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Flexjet Takes Aim at Buffett?s Netjets for International Fliers

FamilyGuy

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Flexjet Takes Aim at Buffett's Netjets for International Fliers

http://www.bloomberg.com/news/artic...at-buffett-s-netjets-for-international-fliers

Link includes a video interview with Ricci on Bloomberg

Flexjet, the private aircraft flight-share company sold by Bombardier Inc. in 2013, is seeking to break the lock Warren Buffett?s Netjets has on international private flights.


Having just gotten its first Gulfstream G450s, and with G650s -- the longest-flying business jet -- to be delivered next year, Flexjet is doubling the number of planes by 2016 that have range to fly to Europe to more than 40, said Chairman Kenneth Ricci.


This is all part of a plan of ours to really move Flexjet out of the domestic markets and into the international market, Ricci said. Right now, Netjets kind of has that space all to themselves.


The opportunity for fractional operators overseas is large, Ricci said. There are about 110 fractionally-owned aircraft abroad competing for at least 800,000 flight hours a year. That compares with about 700 aircraft chasing 1.2 million flight hours in the U.S., he said.


The U.S. has somewhat flattened out but the worldwide market is still just beginning, Ricci said in an interview with Bloomberg Television.
Netjets, a unit of Berkshire Hathaway Inc., is the largest fractional operator with about 700 aircraft in its fleet followed by Flexjet with 150. With fractional jets, customers buy a share in the plane that the companies control, maintain and provide pilots and other services for. That differs from jet charters in which individuals own aircraft and allow management companies to book flights on them.

Seeking Acquisitions

Flexjet may seek to acquire a European company to gain an operator's license and the knowledge of flying throughout so many countries, Ricci said.


We don't have to make a big acquisition, said Ricci, who is also a principal with Flexjet owner Directional Aviation, which also controls several aviation businesses from jet charters to aircraft engine management. We just need to get our toe in the water.


Directional had been in negotiations to buy a smaller fractional jet company in the U.S. two years ago, to increase its fleet, but that fell through, just after it bought Flexjet, he said. The negotiations stretched beyond the first-of-year peak season and Directional decided it was better to buy new jets instead, Ricci said.


That strategy makes more sense now as used jet prices recover and as plane manufacturers offer extended warranties, which can save as much as $800,000 per jet each year, Ricci said.


With the cost of money and the manufacturers support of the new aircraft, they have swung the pendulum and the value to us seems to be more on the new aircraft, he said. Today the compelling buy is in the new market.
 
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flex*wife

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And the resounding reply from Nebraska was "Kenn who?"

Prediction: Flexjet loses more owners to Netjets due to their new association with the terrible brand Ricci created with his missteps at Flight Options than the other way around.

I'm not saying it's an accurate perception but it does exist. Those owners chose Flexjet mostly for reasons that Kenn Ricci doesn't understand and his nuoveau riche sentimentalities don't compute. Netjets will be the bespoke fallback. Once upon a time no one did bespoke better than Flexjet but alas no more.

If I didn't know better, by the way Ricci has handled his entire career, I'd say he's merely in the business of making Warren Buffet richer and bigger not aviation management.
 

GlorifiedCabbie

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These aren't just Gulfstream 450's, they are txi's. Interiors that are "bespoke" and will set Flex apart from the competition. The pilots will be easily identifiable by their new uniforms that are to be distributed by the end of the summer.
 

993_Pilot

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...Netjets, a unit of Berkshire Hathaway Inc., is the largest fractional operator with about 700 aircraft in its fleet followed by Flexjet with 150....

So Flexjet has 150 aircraft now?... Wow, I guess he has been growing it faster that I knew.
 
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NJAowner

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I saw the G-450 at Teterboro at NBAA the other day. It does look quite nice (but so does probably every 2 day old jet). Out of curiosity, if I am a Flexjet G-450 owner and there is a maintenance issue or a fatigue call when I am in eastern Europe, or anywhere on the other side of the planet, who recovers as they have nothing even close to that side of the planet? Just wondering? They can probably handle the US decently, but what about other places.
 
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slowtation capt

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I saw the G-450 at Teterboro at NBAA the other day. It does look quite nice (but so does probably every 2 day old jet). Out of curiosity, if I a, a Flexjet G-450 owner and there is a maintenance issue or a fatigue call when I am in eastern Europe, or anywhere on the other side of the planet, who recovers as they have nothing even close to that side of the planet? Just wondering? They can probably handle the US decently, but what about other places.
Don't worry, there might be a mx issue but there won't be a fatigue call because they are personally screening all the pilots for entry in the G's to make sure they are their go to guys who will get the job done, no matter what.
 

