July/August 2009

Magellan Jet's was founded as a company based upon growing relationships. Joshua Hebert, Anthony Tivnan and Greg Belezerian, the former executive sales team of Jets.com, have built relationships with their clients for over 10 years. "We have relationships with our clients. They are not just a phone number or an e-mail address to us," according to Joshua Hebert, CEO of Magellan Jets. "We take care of our clients and treat them like friends and family. Whatever they need, we take care of. We feel that is the foundation for delivering exceptional service."

As we focus on our client's needs, safety is first. We continue to work with less than 10% of operators, all of whom have received the highest levels of 3rd party accreditation in safety. Service is second. Whatever a client needs to ensure a great experience is provided. From ground transportation to XBoxes to chocolates to foreign language magazines, we have provided it all for our clients. Finally, pricing has to be reasonable. Whether fixed priced membership or on-demand charter, we are going to provide the best price and value available.

The current economic conditions have changed everyone's perceptions, especially regarding private aviation. We are excited about leading the private aviation industry into a new direction. Over the next few weeks, we will be rolling out a new product offering, which we believe is aligned to the evolving service expectations of our clients. We would be excited to discuss this with you and look forward to continue serving you and all of our clients in the years to come.

DID YOU KNOW...Fractional Owners are Now Required to Pay Property Taxes on California Takeoffs and Landings?

What is the California tax?The California tax is the first law in the country to assess a personal property tax on all fractionally owned aircraft - aircraft managed by fractional aircraft providers but owned by others. Under the law, fractional companies like NetJets are assessed an apportioned property tax on the fair value of U.S.-registered aircraft they manage. The apportionment percentage is calculated by comparing the number of California takeoffs and landings of an aircraft type to the worldwide takeoffs and landings for the aircraft type.

When will the California tax take effect?
The legislation was passed August 24, 2007 but applies to flight activity occurring as far back as 2001. On May 1, 2008, NetJets filed the first property tax statements required to comply with the law. NetJets began to fund the tax by making property tax payments to the State of California in July 2008. We have already paid well over $16 million in tax assessments for flight activity occurring in years 2001-2007, and we will continue to make payments for this period. Starting April 1, 2009, the cost of the tax for each takeoff and each landing in California will be passed to the NetJets Owner.

What will be the charge to NetJets Owners for each takeoff and each landing in California?
Below is a chart that identifies the charges by aircraft type for each takeoff and each landing in California.

Aircraft Type                       Charge                     Aircraft Type                          Charge
Citation V Ultra                        $    70                       Citation X                                  $   225
Hawker 400XP                            105                       Gulfstream 200                              335
Citation Encore+/Encore            165                       Falcon 2000EX/2000                   405
Citation XLS/Excel                      135                       Gulfstream 450/400(GIV-SP)      750
Hawker 900XP/800XP               215                       Gulfstream 550/GV                    1350
Citation Sovereign                       305                       Boeing Business Jet                   2190

Charges may change annually to reflect changes in property tax for the aircraft type.

Are the charges based on the aircraft type owned or the aircraft type requested and/or flown?
The charge for each takeoff and each landing will be based upon the lesser of the aircraft you requested or the aircraft actually provided. If a new aircraft type enters service mid-year, you will be invoiced the charge for the most comparable aircraft type.

Why are NetJets Owners responsible for the taxes when the legislation seems to imply that the tax is on the fractional provider and not the user/ share Owner?
Since NetJets Owners determine the takeoff and landing locations of the aircraft and are contractually obligated to pay state and local taxes on the use of the aircraft, NetJets Owners are responsible for the taxes and will be charged for them one month in arrears.