NetJets--Earnings Release

[brokeflyer]

Harley,

For the past three years I've been saying that the "industry leading contract" at NJ wasn't going to stick. There would be a correction, and when it happened it would be nasty. I've compared it with the industry leading contracts that the majors got in 1999 and 2000, only to see them collapse under the weight of bankruptcy and near bankruptcy in 2001 and 2002 when the economy slipped. Back then, everybody blamed the high-priced CEOs, not the incredibly high cost of labor or the fact that the unions wouldn't react in a timely manner.

These packages the union negotiated are kicking the daylights out of the bottom line at NJ. I call them golden parachutes, and while they don't meet the exact definition of them, that's what they are. They are paying pilots to give up there jobs and for not working. It's utter nonsense.

Don't expect any of these guys to treat you fair, they've never treated me fair. They think the union is the answer to all their problems, and I've been predicting this mess with the NJ "industry leading contract" for years. I've also said it's going to get even worse before it gets better, and that the contract would be adjusted substantially to come back to reality before it's over.

this is good...it will send a good message to management that they better start managing their company better.....i.e. pay your fcking employees or else.

as long as i get mine.

 

[B19 Flyer]

Unions hurt their own membership more than help them in the long run

If you really believe that the pilot contract is the fundamental flaw, then you must have failed basic math. Pilot salaries (and even contractual crewing ratios) do not begin to account for the losses reported by BRK. No salary cuts or contractual concessions would begin make up for reduction of sales and flying (well, maybe if you advocate that pilots fly for free).

I've noticed that all your criticisms of NJ revolves around the pilot CBA. Any consideration given to other staffing/payroll decisions made by management completely outside of the CBA? There are multiple facets of the business that have nothing to do with negotiated Union contracts. Any thought that these might also play a role in our current situation?

The part where I said the high cost has already come true. The overstaffing was a lot more than just reduced flying, there were more pilots on the payroll as compared to any other business model in the industry even before the downturn. As long as there was sustained growth, the company could handle it and as I've said ad nauseum, when times are good... everybody's happy. The measure of the union/company relationship is when times are not good, like now.

Now comes the part where the union will sacrifice members to maintain the "industry leading contract". When that is done and has worn itself thin, then will come the part where the contract is going to be opened or the health of the company itself will be placed into rough times. Then the cycle will be complete, and what I've said for years about how unions never change will be proven once again.

I've said for years on this board, that the "industry leading" contract was going to bite the butts of your union, and all I heard was that only rich people owned the airplanes and that those times would NEVER come. Over and over I heard that from the union mongers, and I held to my word that the contract was too expensive and held the industry standard too high for most to afford it. Once again, I was told I was wrong.

Now that the day has come that the union mongers on this board said couldn't happen, we are seeing these panic plans to buy out overstaffed pilots and put them on the street... at great expense to NJ. Unions are now calling it a victory, but at what price?

Right now, all these buyouts are doing is postponing the inevitable. There will be deep furloughs at some point and I hate to see that coming for anybody, especially a good company like NJ, but they can't afford to pay those wages and expect things to remain stable.

Over and over I've been saying that the "industry leading contract" would come back to reality, and those that were waiting it out at Flight Options would realize that the numbers that 1108 were looking for to match NJ were too high and that if they'd been more realisitic three years ago they'd have a contract by now. Instead, they company has remained in turmoil and still dealing with the a first contract that may never happen now.

Pretty much everything I said has come true, and it's not because I "predicted" it. It is following the exact same pattern that all the majors went through in 2001/2002 that had industry leading contracts. They were too expensive, and the union didn't budge soon enought and drove all of them either into bankruptcy or near-bankruptcy.

Mark my words BeeDubya, it will come to that at NJ too. The union doesn't seem to be smart enough to realize the longer they wait, the more cash burn is developed. That industry leading contract that you love will finally find a time where it needs to be opened and brought back to reality.. to the point where is should have been originally.

That grand contract will do more damage to pilot careers than help them, and if you remember, that's one of my biggest complaints about unions.... that unions hurt their own membership more than help them in the long run....it's already happening.

 

[B19 Flyer]

The measure of a union is how they work when times are tough

You mean b19/skanza fair.
IMO, you have no credibility b19/skanza.

The earth could stop spinning around its axis, and B19 would blame it on the Netjets CBA.

This is what b19/skanza gets paid to do.

Obviously, I don't care about your opinion, and it's pretty clear, neither does skanza. We are two different individuals, but are both smart enough to realize that unions are hurting pilots now more than helping them. Non union companies can react quicker to the marketplace and circle the wagons to stabilize themselves, union contracts prevent that. Have there been layoffs at non-union fractionals? Yes, but when it's all said and done, watch where the most turmoil of all happens, and that will be at the union shop.

