NetJets Cancelling Orders

[fracman]

NetJets Canceling Orders

From yesterdays Wichita Eagle:

NetJets cuts some Cessna orders and delays others
BY MOLLY MCMILLIN
The Wichita Eagle

Cessna Aircraft Co.' s largest customer -- NetJets -- has canceled some of the aircraft orders it had with the Wichita jetmaker and put off delivery dates of some others.

"We're talking to all the manufacturers regarding when we'll be taking the orders we have," NetJets spokesman Kevin Russell said.

 

[mike]

New aircraft for sale, too.

ASO has a new (ferry time only) Hawker XP advertised with a QS number. The broker handles Netjets used aircraft and is showing new aircraft in inventory as of March '03.

 

[RJL]

With a name like "Fracman," you would think that you would post positive comments about fractional companies rather than negative ones.

With a name like "Fracman," you would think that you would want to be employed by NetJets, the only Fractional company that appears to have the ability and financial backing to survive and succeed long term.

Unfortunatley, it appears that Flexjet, Flight Options and numerous smaller fractional companies will have a very difficult year, even more so than 2002. Several smart, experienced, and educated people who have been in aviation for many years have told me that they think that NetJets may have one or two less competitors by the end of this year. For my job's sake (and your job's sake) I hope they are all wrong.

No matter what the news, I still think that working for NetJets is probably one of the most secure pilots jobs available right now. I am not too proud to fly a smaller and slower plane. I just want to work for a company that won't make me worry about the security of my job every day. Put me in coach, I am ready to play!

 

[SheGaveMeClap]

Very poorly said, RJL. If you aren't in the game, you can't POSSIBLY know how Flight Options, Flexjet, or Citation Shares is doing financially, or Netjets for that matter. It doesn't matter what you heard from some old opinionated codgers, you might want to keep your statements about other frax to yourself.

 

[RJL]

I do work for a fractional company right now, just not the one I want to- which is Netjets.

You don't need to be an expert in aviation to see the warning signs- just pick up a newspaper or look at the public financial filing reports. Bombardier (Flexjet) and Raytheon (Flight Options) and Cessna (Citation Shares) are all having major economic problems right now. When these companies look to cut costs and non-profitable business lines, it has been said (by many , including these companies themselves) that the fractional businesses may be a target (or at least several jobs at the fractional companies).

No one ever said that "reality" wasn't scary. It's OK to be concerned about the stability of your company and your job, I just don't want to be nervous or scared.

 

[fracman]

"With a name like "Fracman," you would think that you would post positive comments about fractional companies rather than negative ones."

Hey - I'm just posting the news as I find it, and topics that I think may be of interest to those who read this board.

As soon as I find some good news that is of value, I'll post that as well.

 

[FracPilot]

With a name like "Fracman," you would think that you would post positive comments about fractional companies rather than negative ones.

Why? You sure have been quick to point out negatives that you seem to believe regarding certain companies. You think that NJA is the perfect company? Sorry to disappoint you, but it's not. There is no "perfect" company.

Based on the fact that you are interested in employment at several of the frax, you would think that you would want to keep a little lower profile. Your interests and "information" seems to change day to day. Good luck - you're going to need it.

 

[fracman]

Looks like that might be VERY soon! 28 hours and counting down.

 

[Turbinehead]

Wow, RJL

I am losing some respect for you, RJL. I did not think you could be so negative after the quality information you have posted here on the fraction board.

Anyway, on the topic of Net Jet cancelling orders...this is good. This is very good.

Maybe now my favorite potential employer will be able to get more Excels, Soverieigns, and 10's!

Yippeee!

 

[Diesel]

Hey fracman why don't you post the whole article. It explains a lot more than that we are cancelling orders.

I'd post the whole article but our union weboard is down and i'm on dialup so it took me 5 minutes just load this page.

The whole article explains what's really going on.

When you cut and paste certain points the thread looks a little skewed.

Hey gunfyter can u get the thread i'm on the road

 

[fracman]

"Such changes are not unusual, Russell said. "It's a dynamic arrangement that we have with all the manufacturers."


Sorry I omitted this quote - so NJ is cancelling with "all the manufactures" - I guess that does explain things.

 

[FracPilot]

Hey fracman why don't you post the whole article. It explains a lot more than that we are cancelling orders.

I'd post the whole article but our union weboard is down and i'm on dialup so it took me 5 minutes just load this page.

