mr. Santulli invented the fractional jet ownership industry in 1986 and rolled out the NetJets brand which quickly grew popular as a more flexible and cost effective alternative to full aircraft ownership. Warren Buffett was one of the company’s customers and liked the service so much that he purchased NetJets for $725 million in 1998. The company failed to meet financial expectations over the past eleven years and accumulated aggregate pre-tax losses of $157 million from 1998 to 2009. Mr. Buffett replaced Mr. Santulli with David Sokol in August 2009 who successfully returned the company to profitability after a major restructuring.
What does Warren Buffett think of Mr. Santulli’s return to aviation? Apparently there are no hard feelings between the two men according to Mr. Santulli who was quoted by Bloomberg in an interview today:
“I just spoke with Warren yesterday,” said Santulli, 65, a one-time head of Goldman Sachs Group Inc.’s equipment-leasing group. “He asked me to send him materials about the company.”
To read more about Milestone Aviation Group, visit the company’s website.
Disclosure: The author of this article owns shares of Berkshire Hathaway.