Hold on tight

[Chewbacca]

Well, that doesn't look too good for the CitationAir folks. Good luck to all!

 

[johnsonrod]

"Ricci told AIN that Flexjet LLC will operate separately from Flight Options, with the former being a luxury “bespoke” fractional provider flying newer aircraft (four years old or less) while the latter will be the “value” fractional with a fleet of mostly pre-owned or remanufactured jets."

Now that makes more sense to me - no way was Ricci going to give up his Beechjet Nextant operation. I can see him putting 40 of those remanufactured Beechjets (plus maybe remanufactured Hawkers next) into the adhoc charter/card market.

Another question will be the fate of the Embraer (Phenom and Legacy) and Citation X products... Why would they compete with the Flexjet program for a similar customer base? I can see the revamped Beechjets competing hard at the lower end of the spectrum, but the newer Phenom 300 would be competing with the Lear 75s - right? And the Legacies will be competing with the CL350s... Obviously too early to speculate.

 

[gret]

Maybe I'm reading too much into it, but what the PR never says is that Flexjet is being sold. However, it is Flexjet's activities that have been sold for $185 million. What does "activities" really mean? Honest question. There is obviously some legalese going on here.

It is the business (assets, liabilities, work force in place, etc) that has been sold. The legal entity remains with the seller as a shell.

Normal structure so that any unasserted claims or liabilities don't follow the assets to the buyer. Also the structure is used to maximize the tax benefits to the buyer which may not be available if they bought the legal entity.

 

[gret]

Hold on tight boys and girls--big changes coming to the fractional industry. Sorry I can't go into details now, but all will be revealed very soon.

Good scoop...don't like these types of teases, but you delivered the goods.

 

[Rupert.]

not exactly. Flex will remain separate company

This is what happens when you get butt f#%cked on scope. Nice job to those that negotiated our contract. KR has to be laughing his azz off about now.

 

[Fresh Air]

It does seem to be a NJA/NJI situation shaping up. Should be an interesting scope battle.

 

[ProFracPilot]

Nevermind. The definition of "Parent" contained in Section 1 doesn't extend beyond Flight Options Holdings II, Inc (i.e., Directional Capital is free to do as it wishes).

 

[rsm]

First Officer at flex make more than a 15 year Captain on the Gulfstream. Somebody is gonna benefit or someone is going to get screwed.

Flight Options PAYSCALES

CAPTAIN PAY SCALE (Monthly)
Year Gulfstream Large Mid Small 15 8050 7688 7325 7325 14 7850 7488 7125 7125 13 7650 7288 6925 6925 12 7550 7138 6725 6725 11 7450 6988 6525 6525 10 7350 6888 6425 6425

 

[BlueNose]

But wait, there's more

This is what happens when you get butt f#%cked on scope. Nice job to those that negotiated our contract. KR has to be laughing his azz off about now.

I don't see anything about Jet Solutions, LLC in this deal. Flex doesn't have a 135 certificate (can't since it was foreign-owned). So all the Flex pilots have an agency agreement with Jet Solutions, who holds a 135 cert and is the operator of record for any 135 flights. No need to keep up this charade, and no need to get Flex a 135 certificate, thanks once again to 1108's magnificent scope clause. Here's one more guess how this plays out.
Every Flex pilot can now sign an agency agreement with Flight Options, who can be the operator of record for 135 flights. So Options maintenance program (and mx centers) covers the Flex fleet, the DO and Options training dept take care of training, OCC schedules and dispatches all flights. Kenn makes money by cutting overhead significantly since he's now paying himself for these outsourced services. Flexjet becomes the grandaddy of all brand partners.
You might think the pilot contract would have something to say about that, but that pesky scope clause doesn't quite get it done. Every brand partner flight does indeed count the same as a charter sell-off, but, oops, the scope clause contains absolutely no limits or penalties for sell-off, so there's no limit to how many flights can be outsourced, all without bringing another Options pilot back on the property.
Matt and his buddies were so pleased with themselves when Kenn personally flew in and sat down with them to negotiate the scope clause. They rubbed shoulders with the Bid Dawg, and were smiling so hard that they failed to notice their bleeding rectums when they walked out of the session.

 

[Club ORD FO]

Does either Flex or Options "win" from this agreement? I think we are all nervous. Not sure who is getting (going to get) shafted more.