fractionals' future

[NiteWitchWanabe]

On and off for the past three days, I've been following the postings on fractionals. I'm not a high-time pilot, but during my flying experiences over the past 15 years, I've been fascinated by the whole concept of fractional ownership of aircraft. I've watched from the sidelines as the fractionals were born, then boomed in the ensuring years, finally to plateau in the recent year. Since you folks are on the front lines, so to speak, I thought some of you might have some throughts on where the fractionals are headed over the next five or ten years. Will there be a weeding out process among the providers? Will others join Netjets in finally turning a profit? Thanks for sharing your thoughts!

 

[RedEye1]

NetJets is going down. Avantair www.avantair.com is where it's at, the P180 can do the same job at 1/2 the cost to the owners.

 

[El Chupacabra]

Fractional seem to be evolving to higher percentage of Jet Card Ownership rather than fractional owners. Will continue to grow as long as the US economy grows. Rich class are doing better than ever according to WB.


JetCards grow despite the fact that its most expensive option. Its standard product and BRAND recognition. Just like when you drive on a long trip and its time to stop at a restaurant for the family to eat. I might want to try one of the local places but its hard to get everyone to agree unless you instead stop at a Chain franchised place. You know what you are going to get. Next door might be better or worse but you have no idea because you never heard of it.

 

[G100driver]

NetJets is going down. Avantair www.avantair.com is where it's at, the P180 can do the same job at 1/2 the cost to the owners.

I guess that was a joke Last time I was in Kona I did not see any P180's there. I did however see seveveral P180's making fuel stops going across the country.

 

[GVFlyer]

I think the entire fractional industry is in transition to becoming large block charter operations - witness the success of the card programs such as the Marquis Program. There is no economic benefit to ownership if one cannot place the aircraft "in trade" as many private fractional owners are restricted from doing. With card programs there is no large capital outlay, no vagaries of residual value based on market conditions, and no forced interest in a company that is managing and sharing your expensive asset for you - less hassle for a small premium.

GV

 

[El Chupacabra]

GV

I agree with you. My question is currently most of the airplanes are property of fractional owners such that Fractional operator has little aquisition costs. As the trend to cards continues ... The fractional will have to pony up the monies for aircraft purchases out of their own capital. Will this work? At $8400 per hour for a X ... I think so. What do you think?

 

[Kingairrick]

I agree with GV. The variable is the current Netjets situation. If there is a strike there. I believe that major changes will happen fast.

My reasoning goes: What is important to Netjets Management? The customers. Period. That's who writes the checks.

I think they will fire the pilot group and start over. If they cave to the pilots, they will be perceived as weak managers to their customers, who, after all, are captains of industry. Not the most Pro-labor group as a whole. This is to whom Netjets management must be accountable.

Threats of "scab" have no history of discouraging pilots from taking jobs left behind when a strike happens. They WILL be replaced, probably by pilots dumb enough to fly a jet for $28K. Are there any of those around?

Management will charter as many as they can to inconvienence as few as possible while they are in the re-start process. However, many, many owners will be royally pi$$ed off. This will cause them to look at other options. There are no shortage of charter/management companies willing to step in and promise these angry owners the world, for less...

Those customers will be lost forever from the fractional world. The conversations around the lunch table at the Yacht Club won't be selling many new owners either.

As always, my .02

 

[h25b]

This brings me to my question so excuse my ignorance of 91K ... How far off of Part 135 is this anyway. I can't see an operation of mostly Marquis Cards operated as 91K instead of 135 ?

 

[x402]

This brings me to my question so excuse my ignorance of 91K ... How far off of Part 135 is this anyway. I can't see an operation of mostly Marquis Cards operated as 91K instead of 135 ?

Marquis=135 period. Resale of owner share/lease.
91k owner travel.

 

[h25b]

Marquis=135 period. Resale of owner share/lease.
91k owner travel.

That's what I thought... Operationally speaking is there much difference ?

 

[Geronimo4497]

That's what I thought... Operationally speaking is there much difference ?

Not that I can tell, and I fly for a stictly 91K operator. So long to those 18 hour duty days, although some of them were fun, depending on the destination.....

 

[El Chupacabra]

I think they will fire the pilot group and start over.

There you go. You cracked the code. This is exactly what is about to happen.

 

[ProFracPilot]

So long to those 18 hour duty days, although some of them were fun, depending on the destination.....

18 hour duty day? You describe "them" as fun? I would call them "dangerous". I'd guess you were so fatigued at the end of your 18 hour duty days that you were slap-happy and confusing it for "fun".

Think about it.

 

[buttercup]

There you go. You cracked the code. This is exactly what is about to happen.

Good let them fire everyone.. Then we'll seperate the men from the boys!! Just as is the case in life, the strong with prosper in other venues/companies!!

STFD!! Our salaries are keeping the bar down in the corporate world.. If they want to fire everyone and bring back pilot sluts who work cheap indefinetly it's not a place Id wanna be anyway!!

 

[dsptchrnja]

That's what I thought... Operationally speaking is there much difference ?

When 91K first came out NJA gave owners (not card holders) the option to fly their trips 91k or 135, it was up to them. When it started they were asking US which they should fly under because they didn't know themselves for the most part.

Operationally, the only thing they notice is that if they fly part 135 all POB have to show I.D. If they are 91K - just the lead pax.
-91K trips require a short statement during the safety brief that the trip is being flown under the direction of X but being operated by NetJets (something like that).
-Both 91K and 135 can have DAAP rules applied so they sometimes only require 80% of the rwy vice 60%.
-Both rules cannot exceed 10 hours cockpit time in 24 hours.
-Landing, T.O. and alternate mins are stated differently.

