NetJets 2nd Qtr Earnings

[gret]

For the second quarter and first half of 2010, NetJets’ revenues increased 16% and 17%, respectively, over 2009 which was primarily attributable to an increase in worldwide flight revenue hours, partially offset by lower management fees due to fewer aircraft in the NetJets program. NetJets generated pre-tax earnings of $114 million in the first six months of 2010 compared to a pre-tax loss of $349 million in 2009, which included $255 million of asset writedowns and other downsizing costs. Such costs in the first half of 2010 were relatively minor. On January 1, 2010, Berkshire began charging NetJets a guarantee fee related to the level of its outstanding commercial paper and other borrowings. For the first six months of 2010, the guarantee fee was $18.7 million and was charged against NetJets’ earnings. A corresponding credit was included as a component of "Other" earnings in the table on page 22. Had a similar fee been charged in 2009, NetJets’ pre-tax loss of $349 million would have increased by $38.2 million. The improvement in earnings was attributed to the increase in revenues and to an overall reduction in flight operations and administrative costs, partially offset by higher fuel costs. NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose selected aircraft over time. NetJets’ operating cost structure has been reduced to better match customer demand, and we believe that NetJets will continue to operate profitably in the future.

 

[doh]

All good news is welcome on our side of the airport!

 

[fischman]

Up is good. More up is more good. We need some more quarters like this so we can get our 495 back to work.

 

[CRJFlyer]

I hope so, but unfortunately all I can predict is BKH gaining that few extra $50million per year by not having us back anytime soon.

The sooner they have to train, pay, benefit us..the sooner that will cut into the quarterly earnings report.

Squeezing as much juice out of the turnip as possible is the way it may be for awhile...Unless alot of the "go getters" stop bending over backwards everytime the BB goes off...Not saying there are alot of them, but there are plenty of them out there.

 

[fischman]

I hope so, but unfortunately all I can predict is BKH gaining that few extra $50million per year by not having us back anytime soon.

The sooner they have to train, pay, benefit us..the sooner that will cut into the quarterly earnings report.

Squeezing as much juice out of the turnip as possible is the way it may be for awhile...Unless alot of the "go getters" stop bending over backwards everytime the BB goes off...Not saying there are alot of them, but there are plenty of them out there.

I agree with you till a point. When the service starts getting effected, and owners start complaining recalls will occur.

From what I've been witnessing on the road, I'm hoping it will be sooner rather than later.

 

[gunfyter]

I think if this economy would decide which way it wants to go ... that would solve the issue. You know they don't want to recall only to furlough again.

 

[imacdog]

I agree with you till a point. When the service starts getting effected, and owners start complaining recalls will occur.

From what I've been witnessing on the road, I'm hoping it will be sooner rather than later.

The service has already been affected.

 

[fischman]

The service has already been affected.

Service gets positively and negatively effected every day. Our (pilot) owner satisfaction numbers are still impressively high. If you're referring to "food tools" and the brand of water we serve, that is nothing an owner is going to leave the program for.

 

[imacdog]

No, I talk to owners and associates of owners on a somewhat-regular basis at my current job. Just passing on what's been told to me. Besides, an owner's experience isn't soley based on the pilots. Don't drown in the kool-aid, Fisch.

 

[captjim]

Glad to hear of the profit guys, hopefully there will be no more furloughs and hopefully some recalls. Congratulations guys, I hope this continues!

 

[rajflyboy]

No, I talk to owners and associates of owners on a somewhat-regular basis at my current job. Just passing on what's been told to me. Besides, an owner's experience isn't soley based on the pilots. Don't drown in the kool-aid, Fisch.

Bingo

 

[wolfpackpilot]

NetJets will continue to run a lean, more trim operation for the foreseeable future. Every employee in the company is beginning to see the new sheriff expects the bee's to work harder and more productively than before. And that is not going to change... nor should it.

As for pilots, if it's a legal assignment... its legal. We make the call if it is safe or not, and take the consequences that go with that.

just my .02
Wolf

 

[rajflyboy]

NetJets will continue to run a lean, more trim operation for the foreseeable future. Every employee in the company is beginning to see the new sheriff expects the bee's to work harder and more productively than before. And that is not going to change... nor should it.

As for pilots, if it's a legal assignment... its legal. We make the call if it is safe or not, and take the consequences that go with that.

just my .02
Wolf

Is flying a pilot home on a Citation X to avoid an after midnight considered running a lean operation? Don't forget about the ferry the x has to do to reposition for the next owner flight.

Save 2000 bucks but spend 5000 bucks or more? Comical.

 

[wolfpackpilot]

Is flying a pilot home on a Citation X to avoid an after midnight considered running a lean operation?

Bwahaa.... Uh, No.


Hopefully the pilot changed clothes into some really cool jeans and shirt and called every person he knew in town and had them come out to the airport to see his new personal jet he just bought with the Mega-Millions jackpot he just won.

imp: Dats right!

 

[Geronimo4497]

NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose selected aircraft over time.

Do you guys really see recalls happening with statements like this? Not trying to be a jerk; just trying to look at things realistically. :erm:

 

[DAS at 10/250]

Do you guys really see recalls happening with statements like this? Not trying to be a jerk; just trying to look at things realistically. :erm:

I don't. I still think recalls are a LONG ways off (years). I be happy to be wrong though.

 

[gret]

Nobody seems to know, but how many a/c do they need to sell to rationalize the fleet? In an interview two months ago (see below), they said they didn't have any excess, other reports say it is 10% of the fleet, and still other reports say 200 a/c.

Until this is done and they positon themselves to acquire new a/c to new customers, how is it possible to increase employment in any area?

"Despite speculation that NetJets is holding a high number of non-flying airplanes, less than 5 percent of the overall fleet is available for sale, AIN was told, “which is in keeping with its historic amounts.” AIN Alerts May 13, 2010
​

Also, this toxic missile showed up on another blog yesterday-

Sat, 08/07/2010 - 10:15 — Anonymous (not verified)
2nd Qtr

Spoke to a good person in finance who is looking to leave NetJets. I've known this person for a while. They wouldn't go in to any detail but said - the 2nd Qtr numbers are legal but bogus. Unsustainable. They also said the finance and analysis group has lost all confidence in DS and their CFO because - they are digging a hole.

NetJets has been a family for decades. Loyalty is rare but not uncommon for those who have been around. Most remain loyal to NetJets but don't care for DS.

Fly safe!

http://aliceschroeder.com/blog/sympathy-sokol
​

 

[fischman]

No, I talk to owners and associates of owners on a somewhat-regular basis at my current job. Just passing on what's been told to me. Besides, an owner's experience isn't soley based on the pilots. Don't drown in the kool-aid, Fisch.

The survey results from the owners don't reflect this statement, but I'd hate to let facts get in your way... Please, lets hear more gloom and doom about how NetJets is going to close doors tomorrow.:nuts:

 

[RP170]

I don't. I still think recalls are a LONG ways off (years). I be happy to be wrong though.

Ditto. Still not drinking the Kool Aid. I think best case will be the dates they approximated in the furlough letters. Maybe a small number before that but nothing significant.

 

[gunfyter]

Well if there is no recall ... I like to see how they get through the winter.... Usually there is more flying. And more delays for traffic, wx, de-ice .... It will be miserable.

I guess they can always selloff and just recall whatever the cba requires in the spring.