Netjets - Say Hello To Your First Global

[johnsonrod]

I suspect the Gulfstream pilots at Netjets won't be so thrilled to hear this (or maybe the pilots flying the older GIVSPs will?). You tell me. Personally, I would have rather seen you guys buy the G650 at the higher end but I am sure Bombardier offered Sokol a GREAT price for the Globals. I'd be curious to hear what the Gulfstream-loving passengers/owners think about the upcoming Globals - do they care or not care?

Will the older GIVSPs go first and be swapped out one-for-one? Anyone know (or guess) how the fleets will be switched? Will Netjets Europe also replace their current G550s with Globals from this order?


See the news from AINOnline below:



Bombardier Aerospace and NetJets celebrated the rollout of the fractional provider’s first Global-series jet today, in this case a Global 6000 (neé XRS). Last March, NetJets placed an order for 50 Globals worth $2.8 billion, as well as options for an additional 70, breaking the fractional provider’s tradition of buying only Gulfstreams for its large-cabin jet fleets. Executives from NetJets and Bombardier, as well as 1,000 Bombardier employees, were on hand for this morning’s ceremony at the Canadian aircraft manufacturer’s plant in Toronto. After the event, the green aircraft was ferried to Bombardier’s Global completion center in Dorval, Quebec, for outfitting. NetJets’ Global 6000s, to be configured for up to 13 passengers, will feature an aft-cabin state room and full-service galley. Donald Strench, vice president of fleet planning and acquisitions at NetJets, said the Global series “is ideally suited to our owners’ needs for safety, extended range, superior reliability, cabin comfort and operating efficiency.” NetJets’ firm order includes 30 ultra-long-range Global 5000s and 6000s, with deliveries scheduled to begin in the fourth quarter. It also includes firm orders for 20 extended-range Global 7000s and 8000s, for delivery starting in 2017.

 

[Club ORD FO]

So how does this work. An owner in an old depreciated G5 is going to be asked to renew into a brand new expensive Global? Are that many going to want to throw down that kind of cash? I guess I'm wondering what you guys are going to do with all those big planes, since our people are telling us that there is no market for new owners.

 

[SCT]

How many Gs does NetJets own?

Also, 2.8 billion for 50 planes works out to be 56 million a piece for the Globals???

 

[jonjuan]

So how does this work. An owner in an old depreciated G5 is going to be asked to renew into a brand new expensive Global? Are that many going to want to throw down that kind of cash? I guess I'm wondering what you guys are going to do with all those big planes, since our people are telling us that there is no market for new owners.

winner, winner, meatloaf with sweet potato dinner....only the biggest of suckers will pony up multi-millions for an aircraft share they will most likely rarely see.

 

[jonjuan]

How many Gs does NetJets own?

Also, 2.8 billion for 50 planes works out to be 56 million a piece for the Globals???

Quoting list prices is simply a marketing ploy. Kinda like using safety as a way to lure in prospects.

 

[cldsfr79]

winner, winner, meatloaf with sweet potato dinner....only the biggest of suckers will pony up multi-millions for an aircraft share they will most likely rarely see.

I agree. But then again, someone will buy a high end Mercedes and drive it off the lot brand new, and then a few years later, sell it and buy another new one.

NJA also has a lease program. Just like a car, at the end of a lease you can turn around and sign a new one with a brand spanking new plane. NJA would make more money leasing the plane over and over rather than selling out right shares.

I always thought NJA should also have charter service and then have three tiers of service (ownership, card holders, and charter) and use its core fleet for this. We would be the largest charter company on Earth. Oh wait, what am I thinking, they have EJM and it's eating NJ alive! Funny how NJ pilots are being threatened with more furloughs and EJM is hiring. Hmmm......

 

[jonjuan]

I agree. But then again, someone will buy a high end Mercedes and drive it off the lot brand new, and then a few years later, sell it and buy another new one.

Now imagine that same high-end new Mercedes buyer was now driving a 5 year old car every day. How do you think they would feel?

 

[NJAowner]

Now imagine that same high-end new Mercedes buyer was now driving a 5 year old car every day. How do you think they would feel?

If this was you at NJ, a 5 year old GIV/450 would be "new". Isn't most of the fleet much older?

 

[BentOver]

Hopefully the fact will still remain that NJA is going to be taking delivery of its first new airframe in nearly 3-4 years. (Once the keys are firmly in hand)

And even though many in the Union, (one attempted recalled Pres.) thinks that the order is not going to happen. NJA is putting up quite a show for a/c they aren't going to take delivery of.


