NetJets and FlightSafety report profits for 2004

[VmaxFlyR]

Quote:
Originally Posted by VmaxFlyR
Not sure about heresy, but how about a little of accuracy?

1) I lost that post from a "fellow pilot" regarding the 23%-40% raises so I can't post a link, but what you DON'T include in your recollection of that post is that the 40% raises are connected to a 6-6 schedule, which is about 7% more duty days that a current 17 day schedule...If one works more they SHOULD be paid more, no?

Suddenly that 40% becomes 33% comparing "apples-to-apples."



Correct me if I'm wrong, but isnt 50% of the current schedules 7-7, which works out to the same number of work days as the proposed schedule of 6-6?




Sorry...my Bad.

I meant 6 on-4 off schecule would require 7% more work days, recuding that 40% to an effective 33%...

Take into account COLA, what's left?

 

[Hogprint]

As for Marquis, hours are still hours. They buy 25 hours at a time and use it the same as regular owners....there is no additional wear and tear than a regular owner's 25 hours. Where I think Marquis does cause problems is that they add to the pre-existing peaks and increase the likelyhood of demand exceeding supply.

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Hours are not hours....They pay a premium I agree, but they are not paying any hourly fees or maint fees. It is just block time they pay.

I also disagree that there is no more wear & tear on the airframes. I think Marquis card holders have surpassed actual owners or getting very close (I'm not privy to any hard numbers, but I think I heard this in Recurrent) . If this is the case, now the hours flown has doubled. You know as well as I there are concerend owners out there. There is a lawsuit pending, hence the adjusted rules for Marquis.

I do agree with the rest of your analysis though. I have heard from the BB himself that they would like a dedicated marquis fleet. Don't have a clue how they would do this, but I guess that has been floating around the Death Star.

 

[dsptchrnja]

Diesel, You're right on with this one.

It costs X amount to buy fuel for the planes, so they pay it. It costs X amount to run your maintenance department, so they pay it. Catering, taxes, ramp fees, etc. They pay them. Ace

Diesel and Ace

You analogy only has legitimacy if pilots control their fees as do the vendors you mentioned. If that were the case then NJA pilots would just raise their fee for their flying services. But it doesn't work that way because you are an employee. Your guys are starting to talk as if you work for the union instead of the company.

NJA flight crews negotiate salary, they don't charge for services. The fact that it has taken this long is simply showing the ineffectiveness of having to do so (whether intended or not). You are witnessing the system at work the way it was designed, like it or not [insert sound of EVERYONE saying "not"].

 

[FamilyGuy]

Hours are not hours....They pay a premium I agree, but they are not paying any hourly fees or maint fees. It is just block time they pay.

I also disagree that there is no more wear & tear on the airframes. I think Marquis card holders have surpassed actual owners or getting very close (I'm not privy to any hard numbers, but I think I heard this in Recurrent) . If this is the case, now the hours flown has doubled. You know as well as I there are concerend owners out there. There is a lawsuit pending, hence the adjusted rules for Marquis.

I do agree with the rest of your analysis though. I have heard from the BB himself that they would like a dedicated marquis fleet. Don't have a clue how they would do this, but I guess that has been floating around the Death Star.

I was under the impression that the Marquis fees included everything but the capital cost of the aircraft....hourly fees, maint, etc.

Given how savvy Mr. Santulli is as a businessman I doubt that he'd sell a product and not cover his operating costs...

 

[FAcFriend]

I also disagree that there is no more wear & tear on the airframes. I think Marquis card holders have surpassed actual owners or getting very close


Marquis does not add anymore wear and tear to an airplane than any other owner. I keep trying to explain this concept here and noone is getting it.

I am an owner, I let my brother in law fly 1/2 of my hours, my aunt susie fly 1/4 of my hours and I fly 1/8 and my son flies 1/8. This equals one share.

Marquis is the same concept. No more hours than any other owner. No more wear and tear.

 

[Hogprint]

I also disagree that there is no more wear & tear on the airframes. I think Marquis card holders have surpassed actual owners or getting very close


Marquis does not add anymore wear and tear to an airplane than any other owner. I keep trying to explain this concept here and noone is getting it.

