Buffett's Baby Is Taking a Bumpy Ride

[gunfyter]

Here is what i am talking about.

The new contract has me working 14 more days on the new 7/7 than the old 7/7.Ave 4 hrs a day in a CE-750 times 14 days is 56 hrs. Times say $5k/hr in selloffs is $280K savings on selloffs due to the new schedule. Combine that with the FIRST DAY utilization ability the new CBA provides because schedule can be done night before instead of a showtime given a week ahead...Say 2 hrs average for 20 tours... another 40 hrs that don't need to be sold off.Thats another $200k. $480K potential savings per two CE-750 pilots... new CBA vs old CBA. Obviously more than offsetting the cost of the new CBA.Thats why RTS knows we will make money this year... and he will save $100M in selloffs compared to last yr.

 

[notaNJApilot]

That's good info. Thanks for setting me straight.

 

[gunfyter]

The name of the game is efficiency in scheduling to Realize those potential savings. Also the numbers will be lower for smaller airplanes with lower charter costs. And I do not really know what NJA pays per hour for charter. But 5K must be somewhere in the ballpark

 

[Publishers]

I indicated that I was talking downstream. One of the things not talked about was the writedown which indicates the degree which residual values effect the companies. Of course some of this is the result of the hours put on the aircraft in Netjets versus corporate environment. As far as the contract, it will not be the salaries but the work rules that have the effect. This too can effect the number of pilots and the hours put on aircraft, the strain on crewscheduling, and the other aspects of the business.
There are other things as well. Interest rates, fuel prices, that effect the new sales through ownershhip costs. The point was made in the article that they thought mass would overcome compeitition. They are not going to be correct on that I suspect. That is airline thinking and look where that got them.

 

[gunfyter]

work rules.

How many hours of flight time is enough?

Scheduling has adopted quickly to 91K and all crew Duty and Rest rules. I thought my flight hours would be reduced but they HAVE NOT. Hours have increased. They figure it out. Necessity is mother of invention. As time goes on they will learn to be even more efficient within the rules.

The change in work rules has enabled OPS to fly me MORE hours per year... while enhancing crew rest... AND COMPLYING WITH FAA DUTY AND REST RULES ... thanks to the new CBA.

This increase in hours flown by pilots means less selloffs and thats why RTS knows we will make a profit.

How to save 100 Million on Charter

Increase flying in in-house fleet. The article said high charter usage was due to pilot shortage. If each of the current pilots increased flying by just 20 hours per year. 20 hours times 1000 crews would be 20,000 hours not flown by charter selloff.

20,000 hrs times $5k per hr is $100 milllion!

This is offset by pilot salaries and operational costs of operating your own fleet by some amount.

I expect to surpass MY last years flight hours sometime during July. The rest of the year is basically Selloff Reduction relative to last year.


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The new CBA will enable this savings.

 

[SheGaveMeClap]

So Netjets guys, what you think of Uncle Warren giving away your pension?

I'm just kidding, sort of. It's nice you got the raise that you did, but to fight hand and fist for three-plus years to get it was ridiculus. Especially since he just GAVE AWAY $37+ Billion dollars.

Flame away.....

 

[Hawk Driver]

So Netjets guys, what you think of Uncle Warren giving away your pension?

I'm just kidding, sort of. It's nice you got the raise that you did, but to fight hand and fist for three-plus years to get it was ridiculus. Especially since he just GAVE AWAY $37+ Billion dollars.

Flame away.....

Uncle Warren doesn't even give money to his OWN grandchildren, why would he bother giving away the money to us?

HD

 

[Publishers]

Flying more hours is not necessarily a good thing or even relative to profits. There is no question that use of outside charter operators diminished profits but that may be traced more to Marqui cards where a share generates much more use and customers that want to travel at the same time. Resellers usually are the result of your not selling enough of the kinds of shares you wanted to.

 

[WillFlyFoCookie]

I haven't been flying for NetJets very long but I'm certainly going to remain optimistic. I like working here very much and judging by so many of the smiling faces I've seen in indoc, recurrent, hundreds of FBOs everywhere and the Embassay Suites... I'm guessing there are a lot of people that feel the same. Attitude is everything and that will go a long way towards an even more successful future.

Based on my knowledge of NetJets and it's operations I'd say things are looking up and that 2006 will go down as a landmark year and in a good way at that.

Peace,

WFFC

 

[Publishers]

One should remain optomistic. There are so many outside and uncontrollable things that impact this industry, one would quickly go mad trying to deal with all the What If's. GA has been in an up mode and should continue on the path.
A big question mark in addition to what I said above is what the manufacturers are going to do. As Cessna, Raytheon, and Bombardier all have fractional operations, it remains to be seen what they do with their model.

 

[netjetwife]

Some of life's basic lessons apply to the NJA contract battle.

It costs more in the long run to keep sticking band-aids on a problem, rather than fixing what is broken. Time and again, across all industries and situations, it has been proven that dragging your feet just wastes time and money. The sell-offs due to labor strife and pre-booking (don't forget those) charter flights in anticipation of a strike and/or labor problems during the holidays, could have been avoided. Certainly, the infamous POSTA could have/should have been skipped. The NJ pilots have had to bear the brunt of far too many penny-wise/pound foolish schemes by management. It took them awhile but the pilots learned that bullying doesn't stop until you stand up to the bully.

Mr. Santulli recalled. "I should have hired 300 pilots, but no one knew what their contract would be. So I had airplanes and no pilots." The shortage is now over, NetJets said. That doesn't tell the whole story, does it? It is more accurate to say that they couldn't get enough experienced pilots to take the job at the low wages offered. Obviously, increased salaries made a difference as did the huge boost to job satisfaction. No surprise there--you get what you pay for.

Experience in life teaches us all that it's cheaper to do things right from the beginning. Cutting corners, taking short-cuts, applying band-aids just prolonged inefficiency. With increased wages came an increased need for efficiency. As Gunfyter pointed out, management is now applying themselves to addressing the problems that they were able to ignore while they underpaid the pilots. They are currently working with the union, instead of against the union, to achieve greater profitability. Tapping into the talent pool that exists in the pilot force --making the best use of available resources--is a smart, profitable thing to do. Likewise, increasing motivation rather than decreasing it, will give RTS the 100% he accused the pilots of withholding. Let's hope that management has finally managed to learn that you get better results from the carrot approach than you do from wielding a stick.
NJW

 

[CRAWDADDY]

Buffett only wants to kill the future. This thinking is so Seventies. Even Japan announced today that its population implosion represents its biggest crisis.

 

[lawfly]

So Netjets guys, what you think of Uncle Warren giving away your pension?

I'm just kidding, sort of. It's nice you got the raise that you did, but to fight hand and fist for three-plus years to get it was ridiculus. Especially since he just GAVE AWAY $37+ Billion dollars.

Flame away.....

There is no "pension" at NJA. (Do you know the difference between a 401k and a pension?) A "pension" provides an amount certain--usually a percentage of one's highest salary--typically for life, after "vesting", and based on years of service. The best examples outside of aviation are probably in the public sector (for example, CALPERS in California). Thoughtless post.
Regarding Publishers' inclusion of Raytheon and its fractional, the billion dollar Hawker 4000 order from NetJets should help Raytheon's financial position...

 

[Publishers]

While it is nice that Netjetswife gets to pontificate the platitudes, business is a long term affair and much remains to be seen. In the end, I doubt if the pilot salaries and contract negotiations mean much to the future as some other outside issues.
Raytheons getting orders from Netjets could hasten or delay the termination of Flight Options future.

 

[FAcFriend]

classic case of crossing the chasm-
difficult and tricky in all new industries-