Fractional growth for 2006

[Anis]

""Here's looking at you Kid . . . ""

Granted regionals hire FO's at less experience but RJ CA's usually have as much experience as Fractional CA's and make 30K less annually.

Kid, you're gonna have to show me the data on that one...I know Captains at Regionals who have topped out, and miss the mark by (roughly) 20K from Frac pilots. Again, generalities - not proven details. This is why we'll drive metal for our whole life.

 

[gunfyter]

Show me in black and white where NJ, CS, Flex or Flops is making money.

Yes it is in Black and White in the Berkshire annual reports that NJA has made profits.

 

[netjetwife]

I have no objection to overseas expansion, as long as, it doesn't come at the expense of the pilots and their families. Frac companies should pay the pilots they already have on staff, like the professionals they are, before hiring others.

 

[Nixon]

Yes it is in Black and White in the Berkshire annual reports that NJA has made profits.

from the Bershire Hathaway 2004 annual report (the latest one available at berkshirehathaway.com):

NetJets earned a modest amount in the U.S. last year. But what we earned domestically was largely offset by losses in Europe. We are now, however, generating real momentum abroad. Contracts (including 25-hour cards that we ourselves market in Europe) increased from 364 to 693 during the year. We will again have a very significant European loss in 2005, but domestic earnings will likely put us in the black overall.

The 2005 annual report will be posted at their web site later today.

 

[netjetwife]

In other words, NJA was carrying NJE. Their European counterparts were being subsidized by the American pilots that were paid less, although they generated more profit for the company. How much do you suppose a conglomerate like BH considers to be a "modest" amount?

I won't be surprised if NJA is free to report a greater profit now that the contract dispute is settled. If they don't, it's not because they aren't. It will mean that NJ Inc is still using NJA to carry their other companies. It should be easy enough for them to continue that unfair practice. After all, not all of the NJ pilots receive the professional wages that are their due. It is my hope that Flt Ops pilots will be able to raise the bar for the FOs in the industry. If each frac group takes a turn pulling, eventually, you'll all be able to stand on the high ground together.

 

[dime line]

Any of you who think that FLOPS, FLEX and Citation Shares are loosing money, prove it.

 

[gunfyter]

I would think NJ will show massive losses for 2005... due to the delay in getting the contract done with selloffs ... and having to pay many millions in back pay/ signing bonuses. This will not be a Normal year though.

 

[WillFlyFoCookie]

I believe over the course of the entire history of airlines in the United States there is a net loss....and that's with 50 years of government price regulation. I think running airplanes is one expensive business and that companies and individuals do it because those shiney jets are just so darn sexy!

 

[Nixon]

Warren Buffett's Annual Letter to Shareholders

The NJA pilots know the business made lots of money. The profits just weren't kept in America.

From Warren Buffett's Annual Letter to Shareholders (28 Feb 06):

Operating results at NetJets were a different story. I said last year that this business would earn money in 2005 – and I was dead wrong.

Our European operation, it should be noted, showed both excellent growth and a reduced loss. Customer contracts there increased by 37%. We are the only fractional-ownership operation of any size in Europe, and our now-pervasive presence there is a key factor in making NetJets the worldwide leader in this industry.

Despite a large increase in customers, however, our U.S. operation dipped far into the red. Its efficiency fell, and costs soared. We believe that our three largest competitors suffered similar problems, but each is owned by aircraft manufacturers that may think differently than we do about the necessity of making adequate profits. The combined value of the fleets managed by these three competitors, in any case, continues to be less valuable than the fleet that we operate.

Rich Santulli, one of the most dynamic managers I’ve ever met, will solve our revenue/expense problem. He won’t do it, however, in a manner that impairs the quality of the NetJets experience. Both he and I are committed to a level of service, security and safety that can’t be matched by others.

Nixon

 

[gunfyter]

Nixon,

This is no surprise for 2005.

"...solve our revenue/expense problem."

DONE! All he had to do was settle the pilot's contract. As an examply I have already flown a many hours in the last 3 months since the contract was finished as I had for the 6 months prior. A 100% increase in pilot productivity. Flying 55 hrs last tour alone.

 

[netjetwife]

That's right, GF. All those sell offs that they had bought ahead of time . I was forgetting about those. Now I remember the posts from the pilots complaining that flights were sold off while they sat in FBOs. The contract got settled before the holiday rush, but the arrangements had already been made. They found out that they couldn't break the pilots' will so things didn't go according to their plan, did it?

I said last year that this business would earn money in 2005 – and I was dead wrong.


Sell offs, signing bonuses, yeah, it added up didn't it. I agree with your analysis, GF. They knew all along they'd be able to fix the problem, and with the right persuasion they finally admitted that it was wiser to work with the pilots than continue to fight them. With luck (and hard work by the pilots) , the management at Flt Ops will look at the NJ example and come to that same conclusion, sooner rather than later.

 

[Crossky]

Kid, you're gonna have to show me the data on that one...I know Captains at Regionals who have topped out, and miss the mark by (roughly) 20K from Frac pilots. Again, generalities - not proven details. This is why we'll drive metal for our whole life.

To be clear, my position is its factual that the average Regional CA and FO, year for year, gross less that their professional counterpart at the average fractional. I think we agree, my first post might have confused you.

 

[Sparse]

Nixon,

This is no surprise for 2005.

"...solve our revenue/expense problem."

DONE! All he had to do was settle the pilot's contract. As an examply I have already flown a many hours in the last 3 months since the contract was finished as I had for the 6 months prior. A 100% increase in pilot productivity. Flying 55 hrs last tour alone.

How many of those hours were occupied hours? The tour I just finished was 19.5 which 10.7 was occupied. 55%. In my view the key is to increase the occupied hours.

 

[gunfyter]

Almost all were occupied hours.... like 85% FO barely flew and many days did not fly.

 

[Semore Butts]

Why didn't F.O. fly?

Is there a new rule I'm missing?

 

[Diesel]

After 2 days and 15 plus hours we've had only 2 hrs of unocupied.

We both prefer to stay in our seats just swap every leg pax or not.

Gunfyter might have been flying with a newhire who's not allowed to fly pax legs.

 

[gunfyter]

Thats correct. Did not have 50 hrs just off IOE.

 

[piaggiop180]

where i work we just got a large pay increase i to worry about the long term viability of the company i work for. with unions putting more and more pressure on these companies it is only a matter of time before we are all out of work. no problem for the union they dont have to give back any of the money they received. with NJ reporting huge losses makes you wonder how long they will let it survive.

 

[gunfyter]

Don't worry 180.

Pilot salaries are a TINY part of the revenues and expenditures. Will have no effect at all on the viability of NJ.

Waste and Scheduling problems if corrected will guarantee profits.

 

[Number$Cruncher]

Stick to the front office, not the back office

Any of you who think that FLOPS, FLEX and Citation Shares are loosing money, prove it.

This comment is silly. That'd require inside information, and a violation of the securities laws. Convenient, perhaps, but true nonetheless. If you really want to learn firsthand how much your company is making (or not making), get a job in the finance department.