I am an owner, I let my brother in law fly 1/2 of my hours, my aunt susie fly 1/4 of my hours and I fly 1/8 and my son flies 1/8. This equals one share.

Marquis is the same concept. No more hours than any other owner. No more wear and tear.

I agree with your airframe breakdown, but I was talking about overall volume.

They are pushing over 100 marquis cards a month if the marquis sales guy is to be believed. We are selling off 25-30% flights every day?! Over half my flights now are Marquis.

I see the common denominator here as the big M. Bring me back to the fold FacFriend if I've strayed.

 

[El Chupacabra]

That is how it is supposed to work but... my CONSPIRACY THEORY is...

The shares sold as cards are not new airplanes purchased but that is how we sold off the Core Fleet and resold the Buybacks in used airplanes. The increase in flying is GREATER than the increase in airplanes.

Also it is absolutely correct what I think Dispatcher said.... The more the shares are broken up into smaller pieces... there are more folks wanting to fly on the peak periods. this compounds the PERCEPTION of the situation

 

[FAcFriend]

but I was talking about overall volume.

Not sure what this means, hoggie. But the overall volume does not change the problem comes (see El's next post) on peak days when everyone wants to fly at the same time.

This has been changed. Marquis cards only last a maximum of 12 months. So with the new marquis rules some of the problems with this growth will be short lived.

The good part of the program is it offers a great opportunity for growth. Gets NJ into markets they would never be in otherwise. Really it was a genious idea and has been duplicated in yachts already.

El- I believe you are correct that NJ sold off the core fleet as demand rose. Now NJ has a new core fleet on order. The choice was- cease selling to new customers for awhile or sell off the core fleet.

What would you have done?

 

[El Chupacabra]

What would you have done?

I would have given the pilots a raise.

But besides that I would not take the ludicris position that business is so good we are losing money on selloffs and we can't afford pilot raises... because we sold more than we can deliver.

 

[FamilyGuy]

Not sure what this means, hoggie. But the overall volume does not change the problem comes (see El's next post) on peak days when everyone wants to fly at the same time.

This has been changed. Marquis cards only last a maximum of 12 months. So with the new marquis rules some of the problems with this growth will be short lived.

Friend - I hope the new marquis rules will help with the capacity problems. The increased peak period days is a good start, but you still have the fundamental problem that 1 half share owner = 16 marquis card holders. Odds are that when that 1 half share owner wants to fly over thanksgiving weekend, 8-12 of the marquis owners will also want to fly.....that's where the strain on the system becomes evident. Bottom line is that a 12 month limit doesnt eliminate this problem....increased peak period days helps, but it remains to be seen how much.

The good part of the program is it offers a great opportunity for growth. Gets NJ into markets they would never be in otherwise. Really it was a genious idea and has been duplicated in yachts already.

Agreed. The program is revolutionary, and was a boon to us during the slow period from 2002-2003 and the first half of 2004. But in a period of high demand - last half of 2004 - I think it caught us flat-footed.....

Even though its popular on this board to expect management to be omniscient, in all fairness I think it really is hard to manage inventory in this market segment.....think about it...you have to order planes 2-3 years out, yet your demand can turn on or off in a couple of months....add in the fact that your basic product costs tens of millions of dollars, and it gets really scary to order hundreds of planes at a time and hope that demand will materialize....

El- I believe you are correct that NJ sold off the core fleet as demand rose. Now NJ has a new core fleet on order. The choice was- cease selling to new customers for awhile or sell off the core fleet.

What would you have done?

There's the other problem....as a company we've never learned to tie sales to the aircraft deliveries.....its always been sell as fast as you can. Now we are in a situation (like 1999-2000) where demand exceeds supply.

It is hard to say no to a sale....in 99-00 we didnt have Marquis and were able to overcome the negative impressions from increased sell-offs because we had a 5 year contract to make things up to an owner....with Marquis, owners are forming their opinion in 25 hours and deciding based on that experience whether they want to renew or not.....