X-rated

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I guess you would have to check your contract, but there is no shortage of Gulfstream and Global Express charter operators in Europe who will be more than happy to recover. It would cost Flex a small fortune, but do you really care?
 

NJAowner

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If it were me I could buy charter on my own. And there is no guarantee that they pay top dollar for a good operator. Just wondering
 

shanes123

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Slowtation has it correct. You wil never get a fatigue call from the crews they picked. They would rather put your life in jeopardy or their license in jeopardy then make a fatigue call plus it cuts into their productivity bonus . And a mx issue is unlikely unless it's very severe you just fly it broke.....again that would cut into your bonus..these planes are gonna have a 99.9% dispatch ability rate
 

Flex605

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Long range program at flex= hiring out of senority ass kissers who fly tired , sick and airplanes in any mechanical condition to get a bonus .
 

Imissmypilot

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Slowtation has it correct. You wil never get a fatigue call from the crews they picked. They would rather put your life in jeopardy or their license in jeopardy then make a fatigue call plus it cuts into their productivity bonus . And a mx issue is unlikely unless it's very severe you just fly it broke.....again that would cut into your bonus..these planes are gonna have a 99.9% dispatch ability rate

...and with all due respect to most owners who might be reading this, we have to spell it out for them:

What slowtation, shane, flex605 etc are saying and are 100% correct in pointing out, is that dedicated crew programs, especially those with a financially based incentive, are no safer than your "average" charter operator at best and at worst, an accident waiting to happen.

If you are rich and attracted to the idea of dedicated crew, you are far better off purchasing outright and controlling the variables yourself versus going with a known shell game expert like Kenn Ricci. It pains me to say that because I love my job and want my company to be successful. But I also care about the owners I fly and would hate to see them ripped off the way Red Label will do it...

The beauty of a fractional, even if you own 100% of the plane, is the availability and reliability of not just a fleet of aircraft but of a fleet of highly trained, professional, personable, adequately rested crews as well.

If safety is your number one concern backed up closely by reliability, a fractional with a seniority based crew system is your best best. And if negotiated correctly, won't cost you as an owner any more money than a new red label contract. These fractionals are making money hand over fist as it is. They can afford to pay for better than the crews are getting without raising prices.

Screw pilots speaking up. It's high time for owners to speak up and tell asshats like Kenn Ricci that well paid, well managed, well rested pilots are important to them. Remember as an owner the guy or gal up front has your life in their hands. As one of the guys on here correctly points out don't ever go cheap with your surgeon or your pilot. How true that is...

I'm tired of owners getting off easy claiming a blind eye to how we are treated. At least NJAOwner seems to get it. Now how do we tackle the other 99.9999999% of them?
 

GlorifiedCabbie

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...and with all due respect to most owners who might be reading this, we have to spell it out for them:

What slowtation, shane, flex605 etc are saying and are 100% correct in pointing out, is that dedicated crew programs, especially those with a financially based incentive, are no safer than your "average" charter operator at best and at worst, an accident waiting to happen.

If you are rich and attracted to the idea of dedicated crew, you are far better off purchasing outright and controlling the variables yourself versus going with a known shell game expert like Kenn Ricci. It pains me to say that because I love my job and want my company to be successful. But I also care about the owners I fly and would hate to see them ripped off the way Red Label will do it...

The beauty of a fractional, even if you own 100% of the plane, is the availability and reliability of not just a fleet of aircraft but of a fleet of highly trained, professional, personable, adequately rested crews as well.

If safety is your number one concern backed up closely by reliability, a fractional with a seniority based crew system is your best best. And if negotiated correctly, won't cost you as an owner any more money than a new red label contract. These fractionals are making money hand over fist as it is. They can afford to pay for better than the crews are getting without raising prices.

Screw pilots speaking up. It's high time for owners to speak up and tell asshats like Kenn Ricci that well paid, well managed, well rested pilots are important to them. Remember as an owner the guy or gal up front has your life in their hands. As one of the guys on here correctly points out don't ever go cheap with your surgeon or your pilot. How true that is...

I'm tired of owners getting off easy claiming a blind eye to how we are treated. At least NJAOwner seems to get it. Now how do we tackle the other 99.9999999% of them?

