Q&A: Jordan Hansell of NetJets

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From the April 2014 issue of Columbus CEO
  • Photo by Tim Johnson

Jordan Hansell
Chairman & CEO
NetJets

Education: Bachelor’s degree, Duke University; law degree and master’s degree in public policy, University of Michigan.

Career highlights: President, NetJets; chief administrative officer and general counsel, NetJets; attorney, Nyemaster, Goode, West, Hansell & O’Brien; clerk, U.S. Supreme Court Justice Antonin Scalia.

Jordan Hansell enjoys working from a Bombardier Global 6000 even more than from his office overlooking the Port Columbus airfield from NetJet’s headquarters. “You can converse and work in perfect solitude,” says Hansell.

The in-flight environment is valued by the many chief executives who fly with NetJets, says Hansell. “For people who are very busy, who want to try to accomplish a lot and have a lot of responsibilities, we try to make their life easier.”

The day of this interview, Hansell was monitoring a powerful winter storm moving into the northeastern United States. For several days leading up to the storm, NetJets had been in contact with its aircraft owners and fractional fliers. Predicting the unpredictable, from severe weather to gloomy global economies, is top priority for NetJets. A service level that puts safety first and anticipates the needs of its busiest clients has kept the company in business for 50 years, says Hansell.

“As the world changes you have to take different steps and use different tactics,” he says. As CEO, Hansell’s end goal is to keep NetJets competitive despite turbulence in the global markets in which the company operates.

What are NetJet’s challenges moving into the next decade?

We want to expand internationally beyond our large bases in the United States and Europe. We hope to be open in China in the next few months. We (look at getting back in) the Middle East, where we were at one point...We look at South America (and) Russia...although we operate in and out of Russia today.

We operate in and out of 170 countries, we fly everywhere. When I say expand internationally I mean expand our operating bases. Over the next ten years we’ll be looking to do that. And we’re constantly looking at ways to use our size and scale and financial stability at Berkshire Hathaway to differentiate ourselves from all the competition in the private aviation airspace.

Some of that we’ve already done and are now just taking advantage of, for instance we ordered $17.6 billion worth of aircraft we’re denoting the signature series. We’re attempting to differentiate those planes from anything else anyone can add to the market.

Because you operate across the globe, whats your outlook on the global economy?

I’m looking for moderate growth on the whole. That depends which region you’re talking about, but I would expect low-single-digit global GDP growth. That’s not bad, I expect it to come from some of the more mature economies, which is a switch from where it’s been the last couple of years.

Did NetJets fly in and out of the Winter Olympics in Sochi?

We (had over 100 flights) going to the Olympics.

Those are difficult environments in which to operate. Heightened security concerns, you have a number of people who want to get in and often, as is true in this case, the locations are set up for the specific event, which means the infrastructure isn’t built, generally speaking, to handle the kind of volumes that one might see in these circumstances. You have to balance all of those additional challenges.

How important is private aviation to the economy nationally and then in Ohio?

It’s very, very important. We are the largest operator in the world in private aviation…We employ about 1,200 people just in these facilities here in Columbus, then another several hundred in Cincinnati in our subsidiary Executive Jet Management. We’re a large employer in the state of Ohio, and this is an industry that tends to create a number of middle class jobs--people are relatively well paid in aerospace. So we have, I think, that much more of an important impact on the local economy.

In what ways do you work with Port Columbus?

We’re on the airfield, and that’s an important benefit for us. They’ve been terrific partners. One of our Berkshire sister companies, Flight Safety, is going to be building a building just behind us to house simulators that we use to train our pilots. That’s in partnership with the airport. They’ve been very helpful in putting all that together for us. In the main, they’ve been flexible letting us run our operations here and in creating those footprints that we’ve found so useful.

You recently returned from China—how are your plans unfolding there?

We hope to be up and operating in the next couple of months. We’re getting very close to being finished and we’re quite excited about it. The business model there will be like the one we have in our subsidiary in Cincinnati, that is, we will manage aircraft wholly owned by somebody else on their behalf.

What feedback do you get from other CEOs who travel with NetJets?

They fly a lot, most of them, so they want to make sure that (service is) provided the safest way possible. They like the fact that we have the financial backing of Berkshire; they feel comfortable being invested with us and having a relationship with us. They like how easy and flexible it is; they can give as few as four hours’ notice to get a plane wherever they are in the United States. They like the service level of our teams. They get to know them well, their executive assistants get to know us well.

There’s cache attached to the Berkshire Hathaway name. What’s it like working for Warren Buffett?

It’s great, it’s exactly what it would seem like. He’s hands-off, but always available. If I have questions, I can just call him and run things by him. His advice is always very, very helpful. He’s very supportive of NetJets, as I think is true of all his subsidiaries.

Did you foresee a career in private aviation?

No, I thought I wanted to be a politician. So, I went and got a law degree and a public policy degree. It turned out I didn’t think I had the constitution to do it.

How does your understanding of policy making help you in this role?

We’re heavily regulated, all around the world. Anytime we do anything we have to make sure we’re compliant and that we understand what’s happening in the various decision making bodies around the world, whether it’s Brussels or Lisbon or Washington or Beijing. It’s helpful to have some understanding of how those things work, understand how people think, understand how we can fit in most productively in the systems they’re creating.

What did you learn clerking for justice of the U.S. Supreme Court Antonin Scalia?

A whole lot. He’s the smartest man I think I’ve been in a room with. Warren’s close, but it’s a toss-up depending on what area you’re talking about.

What Justice Scalia always did that I was impressed by and tried to emulate somewhat is to think clearly. If you can do that about what is a relatively complicated decision, it’s often the case that your thinking becomes clearer and your answers become easier to come by.

For instance, he has adopted in his constitutional exegesis certain heuristics about how to approach issues that come up repeatedly. When I as a newbie would come across a problem, I would be struggling with it and struggling with it. Well, he’s already thought about it, he’s thought about how he ought to think about it, and so solving any individual new variant of that question was not all that complicated to him.

Anytime you’ve got a very complicated system like NetJets, it’s helpful to have these sorts of heuristics to address variants without having to recreate the wheel. So we as a company are trying to create heuristics for a business modeling perspective, or business philosophy perspective, and I think it’s sped up the pace of change in an organization as large and diverse as ours.