NetJets/Cessna

[DadofSeven]

Latest rumor here at the schoolhouse in MCO is that NJ is going to make an annoucement within two weeks about bringing most of their furloughed guys back by the end of the year, and some kind of deal with Cessna. RIP CitationAir. Anybody else hear this?

 

[imacdog]

No kidding, a rumor is floating around? Holy crap!

 

[cldsfr79]

Havent heard that rumor, but I almost laughed when I read it. In order for NJ to bring back furloughed pilots, they have to first increase the amount of planes they have, which hasnt happened since early 2008.
And if the rumor is eluding to buying citation air and then furloughing all their pilots and replace them with NJ pilots, doesn't make economic sense. Just like US Airways and America West, I'm sure they would keep seniority list in a hybrid separate state.

 

[CALRepublic]

WOW i've heard rumors before, but this one takes the cake...

Someone came up with the idea that NJA is gonna buy CA, furlough their pilots and recall ours. This is the Netjets-Flexjet merger thing all over again

 

[BoilerUP]

CitationAir is getting out of the frax business to become a charter/management company...no doubt where this rumor came from.

But a rumor from a schoolhouse? Unpossible!

 

[mtnrunner]

Eyes on the prize...

Always start with the big picture and work the scenarios from there.
Think presentation of core financial statements: Balance Sheet, P&L, Cash-Flows, and Statement of Equity.

If Textron and NJ can find creative ways to benefit one another they will. If they can't, they won't. Keep your eyes on the prize: number of new planes manufactured and sold by Cessna (or quality of future earnings), and net new aircraft at NJ (or quality of future earnings). If I dispose of two airplanes but only take one new airplane that's not so good, but can look good from the outside looking in.

The critical factor in the value of an enterprise is the quality of future earrings. My guess is both want something that allows for creative accounting but neither is willing to lay cash on the table. Why? Neither company has any cash or a lot of free cash-flows.

Watch closely and track the real math. The rest is just PR. There is no doubt that DS did a lot of damage to confidence in the fractional model. It was always a fragile model, but a manageable model nonetheless.

Textron needs to fix somethings to maximize shareholder value and NetJets just needs to do - something...

http://www.bloomberg.com/news/2012-...rt-of-review-that-may-include-spinoff-1-.html

"Textron Gains Amid Report of Review That May Include Spinoff"

 

[imacdog]

Always start with the big picture and work the scenarios from there.
Think presentation of core financial statements: Balance Sheet, P&L, Cash-Flows, and Statement of Equity.

If Textron and NJ can find creative ways to benefit one another they will. If they can't, they won't. Keep your eyes on the prize: number of new planes manufactured and sold by Cessna (or quality of future earnings), and net new aircraft at NJ (or quality of future earnings). If I dispose of two airplanes but only take one new airplane that's not so good, but can look good from the outside looking in.

The critical factor in the value of an enterprise is the quality of future earrings. My guess is both want something that allows for creative accounting but neither is willing to lay cash on the table. Why? Neither company has any cash or a lot of free cash-flows.

Watch closely and track the real math. The rest is just PR. There is no doubt that DS did a lot of damage to confidence in the fractional model. It was always a fragile model, but a manageable model nonetheless.

Textron needs to fix somethings to maximize shareholder value and NetJets just needs to do - something...

http://www.bloomberg.com/news/2012-...rt-of-review-that-may-include-spinoff-1-.html

"Textron Gains Amid Report of Review That May Include Spinoff"

One can always check them under the scope for the Conflict-Free engraving. (I keed, I keed) :beer:

 

[DadofSeven]

Well lets look at this way. CA owns nothing. So there is nothing for NJ to buy. CA has never made money from day one. They have been nothing but a red ink blot for Cessna. NJ makes deal with Cessna to buy planes, and Cessna gives NJ current contracts from CA. Now Cessna sells new planes and makes money on said new planes and gets rid of money losing CA to NJ. NJ gets contracts at no cost other then placing plane order, recalls any pilots if needed. All CA has is excel's, X's and sovereign's all planes that NJ has already. Ok, CA has CJ3's that would be the only type NJ doesn't have. Fire the CA guys hire the NJ guys. Sound like a management move to me. Everybody wins but the CA guys. They don't even get stapled cause they weren't bought. The company is dismantled and off to un-employment they go. Thats what I would do if I was Cessna. Also, I would tell the ibt1108 negotiate that b*^%$ch!

 

[gunfyter]

Not something I would do to people that worked for me... I guess thats why I'll never be in management....

 

[wacoflyr]

Not something I would do to people that worked for me... I guess thats why I'll never be in management....

I am right there with you. Us working stiffs don't make as much, and live in our standard housing, eat our standard meals, and can go to sleep knowing that we didn't f!ck any one today. If that is the trade off, then it appears that we have made our decision. I am comfortable with mine. It is tough to have a conscience, but it is also necessary if you are to hold your head up among those you admire.

Some of these guys, you wonder how they sleep at night. Remember the scene in Braveheart where that laird guy wakes up to find Wallace on a horse over him with a mace? That could happen.

 

[jonjuan]

Not something I would do to people that worked for me... I guess thats why I'll never be in management....

What would you do if you had a business that apparently appears to be bleeding you dry year in and year out? Are they shutting down completely or shrinking? Fractionals haven't made any money except for a couple of years during the glory days of wall street euphoria. That (and you know who in the white house) is over.

 

[NJAowner]

CS assigns owner management contracts to NJ in exchange for future sales. CS gets rid of the liability. NJ picks up capacity. Except as noted in the CJ3 fleet, NJ probbaly already has existing capacity in its fleets (used inventory) such that it does not need to bring on any new planes now (I do note that CS marketed the XLS as a 9 pax), and maybe will bring back a few pilots. For now, this is the only way I see it going down.

 

[BentOver]

Not sure I missed it or not Owner....Do you think that Cessna would do this move WITHOUT an actual purchase of new a/c from Netjets?

I was under the assumption (if this rumor has any merit) that a couple billion dollar order would be what Cessna wants, and owners is what NJA wants....

Also, as far as owner contracts go, would Cessna be allowed to just transfer owners to NJA? I am thinking that there would be a large push by Netjet sales team to get those owners. But I didn't think they would just be handed over unless the owners allowed it to happen?

 

[gunfyter]

JJ ... I wouldn't give any contracts to NJ ... I would keep the ones I have ... perhaps not sell any more money losing contracts. Apologize for management incompetence ... Let the employees know we will be shrinking slowly to non existence because we are too dumb to make money flying other people's airplanes. Give some sort of timeframe for people to make plans.

The only way I would give contracts to NJ is if they took pilots with the contracts.

 

[NJAowner]

I have not seen the CA contracts, but I donot think it would be difficult to have NJA "manage" them (even without CA owner approval). And yes -- tied to the purchase of new planes.

 

[RCR5]

YEAH, how bout that union vote now?

Obama has NOT helped the economy and the unemployment/deficit numbers prove it. The union didn't help CA and the unemployed CA pilots will soon prove that. Great job folks. You got it all correct (tongue in cheek). You have ruined a great company.

 

[imacdog]

What would you expect a union to do? Guess what, your management would have done this without the union vote as well.

 

[Humphreybogart]

I'm thinking it's not as dire as what everybody here is making it out to be.

 

[rbav8r]

Time to polish up the resume.

 

[gunfyter]

I'm thinking it's not as dire as what everybody here is making it out to be.

Best of Luck ....