Net Vs Flex

[gunfyter]

Non-union Flexjet announced that they made a "modest" profit in 2005 and a "slight" profit in 2004. Union shop NetJets, which just inked a very expensive labor contract, lost $40 million through third quarter 2005 and lost "a lot" of money in 2004 according to CEO Richard Santulli.

Flex is also aggressively seeking to increase market share by undercutting NetJets share pricing and developing aircraft point designed for the fractional market such as the Challenger CL300.

Citation Shares (also non-union) is the most rapidly growing of the fractional providers.

Good luck with your decision.

SS






`

NJ lost money because they did not have enough airplanes or Pilots.... Can't get them fast enough. If I had to lose money in aviation that would be the reason I would want. With 76 aircraft deliveries scheduled for 2006 and near 500 pilots coming on board. ... The solution is at hand.What is called an exensive labor contract is really a bargain for the company. The efficiencies and flexibility in scheduling gained by the company are huge. With the raise I received I also got 14 to 18 more work days per year. 10 to 15% MORE flight availability. 150 hours flown in 2 months of 2006.Another way to look at it is an average of 60 to 70 hours more flying over the extra 14 days. At more than $8000/hr charged to jet Card owners if only 40 hours were occupied... there is an extra $320,000 in revenue flying per Citation X pilot! Or TEN times the recent raises in the new CBA.Without the new CBA if the 40 revenue hours had to be sold off to Charter.... would cost much more than the pilot salary increases of the CBA. So expect to see the $85 million in charter costs go down to near nothing soon.Also mistated is the performance for 2004. A 10 million dollar profit was made by NJA but more than offset by losses in Europe. That was the lot of money lost. Not in the US where money was made.
....................What NJ is building is a giant network. Can you hear me Now? Like Verizons' cell network. Its nice to have a cool phone ... but like the (VERIZON) commercial says... ITS THE NETWORK. Can You Hear me now? Its nice to have some cool Jets. Most of the frax do.... BUT.... Its the NetWork ............................................................................................We've had Dumb Competitors in the past and they bleed. We've got more blood than they have....

 

[Going2Baja]

Excellent post gunfyter! With all of your research and knowledge I hope that 1108 is using your services!! Keep it up!

Baja.

BTW - Oh yeah - Go to Netjets!

 

[buttercup]

Excellent post gunfyter! With all of your research and knowledge I hope that 1108 is using your services!! Keep it up!

Baja.

BTW - Oh yeah - Go to Netjets!

True dat! Gunfyter is a smart guy even if he is from Texas, but that's probably because he is a New Yorker origionally.

 

[GEXDriver]

NetJets Pilots have a more generous OT, Extended Days Pay, After Midnight Return policy than FlexJet pilots do.

Is it any wonder why you lost $40 million in 2005 and FlexJets made a profit?

I believe FlexJet furloughed pilots in the past.

With your new CBA you've made furloughs possible for yourselves if there is a down-tick in the economy or a further increase in NetJets' losses. You've become expensive help and a sizeable portion of NetJets' operating costs.

A 10 million dollar profit was made by NJA but more than offset by losses in Europe. That was the lot of money lost. Not in the US where money was made.

While this was partially true in 2004, it's not the case for 2005. NetJets domestically lost a wad of money in 2005, in part due to labor unrest.

Anyone who's been in an FBO in the last year has heard you guys challenging each other as to who could ground their airplane for the most asinine reason or calling out to your cohorts "Remember, fly Long Range Cruise!" as they headed out to fly. Even though the CBA is signed, that anti-company attitude seems to prevail among a lot of your pilots.

 

[gunfyter]

My understanding is Flex made a profit due to the fact that the buybacks went on bombardier's books...

 

[Majik]

With your new CBA you've made furloughs possible for yourselves if there is a down-tick in the economy or a further increase in NetJets' losses. You've become expensive help and a sizeable portion of NetJets' operating costs.

Let's see, NetJets owns some buildings and maybe a few core aircraft. I'm shocked that you think it strange that labor is a sizable portion of NetJet's operating costs. Are you sure you don't want another chance to re-think that statement? I guess by your logic we should have fought for a pay cut instead of a raise. Glad you ain't managing anything I have an interest in.