I've always enjoyed the Bombardier products. Never flew a GIV/V but know they are nice. Hopefully they sell well and more deliveries will commence, starting a long overdue turnaround.... Ok that's stretching it a bit.

 

[jonjuan]

If this was you at NJ, a 5 year old GIV/450 would be "new". Isn't most of the fleet much older?

Then just buy a 5 year old GIV/450-much cheaper.

 

[NJAowner]

JJ - I agree with you.

 

[Outta Here]

I guess many here don't understand. The name of the game here is depreciation. That is on of the MAIN reasons for fractionals. That is something we don't have right now you can't depreciate a used or leased share. They will still be able to sell their old depreciated one at market value and get into the new ride and trust me they always want a new ride

 

[gret]

I guess many here don't understand. The name of the game here is depreciation. That is on of the MAIN reasons for fractionals. That is something we don't have right now you can't depreciate a used or leased share. They will still be able to sell their old depreciated one at market value and get into the new ride and trust me they always want a new ride

You can depreciate a used or leased share. Section 167 of the Internal Revenue Code provides that if the asset (other than land or intangible assets) is used in a trade or business, it is subject to depreciation for tax purposes. Personal use assets may not be depreciated.

The leased share is depreciated if it is deemed a capital lease. If not, it is an operating lease in which case you write off the lease payments as they are made. In either case, it must be used in a trade or business.

 

[rajflyboy]

Gret is awful smart. You have your facts straight.

 

[BentOver]

There will always be those who just have to have the newest, biggest, fastest, shiniest...........


Just gotta hope there are enough of them on Wall Street to buy into NJA

 

[gunfyter]

JJ - I agree with you.

:nuts: I just threw up a little in my mouth uke:

:laugh:

 

[johnsonrod]

Now for the more "touchy" question: will all of the current Gulfstream drivers automatically jump to the Globals on a one-for-one basis as airplanes arrive? What about the senior legacy NJA pilots - can they bid the new aircraft type per their seniority? As a legacy NJI pilot, do you automatically get a seat on the Global? How does that work? Obviously I don't know the contents of your latest contract - especially NJI integration issues.

Not trying to stir the pot - just curious considering the NJI pilots were separate from the original NJA union... Personally, if I were a senior Citation X pilot, I would want a crack at the new Globals before a junior Gulfstream pilot with fewer years on the line (especially because it is a new aircraft type requiring new training, etc.) - but that's just me.

Thanks for any OBJECTIVE insight if possible.

 

[Jack Campbell]

I've had the same questions as JR since they announced the Global purchase. Will a G-IV captain hired in, let's say, 2004 get a displacement bid into a Global? I say he should not be eligible, but the company is allowed to offer it to him. If NJ is going to maintain a seniority-based system, those guys should be able to bid what their seniority holds. Yet another thing that'll be really interesting to watch at my former (and future?) employer over the next 2 years.

 

[johnsonrod]

If Netjets were keeping the Gulfsteams long term - say the G450/550 and maybe some new G650s, I could understand the rationale for keeping the Gulfstream pilots in place given their type ratings and international flying experience, etc. Given that the Globals are new and require different training (new type), does that argument hold true? I know one Netjets Sovereign pilot who flew C-17s and C-141s worldwide and would have no problem flying Globals internationally.

Is Netjets contractually obligated now (per the contract and integration formula) to reposition current Gulfstream pilots into the Globals as they arrive? How will that work?

 

[BentOver]

I think I remember something about the Globals going to bid just like every other a/c....As far as displacement bids, IF there were to be a displacement out of the Gulfstreams, those pilots can bid whatever is available. Much like what is going to probably occur with pilots in the Beechjet, Hawkers, Ultra's etc... There should be a lot of plane switching in the next couple years.....Plus there are still the Phenoms coming up, and also whatever Mid-Size announcements are made. (My bet is the CL-300 and new Citation TEN)

But as far as I know there is no special bid awards given to Gulfstream pilots for being with the former NJI.

On top of that, many many non-NJI pilots have loads of international experience. Many many furloughed pilots have loads of international experience. The fact that NJI pilots have the traditional monopoly on the "INTERNATIONAL" moniker should make zero difference who gets awarded a Global position.

Many NJA pilots "could have" bid over to the Gulfstreams throughout the years. Many have never done it or wanted to simply for the length of legs etc.... Heck, there are Ultra pilots who could be in the X or Falcon etc, who haven't done it simply on what they want out of their week on.