Article on NetJets & Bombardier

[BARNSTORM]

The Lear 85 is the only thing that will save Flexjet. Bombardier already screwed flex by selling their best plane,(Challenger 300), to their competitor. Now Bombardier took Fred Reeds one and only vision for flex, (Globals), and trashed it. What's left?

 

[superfly]

Flexjet

I would have to agree Flex is ok for now, but if NJA orders 120 LRJ85's and C300's look out. Expect a no compete clause on the 85 and Platinum C300 (exclusive NJA).

Time to dust off that logbook, SWA's app window is open...

 

[johnsonrod]

I would have to agree Flex is ok for now, but if NJA orders 120 LRJ85's and C300's look out. Expect a no compete clause on the 85 and Platinum C300 (exclusive NJA).

Time to dust off that logbook, SWA's app window is open...

Jet Blue, Allegiant and VA are also hiring...

 

[wolfpackpilot]

NetJets management has stated numerous times the recent aircraft purchases are replacements and that there is no 'net' growth from these orders. Furthermore, the CEO has said they see NetJets growing financially stronger, by becoming smaller.

I fail to see how a FlexJet purchase could add to NetJets bottom line... and don't trust me, trust the CEO who has said; "if it doesn't make a profit, we don't do it".

 

[LAZYB]

NetJets management has stated numerous times the recent aircraft purchases are replacements and that there is no 'net' growth from these orders. Furthermore, the CEO has said they see NetJets growing financially stronger, by becoming smaller...

That's all in "context".

The possibilities suggest potential change in "context".

ymmv

 

[Tenspot]

I fail to see how a FlexJet purchase could add to NetJets bottom line... and don't trust me, trust the CEO who has said; "if it doesn't make a profit, we don't do it".

Acquisition of customers and elimination of a competitor is one of the key goals of a business. I would say that the right deal is not only a possibility but almost a certainty. I don't think it will be a merger or acquisition. Think picking up customers and purchasing certain aircraft.

 

[Ref]

What makes everyone think that FlexJet owners want to be bought out by Netjets. Would something like that have to be approved by the owners before Bombardier just up and said you are sold? What if you bought our owner contracts and half of them didnt want to go to Netjets? It seems like there are a lot of variables at play here. Personally I don't think the sky is falling just yet, but what the hell do I know.

 

[G4dude]

G4, the key is not the Globals. It depends on whether this order leads to other orders in the midsized fleets.

I hadn't thought of it that way, Helm. Hmmm. After reflection, which is a painful process for me, I think NetJets' decision on mid and super midsize will be VERY interesting.

 

[NJAowner]

If these purchases are viewed as "replacements" and not "additional aircraft" for NJ, where are the owners of these shares going to come from. With the current state of the fractional industry, very few existing owners will be interested in buying shares in "new" aircraft and "new" fleets while the price of preowned shares are where they are (and very high inventory levels).

For example, why would I pay full price to be in a new Phenom 300 share and be in one of the first 20 aircraft. NJ will not have enough Phenoms to fly me, so they will probably fly me in the Encore or"upgrade" me to the XLS in the meantime. So for the first 2-3 years (of a 5 year term), I will be flying in the Encore or XL. And I would be able to buy a pre-owned Encore or XLS ahre for a fraction of the new Phenom price.

Once upon a time, there were very few, if any, preowned shares. The only way to get into the NJ program was to buy a new share. Those days are gone. With what most existing owners have seen (and been pitched), they will probably never buy a new share again. (For example, last year I needed more time, was exploring a card and other options, but was pitched a pre-owned XL share for between 1/5 and 1/6th (yes between 16% and 20%) of the price of a new share. I still ride in the same fleet. The sales staff spent a good bit of time educating owners on why pre-owned shares are a much better value than new shares (when they were trying to unload the former). Now try to unteach the owners. Selling brand new shares will be more difficult int he future.

 

[jtf]

I understand what you are saying, but the airframes are getting older and need to be sold off and replaced. The company plans on "retiring" around 40 airframes a year and pretty much has to do this as the airframes get too old to handle the fractional demands without breaking every other leg. I'm sure many current customers will go away, but I'm also sure many of them will leave even if there are enough used shares for them.

The plan is for airframes to last for about 10 years and then be gone so over time they will be gone and hopefully the sales force will be successful finding replacement owners for the replacement airplanes. What you have now just cannot be sustained unless NJA went out and started buying up used airframes to replace the oldest ones and that just isn't going to happen. The company knows the real money is in selling new airplanes and really has a vested interest in getting rid of the older airframes since they get more and more expensive to operate as they age and since their used share prices aren't real money for the company. That said, it will be another year and half before any new types come on property and at least another 2 years before any of the Phenoms are coming in. That is plenty of time for quite a few owners to renew their contracts at the bargain prices and then sit on them for another entire ownership cycle before they are forced to buy into a new airplane if they choose to stay. There may even be used deals for them even after that cycle since it will be a long time before the current airframes are all gone and replaced by the new. I agree it will be more difficult to sell new to the current owners, but eventually there won't be a choice if they wish to stay with NJA.