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AIN Online article on santuli stepping down

jonjuan

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http://www.ainonline.com/news/singl...rax-industry-founder-steps-down-from-netjets/

Frax Industry Founder Steps Down from NetJets
By: Chad Trautvetter
August 5, 2009
Fractional


In a seismic event for the business aviation industry, NetJets founder, chairman and CEO Richard Santulli yesterday resigned his position at the company, effective immediately. Santulli, credited as the “father of the fractional aircraft industry,” said he will remain with NetJets–a Berkshire Hathaway company–as a consultant for at least a year. David Sokol, the chairman at Berkshire-owned MidAmerican Energy Holdings, is now chairman and interim CEO of NetJets “to allow for a smooth transition,” the parent company said.

“After 25 years of working with the most talented group of people I could ever have imagined, who helped build the premier aviation company in the world, I have decided to step down…to spend some more time with my young family and pursue other interests,” Santulli said in a prepared statement issued last evening. “I want to personally thank everyone at NetJets for all of their tireless energy, intelligence and support throughout all of these years.”

After a successful stint at Goldman Sachs, Santulli left in 1986 to start a company that sold fractional shares in aircraft, a previously untried concept. He acquired Columbus, Ohio-based Executive Jet Aviation as a platform upon which to launch NetJets. Although the company struggled in its early years, NetJets started gaining momentum in the early 1990s and by the end of the decade had become more than just successful. Berkshire Hathaway chairman and billionaire Warren Buffett, a NetJets shareowner, was so impressed with Santulli’s NetJets that he bought the firm in 1998 for $725 million and, as per Buffett’s custom, kept the company management in place.

“It is with reluctance that I accept Richard’s decision to step down,” Buffett said yesterday. “Richard Santulli is synonymous with the fractional jet ownership industry, and his vision and energy have made NetJets the leader that it is today.”

While it’s unclear why Santulli decided to leave, some sources suggest NetJets’ current finances might have been a factor, especially since Berkshire’s second-quarter results are scheduled to be released later this week. Under Santulli’s leadership and Berkshire’s ownership, NetJets was recording record profits this decade, until the latest recession caught up with the fractional provider. In the first quarter NetJets sustained a pre-tax loss of $96 million versus pre-tax earnings of $45 million in the year-ago period, according to a Berkshire financial report. “Revenues of NetJets in [first quarter] 2009 as compared to 2008 declined significantly as a result of an 80-percent decline in aircraft sales, as well as lower flight revenue hours,” the report noted. If this downward trend has continued, then the second-quarter financials for NetJets could be uglier.

Further industry speculation is that Santulli was protective of employees to the point that it might have interfered with rightsizing measures during this recession. There have been no announced layoffs at NetJets, despite the fact that the other three major fractionals have all gone through several rounds of layoffs since last fall.

But whatever the reason for his departure, don’t count Santulli out just yet, industry observers say. “Richard will continue to play an important role in the business aviation industry,” National Air Transportation Association president James Coyne told AIN
 

brokeflyer

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Hopefully Santulli runs BH as well as he ran NetJets....

this is a great day for NJA.....wish I didn't retire now......almost.
 

jonjuan

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Are you retarded or just act that way?
 

brokeflyer

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i only act that way so you can understand...

next week ill explain what a toothbrush is for, so pay attention.
 

jonjuan

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We don't use the word retarded anymore. It's not PC.
Sorry-my mistake. I just think of broke and the thought of a kid sitting on his porch banging pans together comes to mind.
 

HiSpeedFlyer

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Hopefully Santulli runs BH as well as he ran NetJets....

this is a great day for NJA.....wish I didn't retire now......almost.


Broke may have a valid point here. Richard had an emotional tie to NJA. HE didnt want to put one single member of his"family" out on the street, even though the current times screamed for it. With RIchard out of the drivers seat, this company will lean out, right size itself, and be poised for acceleration when the market picks up, which is an eventuality.
NJA was hemmoraging money at a disgusting pace, and (sorry, B19, stop stroking yourself to this) it had nothing to do with the pilot group. THe cost of the operations side is miniscule in relation to the losses and waste throughout all corners of the company.
Sokol is here to clean house, straighten out the mess, lean the machine.
So, this could be NJA's momen to shine. we shall see.
 

G200_PILOT

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Broke may have a valid point here. Richard had an emotional tie to NJA. HE didnt want to put one single member of his"family" out on the street, even though the current times screamed for it. With RIchard out of the drivers seat, this company will lean out, right size itself, and be poised for acceleration when the market picks up, which is an eventuality.
NJA was hemmoraging money at a disgusting pace, and (sorry, B19, stop stroking yourself to this) it had nothing to do with the pilot group. THe cost of the operations side is miniscule in relation to the losses and waste throughout all corners of the company.
Sokol is here to clean house, straighten out the mess, lean the machine.
So, this could be NJA's momen to shine. we shall see.

Agreed 110%!

We have already proven that we can be profitable. For a while, I was amazed at the growth rate of this company but I chalked it up to a rising demand. I see now that PART of the growth that we saw was in anticipation of further growth. This economic downturn has stopped us in our tracks and has left us with an unfortunate situation... overstaffing. If Sokol wants to "right-size" the company and essentially hit the "RESET" button, then I'm all for it if it means the survival of the company. The nice part about the CBA we have is that once the company begins to show a turn around, anyone who was furloughed will be given the opportunity to return. It's not a pretty picture but it's about time we start to face some facts. A company, even one as strong as NJA, can bleed for only so long before it becomes a statistic.
 

brokeflyer

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Santulli has ran this company well in good times and bad. Warren isn't the type of owner that makes snap judements. He aint looking at last qtr or the next 2 qtrs....he's looking at the next 5 years.

those of you that think Santulli was "asked to leave" are just plain wrong.
 

netjetwife

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Perhaps it was a mutual decision based on what was right for NJ? A coach can have lots of talented players. Putting them in at the right time is part of the key to being a successful coach, isn't it? And wouldn't a true team player want what's best for the team?

That analogy just came to mind, but I'm not a sports fan so you guys can take it from there...:p
 

chainring

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"those of you that think Santulli was "asked to leave" are just plain wrong."

Wow, so you were present at the meeting with Warren and Santulli.
 

glasspilot

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Broke, RTS is to be commended for creating what we all have today. But come'on. You know deep down he was shown the door. BH doesn't make the huge money they do by subsidizing egos or carrying extra weight cause it's the "right thing to do".

RTS has shown his loyality to the work group. Great. Now where is he? A new sheriff is in town and what should have been done will still get done. Don't get mad at me for pointing out the obvious. Massive losses can only last so long...

What NetJets and EVERY frac out there needs is a lean, mean, fighting machine to weather the storm. (that Bush created)
 

brokeflyer

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im retired....so the place is really gonna go down now so it dont really matter.
 

F/O

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The choices will be pay cuts or involuntary furloughs. Not because Sokol isn't a good guy, but because keeping both wages AND staffing at present levels at the moment is simply unsustainable. Just stating a fact.
 

BeeDubya

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The choices will be pay cuts or involuntary furloughs. Not because Sokol isn't a good guy, but because keeping both wages AND staffing at present levels at the moment is simply unsustainable. Just stating a fact.

I think unencumbered aircraft and owner demand play a HUGE role in this. If pilot ratios are matched to owned aircraft and demand, salaries are not an issue.
 
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