Newsmakers 2009: Frax founder Santulli ejects from NetJets
Individually last year there was no taller toppling in business aviation than that of NetJets founder and chairman Richard Santulli, who on August 4 announced his resignation from the fractional company he had been building since he acquired Executive Jet Aviation in 1984.
The kid from Brooklyn who had taken his first airplane ride at the age of 21 (en route to his honeymoon in Puerto Rico), and whose goal in life then was to make the lofty sum of $25,000 a year, eventually sold his company to Warren Buffett for $725 million in 1998–and kept his job running the show.
In the interim since his first airplane ride, Santulli had been a Brooklyn Polytechnic math professor and worked for Shell Oil, but he balked at relocating to Houston and quit the oil company to join investment bank Goldman Sachs as a quantitative analyst, writing computer programs for corporate acquisitions, leasing aircraft to airlines and arranging helicopter financing. He left Goldman because “I wanted to see if I could do it on my own” and built a successful helicopter leasing company called RTS Helicopters.
Buying EJA, a company run by ex-military brass with a passion for record-keeping, gave Santulli access to a treasure trove of data for every flight the company had operated in the past 20 years and allowed him to devise the fractional concept–a model that has fueled a 20-year bonanza for the OEMs but in the context of the current economy is now under scrutiny as being flawed.
Speculation at the time of his departure from NetJets was that Warren Buffett was distressed by Santulli’s reluctance to bring costs in line with revenues by letting go the people who had built his company, and the layoffs that followed the appointment of Berkshire Hathaway stalwart David Sokol to replace Santulli lent credence to this theory.
In March last year, in an interview with Plum TV’s Beyond the Boardroom, Santulli singled out his greatest achievement at NetJets as “inspiring the culture of the company.”
He also recalled his mother’s advice that “God will not be outdone in generosity,” a credo that inspired Santulli to be the driving force behind the Intrepid Fallen Heroes Fund, which enlisted radio personality Don Imus to shame the government into greatly boosting the compensation paid to the families of military personnel killed in action, and funded a rehab center in San Antonio for injured vets.