FlexJet

[Ref]

What I dont understand is they need everyone now, but in May they say there might be a need to reduce staffing. But that puts them 5 to 6 months aways from another busy season. Are they going to call people back in a few months or just be massively understaffed for the 2010/11 busy season. Maybe its time to start looking to get away from all this BS.

 

[Dooker]

What I dont understand is they need everyone now, but in May they say there might be a need to reduce staffing. But that puts them 5 to 6 months aways from another busy season. Are they going to call people back in a few months or just be massively understaffed for the 2010/11 busy season. Maybe its time to start looking to get away from all this BS.

Agreed. Our busy season this year was way busier then last year's. And they had to charter out the wazoo, as well. More cuts around the middle of the year doesn't make a lot of sense.

Another rumor, this one pretty interesting: the mother ship in Montreal might start refusing to automatically accept our old jets into its used inventory, as it has in the past. In other words, Flexjet will have to hang onto its old jets and figure out a way to make money with them once they exit the owner fleets.

I'm not smart enough to figure out what impact, exactly, this would have on us, but it sure would represent a big change in how we do things.

 

[smartelephant]

Agreed. Our busy season this year was way busier then last year's. And they had to charter out the wazoo, as well. More cuts around the middle of the year doesn't make a lot of sense.

Another rumor, this one pretty interesting: the mother ship in Montreal might start refusing to automatically accept our old jets into its used inventory, as it has in the past. In other words, Flexjet will have to hang onto its old jets and figure out a way to make money with them once they exit the owner fleets.

I'm not smart enough to figure out what impact, exactly, this would have on us, but it sure would represent a big change in how we do things.

I don't see how that would benefit Montreal. Because, unless there is some written agreement between Montreal and Flexjet, then Fred could simply hold onto the old planes, put a new interior and coat of paint on them and keep on going. Then Montreal looses out on the new aircraft sales at full retail. As far as the owners go, I don't think they are promised a new airplane every 5-7 years. I think that is just a marketing gimick to set Flex apart from the others. But I could be wrong.

On another note, I wouldn't be a bit surprised to see another 30-60 let go in May only to return in Sept-Oct for the busy season. I think the bottom line is cheaper to let them go, pay the severance, and then bring them back into the exact same fleets with basicly a long recurrent event upon returning. I really hope I'm wrong, and I probably am, but it wouldn't surprise me.

 

[NJAowner]

Flex has put out many "studies" on used jet sales which show that the cliff for used jet prices is after 7 years. They have strongly pushed the attempted to prove this over the years and that is the given reason why they sell the jets after 7 years. Changing this will be a major "foot in mouth" for the Flex salesmen.

Fly safe.

 

[Dooker]

Flex has put out many "studies" on used jet sales which show that the cliff for used jet prices is after 7 years. They have strongly pushed the attempted to prove this over the years and that is the given reason why they sell the jets after 7 years. Changing this will be a major "foot in mouth" for the Flex salesmen.

Fly safe.

But all they seem to be selling anymore is jet cards, anyway. To do that, they don't need new jets.

You have to wonder if this is where the industry might be headed. Older and older fleets flying predominantly charter, with an occasional trickle of of new metal for those willing to tie up that kind of money in what might prove to be a lousy investment.

 

[johnnyride24]

No. Some older/higher paid captains are forcing themselves out via gross incompetence during training events.

Senial

 

[NJAowner]

Older and older fleets flying predominantly charter, with an occasional trickle of of new metal for those willing to tie up that kind of money in what might prove to be a lousy investment

First of all, almost any investment in aviation can be a bad investment. However, buyingh a fractional share is not always an "investment" butr either a lifestyle choice or a productivity enhancer (or both). Depending upon your flight needs, if you need greater than 50 hours per year for more than a year or two, a fractional purchase may (all lurkers -- read this --may -- depending upon your circumstances -- note I did not say "shall for everyone") the least expensive option. It makes sense for ma and many others -- less expensive than jet cards, less expensive than charter, less expensive than ownership. For the most part, the cards make sense for people just getting in or who do not have long term aviation needs.

Fly safe.

 

[smartelephant]

NJAowner, I have a question. Seeing as how you've been a longtime player in this game and you may know several of the other players, where do you see this industry as a whole in 6/12 mos(not just NetJets)? Specifically, those people who fled the industry in the fall of 2007 when the bottom started to fall out. Will they return for business/pleasure reasons, or were they in the game to begin with due to unsubstantiated, overinflated wealth that maynot return for some time? Also, do you see the troubles of the airline industry driving some new business that wasn't there before? Especially due to safety concerns? Thanks.

 

[NJAowner]

I have no dependable data other than anecdotes and personal observation, but my guess is the following:

1. NJA will survive and be viable. A service has been created and substantial demand is there. How far it grows long term I do not know. But for the US domestic market, it is here to stay. There will always be a cadre of people who want to fly privately, don't want charter brokers or cut rate charter, and don't want/need their own a/c. Especially with prices where they are, I have thought about buying an a/c with a few others. However, NJA provides a safe, dependable and headache-free service. No hiring, firing, bills, maintenance. Our tough decisions are what to order for catering -- and I am being serious not my usual sarcastic self. I do agree with many of the posters that in time NJA will reduced the number of options in the fleet.

2. Other fractionals will be tough. In my opinion Flex and CS exist as an introductionto their respective manufacturer's products. It is akin to the heavily subsidized car leases. Eventuallay it catches up to the parent company and you need to be able to justify the existence. I think CS (now as Citation Air) is branching out. I think the market is ripe for very dependable, price sensitive, heach-ache free,safe charter. I have not studied the new CS business model but maybe they are trying to capture some of that. I think that Avanair has a good service for some people. There are many who need/want private aviation for short hops and thir product does seem to be in a sweet spot. Great for personal use: Bahamas, Florida, Nantucketm, Martha's Vineyard, Eastern Long Island, Vermont; and for short but strange business trips --Trenton, NJ to Buffalo, NY, Macon GA to Birmingham, etc. Flight Options looks like it may have a good entry product with the Phenom based upon the costs I have seen.