The whole article explains what's really going on.

Maybe I'm missing something, but I didn't get much more out of it than Netjets has canceled some orders and delayed others with Cessna, and that they have agreements(and may be doing the same thing) with other manufacturers.

So what's REALLY going on? It must be in code or something.

I think the most important part of the article to understand is:

"With a downturn in the economy, all fractional-ownership operators have experienced a business slowdown, said JSA Research aviation analyst Paul Nisbet."

Relax, things will pick back up when the economy recovers. Hopefully that begins shortly after this very short war we are about to embark on.

Best wishes to our armed forces involved in this skirmish. I have a few friends that are over there now, and a couple more in the ANG being activated.

 

[flexlrpilot357]

It appears that even the mighty Netjets is susceptible to the economy. It just goes to show that the orders for "100 of these, and 100 of those..." are not really a true indication of what's going on in a company and in the economy. But they do make nice press releases. Remember when Avolar was going to buy every jet that the factories could pump out?

Now as far as some misguided comments about the health of NJ's competitors...

NetJets, the only Fractional company that appears to have the ability and financial backing to survive and succeed long term.

I can't speak for our brothers and sisters at Ratheon FlOps or whatever they're calling themselves these days (good luck to them all), but I'm happy to report that we (at Flexjet) have been in the black for over a year now, just barely, but in the black. That means revenues exceed expenditures. That's a good measure of financial independence and viability.

If you follow the financial pages at all, you know that Bombardier is not at it's best historical position. I'm not sure how the financial health of the mothership will affect Flexjet, but I am happy to report that the Flexjet division has been holding it's own. Sales are slow, of course, but the company works. I happen to believe in the modest and cautious policies, and I am cautiously optimistic that they will lead us in the right direction.

Does size matter? We're not grizzly bears fighting over food. I fail to see how our current modest percentage of marketshare really affects our "viability" - as long as we remain profitable, and we remain popular with our owners and manage to attract new ones, we're quite viable at any size. Do I have to refer you to to the case of AA, UAL, et al vs. Southwest?

On the other hand. the mighty Netjets, with the largest marketshare, the "backing" of Uncle Warren, and the "help" of the Teamsters, per Berkshire Hathaway's annual report, operated at a "slight loss" for the second year running. I wish all NJ employees the best (some of you are very good friends of mine), but I honestly don't see any 1000% raises in their future.

Making money is a very important thing for a company to do. I'm not doubting the long term viability of Netjets, I'm sure they can make money someday. I'm just giving a word of caution, "Pride goeth before the fall", as they say.

 

[cezzna]

You guys crack me up with your Ford, Chevy, Dodge arguements. Do you have Bad boy club stickers slapped on the windows urinating on the competitors?

 

[flexlrpilot357]

Cezzna, I hope that's not what you got from my post. If so, you missed the point.

 

[Grim Reaper]

The fractionals are nothing more than service providers in what is increasing a service based economy. The current economic condition is impacting the fractional industry as a whole. The customer base comes from the top 1% of the financial strata. Even those people watch their pennies, and personal jets are an expensive luxury whether you own one or own a share of one.

The Wichita Eagle article indicates nothing more than NetJets not taking aircraft it can not sell right now. There is no reason to accept delivery of an aircraft intended for fractional sale if you can sell it.

The article says nothing about the stability of NetJets or any other fractional. It takes a broad leap of imagination to say that NetJets is in serious trouble based on what is stated in the article: it is not. NetJets, as are all other fractional is merely responing to current economic realities.

 

[cgmason1]

It appears that even the mighty Netjets is susceptible to the economy.

Sounds like someone is jealous.

Fly Safe
Chuck

 

[flexlrpilot357]

Sounds like someone is jealous.

No, that's not it all.

 

[V1RT8]

Good for NetJets

Grim Reaper has it right. With as many aircraft on order as NJ has, to slow or delay delivery based on a reforecast of economic situations sounds like good management. It would be much worse to take delivery and not have the aircraft sold. That gets expensive real quick. All fracs have this option written into their contracts and take advantage of it as necessary. The buying power of the frac industry allows for this option. I would bet that there are several corporate and private operators that wished they had the same option right now.

 

[cgmason1]

No, that's not it all.

I'm just messing with ya.

I hope the best for all the frax.

Fly Safe
Chuck