And the answer is no, I don't blame everything on the CBA or how much pilots are paid. The fact is that unions will not react or treat their bretheren well during times like these, and more will be hurt than will be helped. Watch the upcoming months with NJ and see how bad it gets.

The measure of a union is how they work when times are tough, so far all they've done is get a deal that pushes the inevitable off for a while and costs NJ a bucket full of cash. I hope I'm wrong, but the worst is yet to come.

 

[jppt2000]

Obviously, I don't care about your opinion, and it's pretty clear, neither does skanza. We are two different individuals, but are both smart enough to realize that unions are hurting pilots now more than helping them. Non union companies can react quicker to the marketplace and circle the wagons to stabilize themselves, union contracts prevent that. Have there been layoffs at non-union fractionals? Yes, but when it's all said and done, watch where the most turmoil of all happens, and that will be at the union shop.

And the answer is no, I don't blame everything on the CBA or how much pilots are paid. The fact is that unions will not react or treat their bretheren well during times like these, and more will be hurt than will be helped. Watch the upcoming months with NJ and see how bad it gets.

The measure of a union is how they work when times are tough, so far all they've done is get a deal that pushes the inevitable off for a while and costs NJ a bucket full of cash. I hope I'm wrong, but the worst is yet to come.

Wow, how passive aggressive can you get?
From your previous posts, you have little regard for pilots.
B19/skanza/disingenuous/no credibility

 

[B19 Flyer]

You can't handle the reality of what's happening at NJ can you?

BeeDubya,

Why are you wasting any of your time with this guy? Try"ignore" like many of us have. It lends a lot more continuity to these discussions. Here's a thread talking about the huge loss of sales and precipitous drop in operational flying at NJ's, and all of a sudden this guy throws in that it's all the union's fault. Totally unrelated to what's being discussed, and actually makes no sense whatsoever congruent to what's actually being discussed, but he knows he'll get a rise out of someone on here.

Besides, the points you made have already been brought up with him ad nauseum in regards to many other companies. With him, it ALWAYS comes down to being the union's fault. He's a carpenter with only on tool in his belt. I'm sure if you asked him, he'll tell you the situation in the Middle East is the fault of unions. 9/11 happened as backlash from unions. The U.S. government is nearly bankrupt because of unions. Britney Spears is the result of unions. Blah blah blah blah.

Don't lower yourself to wasting time responding to him.

You can't handle the reality of what's happening at NJ can you? I responded to a post, it was relevent to the conversation.

Nothing is happening that hasn't happened before... a huge over-flated industry leading CBA is signed, everybody's happy, the economy goes to crap, the industry leading CBA gets corrected after crippling the company.

It's reality.... get with the program... it's gonna happen because you have a union on the property, it's as predictable as the sun coming up in the morning.

Oh, and the industy was crippled before 9/11, United, Delta and American had already stopped hiring and were getting ready to furlough based on the economic crisis. 9/11 simply accelerated what was happening already. It's reality, you just choose to place your head in the sand. It's repeating itself over and over, nothing new unless the pilots in your company were smart enough not to bring a union onto the property.

 

[B19 Flyer]

Wow, how passive aggressive can you get?
From your previous posts, you have little regard for pilots.
B19/skanza/disingenuous/no credibility

All my posts have done nothing but defend pilots and the industry. You guys defending unions are the ones that don't defend the industry, all you want to do is price it out of existence.

The simple fact that what is happening now I've been saying for three years is enough to lend credibility to all of my posts, and the fact that you refuse to believe it's happening to me is hilarious. :laugh:

 

[jppt2000]

You can't handle the reality of what's happening at NJ can you? I responded to a post, it was relevent to the conversation.

Nothing is happening that hasn't happened before... a huge over-flated industry leading CBA is signed, everybody's happy, the economy goes to crap, the industry leading CBA gets corrected after crippling the company.

It's reality.... get with the program... it's gonna happen because you have a union on the property, it's as predictable as the sun coming up in the morning.

Oh, and the industy was crippled before 9/11, United, Delta and American had already stopped hiring and were getting ready to furlough based on the economic crisis. 9/11 simply accelerated what was happening already. It's reality, you just choose to place your head in the sand. It's repeating itself over and over, nothing new unless the pilots in your company were smart enough not to bring a union onto the property.

Again no credibilty, there was a union on property long before you became a shill for your anti-union employers.

 

[clickclickboom]

B19 can spew all he wants but I remember back in 1999/2000 when I was a flight options pilot making $65000 a year. I was at the Jet Center in PBI sharing our two extra rudys crew meals with an netjets "EXEC JET " crew

I think they were on the Hawker 1000. The capt was making $45,000 a year to fly a plane that was twice as big as my beechjet.