Even though the CBA is signed, that anti-company attitude seems to prevail among a lot of your pilots.

Yeah it does seem, after management's 4 years of delay tactics, although legal, that many of the pilots didn't instantly forgive and forget. Who-da-thunk???
Especially since management seems to be a little slow on complying with some of their promises in the current contract. Maybe that was bad strategy on management's part. Maybe negotiations will go better next time. Maybe they won't. I think we left a lot of money on the table but, since I like the job and the money's much better than it was, I'll stay where I am and keep doing what I'm paid to do. I'm complying with every word and paragraph of the CBA. I just wish the company wouldn't make me file a grievance every time I want to get them to live up to their end. Probably one of those things you would never understand unless you were in our shoes.

 

[gunfyter]

Expensive help

You have think before you type.


An $80 million loss for 2005.


Thats 2/3 of the amount of the entire pilot payroll.

So if we cut the payroll for pilots from $120 million to $40 Million we could break even!

So instead of a Year 7 Citation X captain earning $67K, I should have earned only $22K?

Is that your solution GEX?

 

[ultrarunner]

You have think before you type.


An $80 million loss for 2005.

How long do you expect Warren to stay in the business if losses of that magnitude continue?

 

[gunfyter]

How long do you expect Warren to stay in the business if losses of that magnitude continue?

How long do you expect him to stay in business paying $22K for Jet Captains?

My point was to show the losses have nothing to do with pilot salaries.

Actually they do. the salaries were too low. I predict a massive improvement in profits now that pilot salaries have improved.

Don't you realize the reason we have a new CBA is they could not sustain further losses and decided they wanted to make money instead?

The old CBA was too inefficient for the company. In the last 2 months prior to the TA being reached... I had only 2 hours of flight time. In the first 2 months of this year on the new CBA I have 150 hrs. The increases in efficiency of the new CBA over the last are spectacular!

If I had some money... i'd be buying NJA stock right now.

 

[Majik]

How long do you expect Warren to stay in the business if losses of that magnitude continue?

I predict Berkshire Hathaway will close its doors if NJA loses another $80 million, lol...

My wife charges me $300/day to park in our garage. She charges me $150 for every beer I get out of our refrigerator. My personal balance sheet looks pretty dismal but hers is great. So far the overall (household) balance sheets look about the same.

 

[BrnJetFuel]

Sounds like an honest question to me.

If he really has to ask, I'd say go to Flex! Prefer to have someone of you're intelligence working for our competition.

 

[Ultra Grump]

My wife charges me $300/day to park in our garage. She charges me $150 for every beer I get out of our refrigerator. My personal balance sheet looks pretty dismal but hers is great. So far the overall (household) balance sheets look about the same.

LOL! Good analogy!

 

[GEXDriver]

You have think before you type.

An $80 million loss for 2005.

I think before I type. What I think is that revenue, EBITA, and loses for business is like oxygen for you - if you lack just one percent of what you need you still die.

Unions in their current formulation are an anti - productive force ill-suited to commerce in the global economy of the 21st century.

The typical union mantra of, " How can we do less, with more people for more pay" is killing companies accross America.

Your group is not the first bunch of pilots to demand more money from companies that were losing money - Eastern, Braniff, PanAm, Delta, Northwest and United come immediately to mind - leaving the companies with the Hobbesian Choice of dying now or dying later.

 

[Abbey]

NW contract was in 1998, way before the "big loss" days. Since 2001, I believe the average NW pilot is working for about 25-40 percent less than that contract says. And guess what.....they are still losing money and are now broke. Maybe NW has more problems than just the greedy pilots?

 

[G100driver]

Your group is not the first bunch of pilots to demand more money from companies that were losing money - Eastern, Braniff, PanAm, Delta, Northwest and United come immediately to mind - leaving the companies with the Hobbesian Choice of dying now or dying later.

Nice choice of words though I think most people think that you are talking about a stuffed Tiger

However, both United and Delta were making money hand over fist when the pay raises were asked for and implemented. These groups did not "give back" in the same fashion that the companies did not "give out" during the good times.

Not making excuses for poor union leadership, but let's get real. Until companies are going to start be responsible with the SHAREHOLDERS money (no more golden parchutes for incompetance or excessive salaries for a few select employee's) unions will continue to see justification for their actions.