I left corporate because it was worse than Red Label. Talk about promoting ass kissers that are incompetent pilots....
 

NJAowner

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Thank you for your comment. I have learned more than a tremendous amount being on this board. Not that I take most (or even much) of what is said as fact - it has educated me on what the service and what many of the issues are. Once I know what many of the issues are, I can continue my education, ask appropriate questions and conduct my own due diligence.
 

G4dude

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Thank you for your comment. I have learned more than a tremendous amount being on this board. Not that I take most (or even much) of what is said as fact - it has educated me on what the service and what many of the issues are. Once I know what many of the issues are, I can continue my education, ask appropriate questions and conduct my own due diligence.

I think Flex will have trouble recovering overseas mechanicals compared to NJA. We have too many planes everywhere. By the way, the safety cultures of Flex and NJA are much better than many corporate and charter outfits. I know this by personal experience. The FAA oversight is better, and the conversations in the cockpits, when we trade stories and experiences with many different colleagues, really enhance frac's safety.
 

X-rated

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Thank you for your comment. I have learned more than a tremendous amount being on this board. Not that I take most (or even much) of what is said as fact - it has educated me on what the service and what many of the issues are. Once I know what many of the issues are, I can continue my education, ask appropriate questions and conduct my own due diligence.

Excellent mindset. It's important to keep in mind everyone on this board flies for a fractional. Just about every person here thinks they fly for the safest operator in the safest segment of the industry and give the best service at the same time. If you talked to pilots at quality charter operators, of which there are many, they would have a very different opinion. I work for a private individual in a small corporate department. We follow all of IS-BAO's best practices and are supported by a very large EASA certificate holder. We fly much less and are always well rested. My boss is a very nervous flyer, and our jobs would be in jeopardy if we did push or carry squawks. There is no union here to protect subpar pilots, and our decisions are never second guessed by bean counters. Yet many on here would have you believe we are cowboys in the wild west that is Pt 91. There is good and bad everywhere. Remember Avantair? They were a fractional, and their pilots claimed their company was best in class right up until the FAA pulled their Certificate for egregious maintenance abuses.

Anyone who claims they are the safest or "best" should be suspect. Safety must be strived for every day with a humble attitude. There is a lot of chest thumping going on around here. That's all I'm saying.
 

X-rated

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By the way, the safety cultures of Flex and NJA are much better than many corporate and charter outfits. I know this by personal experience. The FAA oversight is better, and the conversations in the cockpits, when we trade stories and experiences with many different colleagues, really enhance frac's safety.

And, they are undoubtedly worse than many other charter and corporate operators. While you can point to specific things in your operation that can be widely agreed are advantageous, there are likely just as many things unique to your type of flying that are a disadvantage. The problem is, the disadvantages are rarely talked about here. I hope you're at least trying to identify them for yourself and are not complacent thinking you have an above average safety culture. All of aviation has changed a lot in the last decade. To assume your safety culture is better is both arrogant and likely naive. Yes, we all know of dirtbag operators, but there are many high quality 135s and 91s out there too.

The pace, diversity, volume, and pressure of fractional flying is inherently more dangerous than most other segments of the industry. I'm sure you guys do a great job mitigating those risks, but it's offensive to suggest you are the only groups taking safety seriously. When safety is used as a sales tool, it is almost always a sham. Don't buy the hype. Stay humble and constantly look for traps.
 

NJAowner

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Operators

X-rated - I agree and do not lump all operators of any type (corp., charter or fax) into any generalization any more than I lump all restaurants into a generalized category of quality, service, cleanliness, etc. However, that being said, I personally have a few friends who have their own jet operations and I would never fly tight them on their personal jets. They are some of the cheapest people i know, don't spend enough on their own car's maintenance or even put off healthcare wondering about co-pays and deductibles even though $$ is not an issue. I can not assume they take a completely different approach to their aviation needs.
 

X-rated

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X-rated - I agree and do not lump all operators of any type (corp., charter or fax) into any generalization any more than I lump all restaurants into a generalized category of quality, service, cleanliness, etc. However, that being said, I personally have a few friends who have their own jet operations and I would never fly tight them on their personal jets. They are some of the cheapest people i know, don't spend enough on their own car's maintenance or even put off healthcare wondering about co-pays and deductibles even though $$ is not an issue. I can not assume they take a completely different approach to their aviation needs.

