Netjets Announces Aircraft Order

[t-bone]

Respectively:

There is a huge difference internally from XOJet, other "branded" providers, and NJA. There are many alternatives out there some charter companies charge the same price for a GV that NJA charges for a Sovereign. Price in aviation should be taken with a grain of salt.

Not saying that XOJet or other "branded" flyers are not safe, but are they converting their pilot training to part 121 (airline standards), do they have an Aviation Safety Action Program (ASAP) that allows pilots and workers to write up safety concern that is reviewed by the FAA and company so changes and training can take place, do "branded" flyers have FAA award winning maintenance programs, do charter companies and other fractionals have a half dozen FAA inspectors permanently on site to review every move we make (just like the airlines...you would be lucky if an FAA inspector showed up once in a while to a charter company to review what they really do), and do they have work rules in place that protect a pilots rest and duty periods? These are just a few safety items that seperate us from the "brands".

Can you get that branded plane when you need it? Can you upsize and downsize? Can you go where you want when you want? Are you sure those charter pilots are both properly typed in the aircraft? Are they flying a broken plane that should be grounded and are doing so to jeopardize your safety to collect your money. At NJA we value your safety, ground the plane, and historically, within 60 minutes, you're on your way again on a new tail. Can "branded" flying do this?

Yes XOJet is cheaper, but as stated, they can tell you if they are or are not going to take a flight. They also tell you what airport is better to go to that is more convenient to the company. Are they cheaper because they are taking high time worn out NJA sold aircraft (their Hawker 800s and some Xs), strapping new engines on them and pushing them hard...you bet.

Charter companies at time can be compared to the old ValuJet airlines. They take old planes, strap on new engines, charge under cutting prices, place some duck tape here and there to keep moving, push their pilots beyond exhaustion (or they could be fired for not taking a flight), and from the outside all looks until something happens. And the news is full of "something happening".

You can compare, air taxi, charter, and private accident rates and then compare them to fractional flying. There is a difference.

Safe flying.

I'm not going to sit here and respond to every point you've made. But I will tell you that YES we do have an ASAP program in place for almost 2 years now, and YES our AQP training program is in development with the FAA and CAE. Do we have FAA inspectors on sight? No, but our FSDO is 10 miles away so I'm pretty sure our POI will show up when ever he desires. And yes we are flying some of your old airplanes. Are you saying they are unsafe to fly? If so, how many of those tired worn out planes are still in your fleet, carrying your passengers? The truth is those airplanes are in much better condition now than when we found them (meaning inspections are now up to date that hadn't been complied with by their previous owners) so don't come on here and tell everyone that NJA is a safer operation because of X Y and Z. Apparently having FAA on sight doesn't guarantee much...

Will you be able to promise that 60 minute recovery time once your fleet has shrunk to the levels management wants? Unless we have another airplane sitting next to us on the ramp, we'll never recover that quickly. But when everything is running smoothly, that means we don't have too many extra airplanes sitting around, idle.

 

[cldsfr79]

I know everyone in the industy would like to believe all of this, but you are generalizing too much and incorrect with your assumptions. Regarding the accident statistics, they don't hold water for the aircraft we are talking about and AIN just had a piece on this.

A high percentage of the aircraft in charter fleets today are owned by mgmt clients who include many large public and private companies and high net worth individuals. Exceptions do occur, but not to the extent that one is led to believe. Hard to make the argument about equipment when the largest frax provider is flying a lot of aircraft over 10 years old and hours coming out the wazzoo...

Regardless of who is right or wrong, the customer base eye's glaze over when you start trying to explain Part 121 training and they focus on what they understand and that is price, appearance of the a/c, and whether the crewmembers exercise personal hygiene.

NJOwner has been around the block many times and knows what he is talking about.

Well, there are companies that do the bare minimal and have very little over sight from the feds and there are companies that spending millions of dollars on safety.

In regards to safety and price shopping, chartering vs. fractional: There are well over 6000+ private jets in the country, fractionals together make up around 10% and management numbers are less (EJM which is the largest just has over 100 tails or so), the rest are part 91 and 135 ops. Tell me that I am wrong about safety between the fracs and straight 135. Why is it I have talked to guys who had the ethics to walk off a job because they refused to fly a broke plane for charter companies. Why is it that in Aspen during a snow storm, NJA grounds its planes while a charter company with the same type of plane launch? Why is it that you read story after story of 135 operators getting busted for certificate violations or try to fly under 134 1/2 regs? Not every place is a dirt back operator, there are a lot of professional places. I'm just saying that with NJA, you pay the price to fly with us, but you get what you paid for...safety, reliability, professionalism, commitment, law-abiding, customer care......

