Netjet Profit 143 million

[RNObased]

Don't mistake this as disrespectful to NJ, but: Have you looked at what NetJets charges their clients? If they couldn't make money at those client rates, I would be worried. Nothing against NetJets, but many of the NetJet-Setters could get the same product (safe transportation) with their local charter company, for 40% less than they pay NJ to do the job. Yes, some people need the NJ fleet flexibility. The good news is that rich america hasn't caught on to the fact they are getting ripped off in many instances by the big operators. ARGUS helps the cause convincing people to only fly NJ, Flex, etc. You guys deserve a big chuck of that profit, if it indeed is there. I hope the best for you guys - good luck!

AZT

AZ, no disrespect to you, but you don't know what you are talking about.
Having flown jet charter for many years before coming to NJA it is night and day. There is always pressure to keep the charter jet in the air. At NJA no such pressure, if it is broke I write it up. Never asked, "Are you sure it is broke???"

Alway the ability of NJA to cover trips after there is a write up is mind blowing. I wrote a jet up 1hr before departure a couple of tours ago, another jet was taxing in to take the trip before I was done with the write up paper work. Is that always the case, NO. But the owner gets where they are going in a timely manner, can you say that about charter??? Probably not.

 

[gunfyter]

I am disappointed FamilyGuy and YipPilot and Publishers have not chimed in with their comments....

Probably thought we would forget their predictions of gloom and doom.

 

[notaNJApilot]

We have the planes, it's the pilots that we were short on in the past...hence last year's hiring spree.
Does anyone know how much NetJets is worth? Let's say $2B. $143M out of a $2B company is 7% profit. Is that enough for Buffet to keep us? FWIW, wikipedia says Berkshire Hathaway "averaged a phenomenal 25%+ annual return to its shareholders for the last 25 years".

 

[DO-82 driver]

Don't forget that NJA is the biggest and the best in the fractional industry.

Buffet, or his heir, will never let that go.

This "cash cow" has alot of high quality milk in her.

 

[gunfyter]

If $2B invested then $143M is 7% return.

If $1B invested then $143M is a 14% return...PLUS the Appreciation of the asset from $1B to $2B if $1B was invested and the company is now worth $2B. Someone could probably figure out what the appreciation has been.

My house appreciated more than the total of alll the mortgage payments in the last 3 yrs but I have not received any income from it.... But I still think I am getting a good return.

I think Stocks trade normally at a company valuation of 15... up to 20 times earnings.

That would make NJ worth 143M X 15 = $2.1B to 143M X 20 = $2.8B.

If we could push profits to $200M to $250M ... then at 15 times earnings the company could be worth $3B to $3.75B.

BRK could increase in value $1B to 1.75B on NJ in just one yr. 50 to 80% Asset appreciation! PLUS the $200M in Income! Thats A LOT better than the 25% Berkshire returned on average!

I think this increase is achievable because there is a lot of inefficiency that can and will be reduced. I wish there was a NJ stock.... I could buy.

Mad Money KRAMER says BUY BUY BUY!

 

[FamilyGuy]

I am disappointed FamilyGuy and YipPilot and Publishers have not chimed in with their comments....

Probably thought we would forget their predictions of gloom and doom.

I wasn't aware that I had made any predictions of doom and gloom. Maybe you could show me where I did that?

As for my comments on the reported profit, I think the one important point no one has talked about is that ALL NetJets operations were profitable in 2006 - including Europe.

That fact, coupled with the great work of everyone - pilots, mx, flight center - is what drove the profit.

The challenge will be in following that performance up in 2007. For the first two months the availability is down and the break rate for the aircraft is up. That will drive more subcontract and reduce profits for the year.

 

[FamilyGuy]

If we could push profits to $200M to $250M ... then at 15 times earnings the company could be worth $3B to $3.75B.

BRK could increase in value $1B to 1.75B on NJ in just one yr. 50 to 80% Asset appreciation! PLUS the $200M in Income! Thats A LOT better than the 25% Berkshire returned on average!

I think this increase is achievable because there is a lot of inefficiency that can and will be reduced. I wish there was a NJ stock.... I could buy.

Mad Money KRAMER says BUY BUY BUY!

I like the optimism, but you're off base here.

Even if NetJets could increase profits to the $200-$250 Million range (very big if) that one year performance would not come close to matching the Berkshire 25% average annual return that Buffett has generated since 1964.

I do agree with you that there is still a lot of inefficiency around here that can be reduced. Things are slowly getting better, but there's still a lot of work to be done.

As for the NJ stock, why not buy the Berkshire B shares? Yes, its pricey at $3,644 per share, but with that increased paycheck and retro you could probably pick up a couple shares.

 

[gunfyter]

Oh ye of little faith....I am sticking with the 200 to 250 M $$$.B- shares. I don't think will go up as much as NJ stock would.As the training bottleneck gets fixed and the cost reduction of combining NJI and NJA will produce 10's of millions in savings.... Adds right onto the bottom line more directly than increased revenues.

 

[RTRHD]

Oh ye of little faith....I am sticking with the 200 to 250 M $$$.B- shares. I don't think will go up as much as NJ stock would.As the training bottleneck gets fixed and the cost reduction of combining NJI and NJA will produce 10's of millions in savings.... Adds right onto the bottom line more directly than increased revenues.

Step away from the crack pipe Gun. We have drug testing man what are you thinking?

 

[Avalanche]

Don't mistake this as disrespectful to NJ, but: Have you looked at what NetJets charges their clients? If they couldn't make money at those client rates, I would be worried. Nothing against NetJets, but many of the NetJet-Setters could get the same product (safe transportation) with their local charter company, for 40% less than they pay NJ to do the job. Yes, some people need the NJ fleet flexibility. The good news is that rich america hasn't caught on to the fact they are getting ripped off in many instances by the big operators. ARGUS helps the cause convincing people to only fly NJ, Flex, etc. You guys deserve a big chuck of that profit, if it indeed is there. I hope the best for you guys - good luck!