All the pilots at NJA are guilty of was being fed up with industry substandard in every respect. They are still underpaid in my opinion.


Even mentioning pilot pay because of the global situation is foolishness. Netjets should look at this as an opportunity. Just imagine the situation that flops, shares, or flex find themselves in right now?

Can you imagine flops trying to cut the check to the shareholders right now?

 

[BeeDubya]

B19,

Please read my posts before replying to them. What you answered had nothing to do with what I stated/asked.

Brian

 

[jppt2000]

All my posts have done nothing but defend pilots and the industry. You guys defending unions are the ones that don't defend the industry, all you want to do is price it out of existence.

The simple fact that what is happening now I've been saying for three years is enough to lend credibility to all of my posts, and the fact that you refuse to believe it's happening to me is hilarious. :laugh:

The industry?
Who appointed you the voice of the industry?
You certainly don't speak for me.
What credentials or organization appointed you?
A few lyrics from Don Henley's song, Garden of Allah describes B19/skanza perfectly:

I am an expert witness because I say I am
And I said gentlemen, and I use that world loosely
I will testify for you, I'm a gun for hire,I'm a saint, I'm a liar
Because there are no facts, there is no truth
Just data to be manipulated
I can get you any result you like
Whats it worth to you?
Because there is no wrong, there is no right
And I sleep very well at night
No shame, no solution, no remorse, no retribution

No validity/credibility/identity, shame on you B19.
Keep laughing

 

[fischman]

Poor KB. :smash:

No one likes him.

 

[ArtVandalay]

B19, I don't know much about you but, it seems you have some fans on here. I'm not understanding your logic in the "union problem" at netjets. If the company wants to layoff, they layoff. As someone said earlier, the salaries of the pilots are an ant on a mountain compared to the whole. They wouldn't layoff pilots because they need the money, they lay them off because they don't want to pay them to do nothing. It's all about production and protecting the company, not busting the union down so they can lower wages. Not one fractional has lowered pay during all of this--even the none union fracs, such as us at flexjet--we actually got an increase in daily rate this year(all be it after they reduced our schedule). I just don't understand what the union has to do with the financial stability of the company in these times. I would hate to see netjets layoff now because all that would do is validate everyone else's layoffs and take our hand out of the cookie jar.

 

[FLYLOW22]

B19

Heeeerrrrre's Kevin!!

 

[AvroJockey]

Write downs and downsizing expenses, whether voluntary or not, are losses. Sales were down overall by over 40% and aircraft sales were down 82%. The company lost a heck of a lot of money any way you look at it.

Doubtful that the write downs will ever reverse as the market is already flooded with a/c and they have been trying to dump their excess already.

The write downs on the a/c inventory don't generate tax losses until realized and it is crazy to lose a dollar to save 35 cents in taxes.

Things can't be looking too good for the 3rd qtr either as they decided a change had to be made. There is no good news here and ignoring, or rationalizing, the numbers won't make it better.

You're correct, however, there's a reason they're taking all of these writedowns at the same time. BTW guess what happens when preowned share values go up...profits.

I have a small side business that has assets, no airplanes, but assets. When they depreciate I get to write them off, however, I really didn't loose or gain anything tangible. NJA is a little different because the preowned aircraft are only NJA's in the interim, they're really the owners asset. When the aircraft market returns, which it will, NJA maybe set to make some pretty nice $$$ by selling the preowned shares they bought back at fair market value. They are actually sitting on a potential gold mine right now.

With that said they have a bunch of airplanes that don't need pilots, so I still think there might be furloughs. What I think RTS was doing was maintaining the emotional fabric, so that when the aircraft market returns we have a highly motivated and dedicated employee group...we would kill the market if this happened.

The question really is OPERATIONAL LOSSES...what are they and how would a furlough effect them in the short term and long term? If your losses are a result of devaluation, then a furlough isn't going to change that. You really need to look at the profit loss statement and balance sheet to get a good idea of what's going on.

BTW, a furlough might be necessary, but without any pilot knowing the whole picture (all the financials) you really can't form an opinion either way. Doing so is just stupidity.

Also, you're assessment of aircraft values returning is completely false. That's the equivalent of saying home values will never return...which they already started doing.

Read some of NJAowners insight...he's smart. That's why he's the owner and were the pilots.

 

[AvroJockey]

Nothing is happening that hasn't happened before... a huge over-flated industry leading CBA is signed, everybody's happy, the economy goes to crap, the industry leading CBA gets corrected after crippling the company.

Just how in the heck do you know it's our pay that's causing any of these losses? You don't! Without a 10-Q or 10-K, you really can't make any assertions. Making parallels between United and NJ without all the numbers is plain foolish.