In a rather clubby press conference at the NBAA show last Monday Gulfstream and Executive Jet announced agreements to order more aircraft and for Gulfstream (KC Aviation) to maintain others. The new aircraft orders include the purchase of 10 Gulfstream V and 14 GIV-SP aircraft plus options for an additional 12 GVs. The GVs will become part of a new Gulfstream V Shares program. Also included in the package was a long-term maintenance agreement for Executive Jet's fleet of Falcon, Hawker and Gulfstream jets to be fulfilled by the former KC Aviation, now part of Gulfstream. The value of the purchase and service agreements is estimated to be nearly $1.3 billion of which the service portion represents an estimated $250 million.

Executive Jet's ubiquitous new owner, Warren Buffett, participated in the press conference along with founder and chairman Richard Santulli. Posing for a crush of press photographers, the billionaire Buffett symbolically handed Forstmann his wallet, signifying the financial impact of the just-announced deal,. Forstmann responded by asking Buffett if he had just seen a moth on the wallet. Buffett acknowledged as much, but added that it was a very old moth.

Gulfstream and Exec Jet launched the Gulfstream Shares fractional ownership program in 1995. With last week's announcement, Executive Jet will have ordered 44 Gulfstream IV-SP aircraft for the program and 12 Gulfstream V ultra-long range aircraft, plus options for 12 additional GVs. This brings the total North American Gulfstream Shares program to 68 aircraft. The Gulfstream V and Gulfstream IV-SP aircraft included in last week's agreement will be delivered through 2004, with delivery of the aircraft under option extending through 2006.

"We are delighted to expand the highly successful partnership that exists between our two great companies with a comprehensive agreement that will create substantial new revenues for Gulfstream for many years to come," said Ted Forstmann, chairman of Gulfstream. Forstmann had every right to be delighted. Earlier in the day the Savannah, Georgia company had announced record third quarter sales and earnings. Revenues climbed 35 percent over the comparable period of 1997 with earnings rocketing 91 percent higher.

For his part, Santulli was seemingly everywhere at the NBAA show. When not in the Executive Jet exhibit pressing the flesh with customers and prospects, the pioneer of fractional ownership was with Buffett in press conferences such as the Gulfstream event, announcing new orders for corporate aircraft.

The five-year service agreement calls for maintenance and refurbishment of Executive Jet's fleet of Falcon, Hawker and Gulfstream jets to augment EXEC JET's existing maintenance arrangements with aircraft manufacturers. Through this agreement, Gulfstream will provide 24 hour-per-day, seven day-a-week, worldwide airframe support for the over 150 Falcon, Hawker and Gulfstream aircraft currently in service or under contract with EXEC JET's NetJets program. Gulfstream will also provide engine and auxiliary power unit (APU) support for EXEC JET's Falcon and Hawker fleet. Work will be performed by Gulfstream's K-C Aviation, recently acquired from Kimberly-Clark for $250 million cash.

Gulfstream will use its Westfield, Mass. service facility as a key center for the EXEC JET maintenance work. Strategically located just a short flight from New York, the Westfield location will provide added convenience and flexibility to EXEC JET and other business aviation customers located in the Northeast Corridor of the US. Gulfstream will also use the company's other five service facilities located throughout the United States to support the EXEC JET agreement as needed.

Now in its third year, the Gulfstream Shares program allows customers to purchase fractional interests (typically one-eighth, one-quarter, and one-half shares) in new Gulfstream IV-SP and Gulfstream V aircraft. Designed for individuals or corporations with less than full aircraft requirements, Gulfstream Shares allows customers to own the world's safest and most reliable business aircraft without the substantial investment required for outright aircraft purchase. The program also provides value to existing aircraft fleet operators who may need supplemental lift capability for special needs.

Participants in Executive Jet and Gulfstream's Gulfstream Shares program pay the share purchase price plus a fixed monthly management fee and hourly rates for occupied flight hours. In return, they are guaranteed aircraft availability and a fair market buy back any time after three years. Gulfstream provides technical support, aircraft maintenance and supplemental sales and marketing support for the program.

In 1986, Santulli pioneered the concept of fractional ownership through Executive Jet with the introduction of the company's NetJets program. In 1996, Executive Jet expanded the NetJets program internationally with the introduction of NetJets Europe. Executive Jet has more than 1,000 owners and manages over 170 aircraft.

In May of this year, Gulfstream announced the sale of 12 Gulfstream IV-SP aircraft to a group of Middle East investors to expand the Gulfstream Shares fractional ownership concept to the Middle East - the first program of its kind in this important and growing region. The first Gulfstream IV-SP was delivered into this program in September. This aircraft is now being custom outfitted by Gulfstream and will be delivered for entry-into-service in 1999. Executive Jet will operate the program. Gulfstream and EXEC JET say they are also evaluating opportunities for program expansion in other regions of the world.