3. Cards -- they will always exist in some form. They are a great intro to private aviation. I think card sales will decrease. In the good economy many people bought/received cards as bonus, gifts, etc., or just to treat themselves. I think a good bit of this market is gone for a long time. As I have said before, I think that cards are great for short term users or people who do not want, can not afford, or donot need a long term commitment.

The fractional business is by definition is very inefficient. Other than peak days, I get to fly when I want, regardless. There are many times I have flown into XXX airport in an Excel only to have another Excel take off within 1 hour of my flight for its passengers. Very ineffcient. If the model gets redefined to provide some incentive to owners to allow the operator a little flexibility in scheduling, the model can get much more efficient. There have been other times when I have done an out and back in 14-15 hours. That was best for my schedule. However, NJ had to swap crews and kept the same a/c for me. If I had some incentive maybe I wold make my meetings a little shorter. There are many times I would be flexible by an hour to 90 minutes from some savings, and sometimes when I can not.

I actually only see marginal growth coming becuase of the airlines. Over the past decades the airlines have done an awesome and incredible marketing job for private aviation. Other than someone who has not yet had the wealth to travel privately, all the juice has been squeezed from the airline orange. Ober the past 10 years if someone has had the $$ and has had the inclination to travel privately, they have made the switch. However, there will be some marginal sales from people who have had the $$ but not the inclination, but now as they are getting a little older and have some health issues, do not want to deal with the airlines. I would save these people are 75+ and typcially fly from to and from Florida several times per year, and have decided to leave the kids and grandchildren with a little bit less inheritance.

I end withsomething I have posted for a while. Flying privately is a nasty addiction and probably one of the toughest to kick. Once people have the taste, they will do all they can to fly privately and maybe even sell the 3rd home to be able to fly to the 2nd privately.

Fly safe.

 

[Dooker]

I have no dependable data other than anecdotes and personal observation, but my guess is the following:

1. NJA will survive and be viable. A service has been created and substantial demand is there. How far it grows long term I do not know. But for the US domestic market, it is here to stay. There will always be a cadre of people who want to fly privately, don't want charter brokers or cut rate charter, and don't want/need their own a/c. Especially with prices where they are, I have thought about buying an a/c with a few others. However, NJA provides a safe, dependable and headache-free service. No hiring, firing, bills, maintenance. Our tough decisions are what to order for catering -- and I am being serious not my usual sarcastic self. I do agree with many of the posters that in time NJA will reduced the number of options in the fleet.

2. Other fractionals will be tough. In my opinion Flex and CS exist as an introductionto their respective manufacturer's products. It is akin to the heavily subsidized car leases. Eventuallay it catches up to the parent company and you need to be able to justify the existence. I think CS (now as Citation Air) is branching out. I think the market is ripe for very dependable, price sensitive, heach-ache free,safe charter. I have not studied the new CS business model but maybe they are trying to capture some of that. I think that Avanair has a good service for some people. There are many who need/want private aviation for short hops and thir product does seem to be in a sweet spot. Great for personal use: Bahamas, Florida, Nantucketm, Martha's Vineyard, Eastern Long Island, Vermont; and for short but strange business trips --Trenton, NJ to Buffalo, NY, Macon GA to Birmingham, etc. Flight Options looks like it may have a good entry product with the Phenom based upon the costs I have seen.

3. Cards -- they will always exist in some form. They are a great intro to private aviation. I think card sales will decrease. In the good economy many people bought/received cards as bonus, gifts, etc., or just to treat themselves. I think a good bit of this market is gone for a long time. As I have said before, I think that cards are great for short term users or people who do not want, can not afford, or donot need a long term commitment.

The fractional business is by definition is very inefficient. Other than peak days, I get to fly when I want, regardless. There are many times I have flown into XXX airport in an Excel only to have another Excel take off within 1 hour of my flight for its passengers. Very ineffcient. If the model gets redefined to provide some incentive to owners to allow the operator a little flexibility in scheduling, the model can get much more efficient. There have been other times when I have done an out and back in 14-15 hours. That was best for my schedule. However, NJ had to swap crews and kept the same a/c for me. If I had some incentive maybe I wold make my meetings a little shorter. There are many times I would be flexible by an hour to 90 minutes from some savings, and sometimes when I can not.

I actually only see marginal growth coming becuase of the airlines. Over the past decades the airlines have done an awesome and incredible marketing job for private aviation. Other than someone who has not yet had the wealth to travel privately, all the juice has been squeezed from the airline orange. Ober the past 10 years if someone has had the $$ and has had the inclination to travel privately, they have made the switch. However, there will be some marginal sales from people who have had the $$ but not the inclination, but now as they are getting a little older and have some health issues, do not want to deal with the airlines. I would save these people are 75+ and typcially fly from to and from Florida several times per year, and have decided to leave the kids and grandchildren with a little bit less inheritance.

I end withsomething I have posted for a while. Flying privately is a nasty addiction and probably one of the toughest to kick. Once people have the taste, they will do all they can to fly privately and maybe even sell the 3rd home to be able to fly to the 2nd privately.

Fly safe.

Wow! I feel so much smarter now. Thanks, rich guy! It's not often that I get to rub shoulders with a member of the very same class of people I'm so fortunate to fly around for a living. Thanks for the gift of your presence here today.

So tell me, is there some non-aviation rich-guy forum out there that I can join? Where I can serve as the token representative of the working class? If so, PM me.

Cheerio!