AZT

Nothing like a good charter broker to put you in a reputable local charter aircraft no matter your location.

 

[FLYLOW22]

Yes, its pricey at $3,644 per share, but with that increased paycheck and retro you could probably pick up a couple shares.

HA!! 1st of all we never got "Retro". We voted yes on a signing bonus.

I wouldn't characterize what we make now as at a level that would allow us to take "discretionary income" and buy BRKHTH B. Not at all.

 

[gutshotdraw]

If $2B invested then $143M is 7% return.

If $1B invested then $143M is a 14% return...PLUS the Appreciation of the asset from $1B to $2B if $1B was invested and the company is now worth $2B. Someone could probably figure out what the appreciation has been.

My house appreciated more than the total of alll the mortgage payments in the last 3 yrs but I have not received any income from it.... But I still think I am getting a good return.

I think Stocks trade normally at a company valuation of 15... up to 20 times earnings.

That would make NJ worth 143M X 15 = $2.1B to 143M X 20 = $2.8B.

If we could push profits to $200M to $250M ... then at 15 times earnings the company could be worth $3B to $3.75B.

BRK could increase in value $1B to 1.75B on NJ in just one yr. 50 to 80% Asset appreciation! PLUS the $200M in Income! Thats A LOT better than the 25% Berkshire returned on average!

I think this increase is achievable because there is a lot of inefficiency that can and will be reduced. I wish there was a NJ stock.... I could buy.

Mad Money KRAMER says BUY BUY BUY!

If memory serves (a dubious proposition at best), Uncle Warren paid less than $800 million for the company. Toss in a couple hundred mill for losses and the NJE start up, I'd say BH is in about 1.2 Bill. Company now worth north of 2 Bill and net earnings of $143 mill for 2006 and 150-200 mill for 2007....yeah, I'd say that's a pretty fair ROI.

 

[wolfpackpilot]

Its about time for flexjet pilots to come aboard the union of 1108 train.

Unions have very very little to do with a company's ability to make money. You cant install good management through a union.

Regardless of going union or not.... FLOPS will live or die by the actions of the management.

WPP

 

[fischman]

Unions have very very little to do with a company's ability to make money. You cant install good management through a union.

Regardless of going union or not.... FLOPS will live or die by the actions of the management.

WPP

I HIGHLY disagree with this. In my opinion, 1108 has a HUGE say in how much money NJA makes, or doesn't make.

 

[NETFLIER]

Wolfpack,

you couldnt be more INcorrect. Yes 1108 did get us more money and a better schedule ect. But they have also been the spearhead in alot of cost savings, from ideas on crewfood to proper scheduling of pilots to not pay overtime.

Unions work correctly for both workers and companies, but you must be a union first, and stand strong. We got 143 million to show for it. Are we perfect, certainly not, but we are now collectively striving for it.

Flexjet pilots need to bond and not continue to fall prey to their management. PBS, please. 18 hour duty days, come on. Calling you durring rest, barf! pilots paying for their benefits, yada-yada bogus.

A better future is just a click away www.ibt1108.com

 

[FLYLOW22]

A better way to describe IBT 1108s effect on profits is better done by the statement, "A union has allowed the company to waste less money on inefficiencies in spite of it's (NJAs) own incompetence."

It isn't a question of how much money was made. The same amount will be made by revenue opportunities. Waste... waste (expenses) is the key here.

 

[captain dad]

I flew nearly 40 hours in the seven days over President's day. I know there are sell offs but with more A/C and pilots comes even better coverage. Just look at any Signature ramp and it is evident that NJA is and is going to be the biggest and the best for a long time to come.

You do get what you pay for. At least with NJA it's true. Safe transportation is a foregone conclusion. The most highly trained pilots in the industry that NetJets created back in 1964. People pay a premium here to get premium service and flexability in a 14+ type, 400+ A/C fleet. Add to the fact that people like to go with a winner doesn't hurt the cause either. It is what it is and it is only going to get better.imp:

Are you kidding me? It seems every Peak day there is a meltdown across the system with very high sell-off rates. Take a look at the recent Presiden'ts weekend, for example? Do you fly on Peak days? How often are you chartered?

 

[netjetwife]

I am disappointed FamilyGuy and YipPilot and Publishers have not chimed in with their comments....

Probably thought we would forget their predictions of gloom and doom.

Dish up that crow GF and I'll pass it out... Many of us kept insisting that the money was always there. There's a big difference between "can't" and "won't" pay professional pilots the wages they rightly deserve because they darn well earn it. Kudos to GuitarGuy for giving credit where credit is due.

My posted prediction about the brighter future if/when Management learned to set ego aside and work with the Union to solve problems has arrived ... Change hasn't been as quick as we'd all like but it is happening slowly but surely. Especially in training....
Regards,
NJW

 

[netjetwife]

I HIGHLY disagree with this. In my opinion, 1108 has a HUGE say in how much money NJA makes, or doesn't make.

I totally agree. Other examples were given by NF, but the greatest savings that is also producing a superior product while cutting costs is in the overhaul of training. In the interest of giving credit where credit is due that is largely because of the efforts of the highly talented and very hard working Union Training Committee that has worked jointly with Management to affect positive change.

Aside from that, it's generally agreed by experts in labor relations (not to mention common sense) that well respected and fairly compensated employees are more productive. When the workforce is united in its goal the impact is even more noticeable.

Way to look sharp in those polo shirts NJ pilots...
Netjetwife

 

[hammer2]

Instead of Warren finding a new CEO he should hand BH over to the Teamsters!