Does NJA have planes over 10+ years old? Yes. The difference between us and charter is that our once again "award winning mechanic and maintenance program", awarded by the FAA is what takes care of our planes. And when we are not doing our own mx, the planes are flown into OEM facility. And those Feds I referred to that hang out at our headquarters, go through the mx manuals and look over repairs. Does a charter place have this type of accountability? We don't leave are mx to "Bob's aircraft mx facility", we pay extra money to make sure everything is done right.

I really hope millionaires are a lot smarter when it comes to a large asset purchase or expenditures. That they look at quality of the whole package instead of price and if the plane looks shinny or not.

 

[t-bone]

Well, there are companies that do the bare minimal and have very little over sight from the feds and there are companies that spending millions of dollars on safety.

In regards to safety and price shopping, chartering vs. fractional: There are well over 6000+ private jets in the country, fractionals together make up around 10% and management numbers are less (EJM which is the largest just has over 100 tails or so), the rest are part 91 and 135 ops. Tell me that I am wrong about safety between the fracs and straight 135. Why is it I have talked to guys who had the ethics to walk off a job because they refused to fly a broke plane for charter companies. Why is it that in Aspen during a snow storm, NJA grounds its planes while a charter company with the same type of plane launch? Why is it that you read story after story of 135 operators getting busted for certificate violations or try to fly under 134 1/2 regs? Not every place is a dirt back operator, there are a lot of professional places. I'm just saying that with NJA, you pay the price to fly with us, but you get what you paid for...safety, reliability, professionalism, commitment, law-abiding, customer care......

Does NJA have planes over 10+ years old? Yes. The difference between us and charter is that our once again "award winning mechanic and maintenance program", awarded by the FAA is what takes care of our planes. And when we are not doing our own mx, the planes are flown into OEM facility. And those Feds I referred to that hang out at our headquarters, go through the mx manuals and look over repairs. Does a charter place have this type of accountability? We don't leave are mx to "Bob's aircraft mx facility", we pay extra money to make sure everything is done right.

I really hope millionaires are a lot smarter when it comes to a large asset purchase or expenditures. That they look at quality of the whole package instead of price and if the plane looks shinny or not.

If you are going to make generalized assumptions about an industry, then don't reference a specific company by name 3 times and talk about their specific business doings. Yes, there are some shady operators out there. But I've been sitting in the Aspen crew lounge along side NJA, Citation Air and FLOPS crews due to 20 knot winds out of the south, unable to depart, watching other operators take off on 15. So don't lump us into your accusations of unsafe practices when you simply don't know what you are talking about.

 

[X-rated]

Common man.

Everyone knows there are plenty of pt 134.5 mom and pops that give the industry a bad name, but you inferred XOJET by name was one of them. That's just not accurate even though you would like to believe it so.

 

[jetlag7]

The truth is those airplanes are in much better condition now than when we found them (meaning inspections are now up to date that hadn't been complied with by their previous owners) so don't come on here and tell everyone that NJA is a safer operation because of X Y and Z. Apparently having FAA on sight doesn't guarantee much...

The truth is, every one of those planes were up to date and fully air-worthy when we were still operating them. I've worked for many different operators in my career (corporate, charter, airline, fractional) and have never witnessed a company match the enormity of resources NJ devotes to aircraft maintenance and care.

I know what you are attempting to imply with your very misleading statement, but the truth is, those aircraft sat for quite some time and passed through the custody of several other organizations prior to landing at your doorstep. It's not surprising some were a little "under the weather" and had lapsed on a few inspections.

 

[t-bone]

The truth is, every one of those planes were up to date and fully air-worthy when we were still operating them. I've worked for many different operators in my career (corporate, charter, airline, fractional) and have never witnessed a company match the enormity of resources NJ devotes to aircraft maintenance and care.

I know what you are attempting to imply with your very misleading statement, but the truth is, those aircraft sat for quite some time and passed through the custody of several other organizations prior to landing at your doorstep. It's not surprising some were a little "under the weather" and had lapsed on a few inspections.

You're right, I don't know how many times ownership had changed by the time we got them, and that's why i didn't mention a company by name. Regardless of who let them fall into their un-airworthy status, we took care of them and brought them up to speed and they are now in better condition than when we found them. That's my point. They may be old, but they are working out very well for us in our system.

And if I could edit out my comment about having FAA on sight, I would. That wasn't productive.

 

[gret]

Well, there are companies that do the bare minimal and have very little over sight from the feds and there are companies that spending millions of dollars on safety.

