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How Google built itself a $82 million private airport

BEAM Staff
June 4, 2018

Public companies in the US have long been known to operate fleets of corporate jets in order to move around their executives in a time-efficient way. Search giant, Google has, however, taken this to another level, with its principals building a private airport for their use as well as that of other tech gurus in the area, for which they paid near $82 million.

Founded by Larry Page and Sergey Brin in 1998, Google rapidly evolved from a small startup to being a mainstream verb. With their rise to a net worth of over $20 billion each, the need for a corporate air department arose. Their first acquisition became a Boeing 767-200 from Qantas in 2005 through their holding company, Blue City Holdings, an entity that belongs to the founders directly and not Google.

Originally built in 1987 as a commercial airliner for the Australian carrier, the plane was purchased by the founders for $15 million. The pair then spent another $10 million converting the aircraft into an actual private jet. Whilst an impressive sum, the transaction was a great deal for the holding, with the cost of construction of a new Boeing Business Jet starting at near $200 million.

Typical BBJ Interior

According to local publications, the converted Boeing had two staterooms, a shower, a dining area, 15 first-class seats and a lounging area. With the capacity to carry a total of 50 passengers as per FAA regulations, the aircraft has since been spotted all around the world.

Looking to use their time in the most efficient way, the Google co-founders struck a deal with NASA to house its private jet a Moffett Airfield, a facility located just a few km from Google headquarters. Under these terms, the founders paid $1.3 million annually to NASA plus extra fees for parking, fuels and utilities as well as a separate lease for one of its hangars.

Famous for its iconic hangar one, a facility that once housed a dirigible and was built in the 1930s by the US, Moffet Field acted as a hub for the private jet fleet of the Google co-founders for several years under the NASA deal. In 2014, another one of the founders' holding companies took over operations of the airfield, in a deal that saw them spend over $200 million as an investment into the site, reducing NASA's involvement.

"As NASA expands its presence in space, we are making strides to reduce our footprint here on Earth." then said Charles Bolden, NASA's Administrator. The facility and Hangar One, over time, are now set to be active research and learning hubs operated by Planetary Ventures, a real estate holding operated by Google.

By that point, the private jet fleet of Google's co-founders and its CEO, Erik Schmidt had grown far larger than their first retrofitted Boeing. By 2011, the trio had at least 8 private jets under their joined holding, all of which were housed at Moffet Field. The first two additions to the informal Google fleet were a pair of Gulfstream V jets.

By the end of 2007, their holding purchased a second Boeing Business Jet, this time a 757 model. In 2008, they bought a Dornier Alpha fighter jet according to the New York Times. Although unconfirmed, the remaining 3 aircrafts owned by Google's founders, are believed to be smaller private jets, used for regional travel.

Fighter Jet / Photo by Tim Felce

In 2013, shortly prior to taking over the Moffet Field facility and aiming to transform it into a facility for knowledge and research, Google's co-founders embarked on an even more ambitious plan for their private fleet, a private airport. The occasion arose when San Jose's airport was looking to release a 29 acre facility on its airstrip previously owned by Atlantic Aviation.

Moving in on the deal, Blue City Holdings, the company operating the private fleet of Google's co-founders, brought in Signature Flight Support to operate the business jet terminal, into the construction of which it invested near $82 million, in addition to a lease agreement of $3 million per year over 50 years with the city of San Jose. Aiming to use it for its own executives, the private terminal is also made available to other business jets that land in San Jose's airport.

According to statement's released by the city, the deal will see the creation of 370 jobs as well as near $300,000 in tax per year, in addition to the annual lease cost. Benefits for Google's founders are also clear, whereas most Fortune 100 executives operate a corporate air department in some fashion, operating your own airport near your base of operation is a luxury that few billionaires around the world can ever get, regardless of the cost.

Featuring hangar space in addition to the private jet terminal, the new location at San Jose's airport is set to become the new hub of operations for Google's private jet fleet. One of the largest, single-client corporate air facilities in the world, Google's private terminal will be sitting next to a hangar operated by Hewlett Packard's corporate fleet.

Whilst Google's initial ownership of a private Boeing caused an uproar in the mainstream press in 2007, the company's stellar performance under the leadership of its founders made sure a private airport, let alone a corporate fleet, didn't raise any eyebrows. General Electric, on the other hand, had to switch CEOs following bad performance and issues with the management of their corporate fleet.

Founded by Larry Page and Sergey Brin in 1998 as a search engine based on measuring inbound links, Google became one of the fastest growing companies in the world. After failing to sell to Google for $1 million, the pair built out the company to a market cap of $750 billion.

Now bringing together a whole holding of companies active in search as well as in other tech spaces, such as Nest, their smart thermometers, Google remains the vast majority of Alphabet Inc's revenue generation. Its moonshots are, however, designed to go all or nothing in this race to scale.