I completely agree there are many people like your friends out there. However, I fly for a billionaire who honestly values safety and taking care of his 70M dollar investment. I have a blank check when it comes to maintenance and running the flight department, and have never been questioned on an expenditure. Ever! I've been directed to keep the plane in perfect condition at all times and money is literally not a factor. Pt 91 includes fortune 500 flight departments not just yahoos trying to fly private on a budget. There are cheapskates trying to cut corners and best in class operators in every segment of aviation. You've been reading this board long enough to know Avantair was one of the worst offenders, yet their fractional pilots swore what a quality outfit they were. I'm glad you know enough not to trust your cheapskate friends, but wonder if you would prefer to fly on Chevron's new Gulfstream with pilots who have been off duty for several days or a high time runout Hawker being flown by guys who have been on duty more than 85 hours in the past 7 days? It wouldn't be a tough choice for me.


I know many Gulfstream, Global and 7X operators who run top notch private flight departments. I would agree there are probably more small airplane operators flying jets they really can't afford who are more likely to cut corners they shouldn't. But it's been my observation, with all due respect to Warren, many very wealthy people prefer private to fractional and those operators often run very respectable flight departments.
 

G4dude

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I completely agree there are many people like your friends out there. However, I fly for a billionaire who honestly values safety and taking care of his 70M dollar investment. I have a blank check when it comes to maintenance and running the flight department, and have never been questioned on an expenditure. Ever! I've been directed to keep the plane in perfect condition at all times and money is literally not a factor. Pt 91 includes fortune 500 flight departments not just yahoos trying to fly private on a budget. There are cheapskates trying to cut corners and best in class operators in every segment of aviation. You've been reading this board long enough to know Avantair was one of the worst offenders, yet their fractional pilots swore what a quality outfit they were. I'm glad you know enough not to trust your cheapskate friends, but wonder if you would prefer to fly on Chevron's new Gulfstream with pilots who have been off duty for several days or a high time runout Hawker being flown by guys who have been on duty more than 85 hours in the past 7 days? It wouldn't be a tough choice for me.


I know many Gulfstream, Global and 7X operators who run top notch private flight departments. I would agree there are probably more small airplane operators flying jets they really can't afford who are more likely to cut corners they shouldn't. But it's been my observation, with all due respect to Warren, many very wealthy people prefer private to fractional and those operators often run very respectable flight departments.

I am just relating my own experiences. I flew for Flex, and now for NJA. Previously I flew for several corporate and charter outfits, and the Frac model is far safer, in my opinion. I am SURE there are exceptions. The main problem in charter is the temptation to cut maintenance and training costs, while the corporate Achilles heel is (a) the Chief Pilot being a political animal who won't tell the President no when no is called for, and (b) the problem of the hovering CFO who thinks the Aviation Department is an unnecessary expense. Also, flying with many different pilots in a frac, and trading stories, creates a storehouse of experience. A larger pilot group allows a much less sclerotic culture to thrive. It seems to me. I don't mean to offend.
 

X-rated

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Also, flying with many different pilots in a frac, and trading stories, creates a storehouse of experience. A larger pilot group allows a much less sclerotic culture to thrive.

That's without question very true. The best part about going to recurrent for us is the exchange of information with other operators. That benefit is in my opinion balanced by the fact that I've done two type ratings and at least a dozen recurrent training events with the same guy sitting next to me. We follow SOPs and know exactly what each of us is going to in just about any situation. You can say your group is standardized, but it's not nearly the same. I honestly don't believe we are sclerotic.

I find it disingenuous for you to try to convince owners fractional flying is the safest form of GA travel. I've done it, and it is inherently more dangerous. I've flown many dozen NetJets trips, and have actually been assigned to NetJets for days on end. We worked directly with your dispatch and had to follow all of your rules. They beat us like the rented mule we were, and we, like you, regularly flew into the the most challenging General Aviation airports with little or no notice. I'm sure you guys do a great job mitigating the risks, but you cannot fly 5 legs a day, to the most challenging airports with no notice and be on duty 14 hours a day for 7 days in a row and say you have the best safety culture. That's just B.S. Very few quality corporate operators do anything like that. Almost all, international operators at least, must now follow some form IS-BAO's best practices and have an SMS to include audits.

My boss is probably somewhat unique, but he never pushes. If I say the runway is too short, it's too short, and we'll get a helicopter to meet us. If I say we need more rest or to pre-position a crew that's what we do. Period. Our owner doesn't get involved with operations at all other than to sometimes say, if there are clouds at the airport, we can go somewhere else!
 
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