In regards to safety and price shopping, chartering vs. fractional: There are well over 6000+ private jets in the country, fractionals together make up around 10% and management numbers are less (EJM which is the largest just has over 100 tails or so), the rest are part 91 and 135 ops. Tell me that I am wrong about safety between the fracs and straight 135. Why is it I have talked to guys who had the ethics to walk off a job because they refused to fly a broke plane for charter companies. Why is it that in Aspen during a snow storm, NJA grounds its planes while a charter company with the same type of plane launch? Why is it that you read story after story of 135 operators getting busted for certificate violations or try to fly under 134 1/2 regs? Not every place is a dirt back operator, there are a lot of professional places. I'm just saying that with NJA, you pay the price to fly with us, but you get what you paid for...safety, reliability, professionalism, commitment, law-abiding, customer care......

Does NJA have planes over 10+ years old? Yes. The difference between us and charter is that our once again "award winning mechanic and maintenance program", awarded by the FAA is what takes care of our planes. And when we are not doing our own mx, the planes are flown into OEM facility. And those Feds I referred to that hang out at our headquarters, go through the mx manuals and look over repairs. Does a charter place have this type of accountability? We don't leave are mx to "Bob's aircraft mx facility", we pay extra money to make sure everything is done right.

I really hope millionaires are a lot smarter when it comes to a large asset purchase or expenditures. That they look at quality of the whole package instead of price and if the plane looks shinny or not.

Can't help you...believe what you want, but you are sorely misinformed about the vast majority of operators out there.

Jet Aviation, FirstFlight, Executive Fliteways, Fairwinds, and many others have very professional operations and were around long before any of the fractionals. They fly much newer aircraft than NJ’s and employ crewmembers possessing hours far in excess of yours. Metlife, Prudential, JP Morgan Chase, Merrill Lynch, Harrison Ford, Credit Suisse, Ernie Els, American Home Products, USAIG, Lehman Brothers, Lefrac, CIT, Fisher Bros., Michael Dell, Apollo Group, TPG, W.W. Grainger Inc, Ernst & Young, etc. etc. have, or had, their aircraft managed by these firms and many of them were on Part 135 and available for charter.

You should remember that you are count on these firms to fly your passengers on many occasions. In fact, they have saved NJ’s butt on many occasions.

If there are so bad, why use them? The answer is that in many cases you don’t because NJ buys lift solely based on price and in many cases go to those operators the firms mentioned above wouldn’t touch on a bet for a brokered charter.

 

[G4dude]

The economy will eventually recover but I would not expect fractional as an industry to ever be as large as it was in 2007. Fractional will always be around but its popularity probably peaked in 2007. Fractional ownership was and is a great idea. Fractional will not reach its prior peak not because it is bad but because someone is always “trying to build a better mousetrap”. For the most part NJA “built a better mousetrap” than traditional charter and grew the market for charter. Instead of running a capital intensive charter operation relying upon company owned planes, NJA got the “charter” customers to buy a piece of the plane and pay the fixed regardless of whether the owner actually used the plane. Great idea. Fractional ownership for NJA also eliminated the need and inconsistency of using managed planes on a charter certificate where the planes are all different types, ages and layouts, with differing degrees of safety and maintenance.

Fractional ownership for NJA seized upon the highly fragment and varied charter market. There was no “brand”, no reliability, no standardization, and a lack of confidence by customers and a lack of knowledge by customers. NJA created an industry and a brand which people who never chartered or who weren’t extremely happy with charter operations gained knowledge and became knowledgeable and comfortable with flying privately. It could have been done by buying many airplanes and running a standardized charter fleet but that was prohibitively expensive. So then came the brainstorm to have the customers be responsible for the acquisition and upkeep of the jets. For many years a potential owner had to wait many months to take delivery of his share. Absolutely brilliant. However, somewhere along the line as it became apparent that $$$ could be made buy buying the planes at wholesale prices and selling them in pieces at retail prices that NJA started to have inventory issues. Too many planes. Unfortunately, we know the rest of the story, and some of you know it all too well.

However, the market changed, and better mousetraps keep evolving. After many incarnations, XOJet has seized upon the idea of true “branded” charter, with all the attributes of a brand name. Others are going there as well. Many customers, such as myself, have reduced their shares and now use both fractional and “branded” charter. The advantage of fractional is I am guaranteed a plane when and where I need it. But actually, while it sounds good, I only need this guarantee for a few peak days of the year and some very irregular flights. When I have flexibility or time, I price out XOJet first – if the flight is less expensive than using my fractional share I fly XOJet. Quite frankly for most flights over approximately 2.5 hours XOJet is usually much less expensive. Branded charter can be less expensive (more efficient) because it has the ability to change prices or refuse flights for flights which are less desirable for it to fly (XOJet prices a 1.2 hour flight ridiculously expensive so it either gets a lot of $$$ for the flight or doesn’t fly it). Fractional does not have this ability. If the rental car business went fractional, Hertz would have to guarantee me a car when and where I needed it – it would need many more cars to serve all the owners – instead of just being able to say “sorry – all sold out that day”. Therefore, while “owners” may move a portion of their flights to branded charter (allowing these companies to “cherry pick” the most profitable flights of a fractional operator, while leaving the fractional provider with the very unprofitable Sandusky, Ohio to Ithaca, NY flight.

