Looks like now it's official
NetJets plans to lay off nearly 500 pilots
Fewer than 100 of them are central Ohioans, company says
Thursday, November 5, 2009 12:27 PM
By
Marla Matzer Rose
THE COLUMBUS DISPATCH
NetJets Inc. said today it will lay off nearly 500 pilots, as its new management deals with a prolonged economic downturn that has hit the company hard.
The company employs more than 3,000 pilots worldwide, with most of them located in the U.S. Fewer than 100 of the pilots to be laid off live in the central Ohio area, said NetJets Chairman and CEO David Sokol.
The layoffs will take effect in 60 days. The expected number is 495, though Sokol said the number could end up being slightly reduced after discussions with the pilot's union. Pilots will receive two months' pay after being furloughed and will be eligible to be called back in accordance with union rules as pilot jobs are added in the future, he said.
Sokol, who replaced Richard Santulli as leader of the Columbus-based Berkshire Hathaway unit in August, said it was a "difficult decision" in recognition that demand for private-jet service isn't expected to recover soon.
NetJets pioneered the fractional-ownership model in the private-jet industry, allowing customers to buy a share in a jet rather than taking on the cost of operating one's own private aircraft.
Even after the layoffs, the company will remain several times larger than any of its competitors, Sokol said.
Efforts to avoid layoffs had been under way for months. The company's in-house pilot's union took on a set of voluntary measures aimed at avoiding furloughs in May. In late June, the company said it would not lay off pilots.
Sokol said the earlier decision not to furlough pilots was probably "overly optimistic" in hindsight.
Santulli, the previous chairman and CEO, abruptly resigned in August, just ahead of an announcement of a quarterly loss of $253 million. The majority of that loss was attributed to write-downs on the value of the company's aircraft.