NetJets--Earnings Release

[shroomwell]

I believe the losses are due in large part to the aircraft buybacks and inability to sell them again. They are largely paper losses until the aircraft is actually sold. If and when they sell the aircraft for less then they paid to buy out the owner, there is a loss. Basically if there is a change in the airplane market and prices go back up and Netjets is able to sell them, they will be taking the losses back in the form of extraordinary gains down the road. Of course there are holding costs to those airplanes as well.

 

[FastJP4]

Financially speaking that is a huge hit. Granted numbers are manipulated in every direction - but that is a huge drop across the board.

Hope things improve for us all - but I think it will be a loooooong time.

 

[F/O]

I love all the replies about how guys like harley are just throwing out unfounded crap to scare people, etc, etc. They are obviously written by guys that are comfortably senior while the junior guys are crapping their pants.....

 

[BeeDubya]

I also mentioned which entities were making money and which were not--take my word for it guys, I got that right too. I wouldn't count on it. Because of the management and support structure, what is more important than individual entities is the overall picture.

I also made a few more statements about furloughs. They are coming guys!.... Watch between Thanksgiving and the first 2 weeks in Jan for 300-500 pilots to go out the door. .... The blood letting is coming---operationally it will come relatively fast.... We'll see.

But I have a pretty good track record so far!

Now I have a question for the "in the know" union bretheren. If BH wanted to sell off assets from NETJETS---hypothetically let's say NJI (Okatie, SAV maintenance, etc.) to an outside buyer (think one that is no longer employed by Netjets or say General Dynamics or Gulfstream) could they? What are the limitations imposed by the CBA or LOAs that would prevent this type action? I also understand that multiple owners have the airplanes---could they not transfer the management of these aircraft if they so desired? I don't know the answers to these questions--just asking!

The conspiracy grows!

Could they sell NJI. Sure. If they fly NetJets fractional owners, by Section 1 of the agreement, the new company would become a charter provider and limited by CBA. Additionally, in times of furloughs, sell-offs are further limited. In other words, they would have to be a wholly separate entity. But there is nothing stopping them from selling the assets (for those assets they own) to someone else who could create a whole new competitor. I also see this scenario as highly unlikely. A single-type, large-cabin fractional? Considering that larger aircraft are having a tougher time in this market than smaller ones, I cannot envision anyone investing in that.

 

[fischman]

I'll offer $50 for NJI. One time offer. Take it or leave it.

 

[RTRHD]

Considering that larger aircraft are having a tougher time in this market than smaller ones,.

This part is inaccurate.

 

[RNObased]

GD has been playing for us for awhile. Good guess.

Wow, this is pretty far out there. Not going to happen, but is funny to read.

 

[sflax]

When things are bad you write off everything you can, who gives a crap if its 1 mill or 2 mill loss. But when things return to normal you are at an advantage at least in the numbers to show better performance and get the bounus. Lets say, you write off 2 mil this quarter, so you dont get your bonus and then next quarter your department breaks even, you just improved by 2 mil. Bonus time, or you could spread the loss out over a few quarters, only if you know you will be in the bonus each of those q's. You can't, so you slush it once, and collect later.

 

[fugazi]

Lmao...and,who cares if it's 349m?? Idk, the effin shareholders

 

[NJAowner]

Some of the losses reltaed to used a/c are on paper and may not be realized ever (at which point profits will be inflated) and the tranactions are a wash.

Generally, when you are holding th investory of jets for sale, the accounting rules will require write downs in the following situation. Let's say you bought back 20 Excel shares form owners at an average price of $500,000. Your cost is $10 million. If the market craters like it has, and you then resell 1 of the used shares at $300,000, you need to value the remaining 19 sahres ar $300k each, or $5.7MM. You will then be required to take a write down of $200k per remaining share (or $3.8MM) even if you continue to hold an ddo not sell the other 19 shares.

Also, while NJ has losses, BH may want to have more losses at NJ to offset gains elsewhere. It doesn't justify the losses, but may very well magnify them.

Fly safe.