Fractional is here to stay. But I believe many flyers will have smaller fractions than they had in the past.

Hmmm. EJM could be in a very nice position, if you are correct, which I suspect you are.

 

[nordo_2]

The economy will eventually recover but I would not expect fractional as an industry to ever be as large as it was in 2007. Fractional will always be around but its popularity probably peaked in 2007. Fractional ownership was and is a great idea. Fractional will not reach its prior peak not because it is bad but because someone is always “trying to build a better mousetrap”. For the most part NJA “built a better mousetrap” than traditional charter and grew the market for charter. Instead of running a capital intensive charter operation relying upon company owned planes, NJA got the “charter” customers to buy a piece of the plane and pay the fixed regardless of whether the owner actually used the plane. Great idea. Fractional ownership for NJA also eliminated the need and inconsistency of using managed planes on a charter certificate where the planes are all different types, ages and layouts, with differing degrees of safety and maintenance.

Fractional ownership for NJA seized upon the highly fragment and varied charter market. There was no “brand”, no reliability, no standardization, and a lack of confidence by customers and a lack of knowledge by customers. NJA created an industry and a brand which people who never chartered or who weren’t extremely happy with charter operations gained knowledge and became knowledgeable and comfortable with flying privately. It could have been done by buying many airplanes and running a standardized charter fleet but that was prohibitively expensive. So then came the brainstorm to have the customers be responsible for the acquisition and upkeep of the jets. For many years a potential owner had to wait many months to take delivery of his share. Absolutely brilliant. However, somewhere along the line as it became apparent that $$$ could be made buy buying the planes at wholesale prices and selling them in pieces at retail prices that NJA started to have inventory issues. Too many planes. Unfortunately, we know the rest of the story, and some of you know it all too well.

However, the market changed, and better mousetraps keep evolving. After many incarnations, XOJet has seized upon the idea of true “branded” charter, with all the attributes of a brand name. Others are going there as well. Many customers, such as myself, have reduced their shares and now use both fractional and “branded” charter. The advantage of fractional is I am guaranteed a plane when and where I need it. But actually, while it sounds good, I only need this guarantee for a few peak days of the year and some very irregular flights. When I have flexibility or time, I price out XOJet first – if the flight is less expensive than using my fractional share I fly XOJet. Quite frankly for most flights over approximately 2.5 hours XOJet is usually much less expensive. Branded charter can be less expensive (more efficient) because it has the ability to change prices or refuse flights for flights which are less desirable for it to fly (XOJet prices a 1.2 hour flight ridiculously expensive so it either gets a lot of $$$ for the flight or doesn’t fly it). Fractional does not have this ability. If the rental car business went fractional, Hertz would have to guarantee me a car when and where I needed it – it would need many more cars to serve all the owners – instead of just being able to say “sorry – all sold out that day”. Therefore, while “owners” may move a portion of their flights to branded charter (allowing these companies to “cherry pick” the most profitable flights of a fractional operator, while leaving the fractional provider with the very unprofitable Sandusky, Ohio to Ithaca, NY flight.

Fractional is here to stay. But I believe many flyers will have smaller fractions than they had in the past.

Ugg...

 

[jtf]

Hmmm. EJM could be in a very nice position, if you are correct, which I suspect you are.

Which is why we would be best served finding a way to integrate them, or a sizeable portion that is not just managed aircraft, but maybe the new core fleet flown as charter, block charter, and sell-offs by pilots on the NJA seniority list under the same contract as the rest of us. This changes the scope issues and allows the company to grow in a way that the market is currently allowing. It would be best if these airplanes were from the same type of airframes that are coming to the fractional side, but I'm not so sure Berkshire would really want to fund a brand new core fleet, but since it will take quite a while to phase out the current fleets, it would probably be quite easy to move over unencumbered airframes and fly them as the new core/ charter fleet with an agreement that the NJA seniority list flies them. Management won't like having to pay our rates and benefits, but I wonder if it could work since it could benefit the pilots with keeping the jobs while allowing the company to match the current market. Any thoughts about whether or not this could work? I'm just a line pilot who spends too much time on the message boards and I don't really know what would and wouldn't work businesswise.