 

[El Chupacabra]

Good let them fire everyone.. Then we'll seperate the men from the boys!! Just as is the case in life, the strong with prosper in other venues/companies!!

Good thing I have my Teamsters card. I can replace my 7th yr X PIC pay tomorrow by hauling aggregate in a $150K truck vs the $19 Million jet.

 

[Geronimo4497]

18 hour duty day? You describe "them" as fun? I would call them "dangerous". I'd guess you were so fatigued at the end of your 18 hour duty days that you were slap-happy and confusing it for "fun".

Think about it.

I was being facetious.

I hate to admit it, but I think the FAA actually got a new rule set up the right way. Anyhoo, wasn't this thread supposed to be about the future of the frax business. The only way to fly, if you ask me; but I have a rather vested interest in our continued growth.

 

[NiteWitchWanabe]

Thanks, Geronimo4497, for bringing this thread back to base. I don't think you're being facetious when you say that frax is the only way to fly, but given the many alternatives available -- including the card programs, charter and the up-and-coming new segment of flight with the VLJ -- don't you see fractionals entering a period of slow growth at best?

 

[Geronimo4497]

The way I see it, charter card programs, for the most part, are fractional operators. The VLJ segment is a long time coming and in reality, why would someone or some corporation with travel money to spare want to spend it cramed in the back of some machine no bigger than a Malibu?

I'm sure that it will take away from the business segement somewhat, but from what I see at my place of emloyment, things are growing steadily, but not at a rapid rate. I personally like it that way.

Steady Growth=Happy Employees=Future Business.
IMHO

 

[NiteWitchWanabe]

Point well taken! Thanks!

 

[Starman]

Ever notice that the long list of company supporters and doom prognosticaters all have registered on this forum since the TA failed? We've got a ton that have shown up in the past 30 days to tell us how unrealistic we are. What a bunch of tools.

 

[FamilyGuy]

Ever notice that the long list of company supporters and doom prognosticaters all have registered on this forum since the TA failed? We've got a ton that have shown up in the past 30 days to tell us how unrealistic we are. What a bunch of tools.

No, I would use the term TOOLS to describe those members of the union that go on a public board to b1tch about the company, try and sling union propaganda around to convince other company employees to support their rantings, and then express surprise when the other employees dont support them.

If you want to b1tch, fine, but do it on your own union board. nobody else wants to hear it.

If you come on a public board and complain dont be surprised when people point out the falsehoods and half-truths. Its these actions that cause other people to register on the boards so that they can counter your rantings.

 

[some_dude]

Isn't it a rather large premium, though? More than double the typical block charter rate from any other charter operator.

I know, you only pay for occupied legs, but even factoring that in it still looks to be much more expensive for most uses.

If the fractional industry goes more toward block charter, will that bring the jet card rates down to be more in line with the traditional charter industry?

Just wondering...

With card programs there is no large capital outlay, no vagaries of residual value based on market conditions, and no forced interest in a company that is managing and sharing your expensive asset for you - less hassle for a small premium.

 

[AA717driver]

I think the frac/card business will boom in the coming years. Anyone who travels by airline can understand why someone who doesn't HAVE to do that will go frac/card.

I personally don't see the NJA contract paying $125k/year. But I certainly don't think they should make what they are now. But WTFDIK, I've been wrong about most things I've predicted so far in my career...

NJA won't fire them or let them strike. JMO.TC

 

[CandyMan]

It is illegal for a company to fire a unionized group of employees. This won't happen.


They may however be able to shut down and crank up as a non union company and ask the pilots to work for the new company. If this happens I don't see many pilots crossing the picket lines at NJA.

 

[Kingairrick]

It is illegal for a company to fire a unionized group of employees. This won't happen.


They may however be able to shut down and crank up as a non union company and ask the pilots to work for the new company. If this happens I don't see many pilots crossing the picket lines at NJA.

I didn't know that it was illegal. I was thinking of the controller strike back in the 80s where Reagan fired them all and hired new ones. They were federal employees. Maybe that's the difference?

Just my .02, I believe that there will always be scabs who will cross the lines. This opinion is based upon the history of airline strikes. I know it seems crazy to cross the line for the pay they would get, but there are pilots out there who just want to fly airplanes without props at any cost...

 

[Starman]

If you want to b1tch, fine, but do it on your own union board. nobody else wants to hear it.

Actually, the pilots out there thinking about applying here are very interested in our posts. Seeing as how the pilot recruitment office can't get anywhere near enough qualified applicants, our posts are being effective in reaching the people we want to reach. They see through the obvious ploy of one or two company management folks registering multiple screen names on here.

 

[transpac]

I didn't know that it was illegal. I was thinking of the controller strike back in the 80s where Reagan fired them all and hired new ones. They were federal employees. Maybe that's the difference?

It's illegal for a federal employee to go on strike, and the controllers were fired for breaking a federal law. In the Netjets case, a strike would be legal as long as the RLA process is followed. But, nothing says the company can't lock out the strikers and hire replacement workers until the strike is settled. This could be forever if they can find enough scabs.

 

[El Chupacabra]

But, nothing says the company can't lock out the strikers and hire replacement workers until the strike is settled. This could be forever if they can find enough scabs.

This would appear to be their plan.

 

[transpac]

el chup,

That might be their plan. But, I'm not sure how many new hires will cross the line for a what will likely be a temporary job (but a permanent title) for Netjets wages. UAL offered scabs $75,000 twenty years ago and didn't get many takers.