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Flexjet Takes Aim at Buffett?s Netjets for International Fliers

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FamilyGuy

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May 12, 2005
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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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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.
 
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.
 
...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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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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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.
 
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?
 
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
 
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
 
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 .
 

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