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NetJets Middle East Article

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captain dad

Well-known member
Joined
Mar 30, 2006
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January 2009
Flying your own NetJet at a fraction of the cost of actually owning an aeroplane can make sound business sense. Robin Amlôt lines up on the runway
NetJets is a global company with operations in the US, Europe and the Middle East. The group is reckoned to be the largest operator of business jets in the world with a fleet that is more than double the size of the next largest business jet operator and equivalent to the second largest commercial airline in the world.

NetJets Middle East is a division of National Air ServicesNational Air Services
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and is headquartered in Jeddah, Saudi Arabia. All flights are operated by NASNAS
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. The NetJets Middle East fractional aircraft ownership program is affiliated with NetJets Inc. and is operated under the principles of the NetJets US program created in 1986 by NetJets Inc. Chairman and Chief Executive Officer Richard Santulli.

The global NetJets 'networked' fleet of aircraft currently consists of 781 aircraft with services covering over 173 countries. The NetJets Middle East fleet includes 16 different types of light, midsize and large cabin aircraft accommodating from six to 18 passengers with flight range of up to 4,300 nautical miles. NetJets Middle East fleet is expected to grow by 60 new aircraft, on order now, with projected delivery of one aircraft per month for the next
five years.

At the Middle East Business Aviation (MEBA) 2008 exhibition, held in November 2008 at the Dubai Airport Expo, it was reported that the region is now the world's fastest expanding market for private jets. Experts forecast that the Middle East will account for $720 million of the private jet market this year.

A high-flying market
Vincent Santulli, Chairman of NetJets Middle East, commented, "I'm very bullish about the market here [in the Middle East]. One of the reasons I am is because what we do is to offer people a number of financial alternatives in terms of dealing with the purchase of a fractional share: you can purchase the share; we can finance the share; if you want to lease the share we will lease the share to you. We have also introduced a card programme that allows an individual to have 25 occupied hours of flying without any long term commitment: pay a down-payment and pay when you fly.

"So we've provided a number of alternatives so that we can address some of the concerns relative to customers' liquidity.

"We have targeted 30 per cent-plus growth per year for the next five years which, from my point of view, I feel very confident that we can achieve. It is consistent with the 60 aeroplanes that we have ordered over the next five years, about $1.5 billion-worth of aircraft."

NetJets doesn't say 'No'
Chadi Saade, Managing Director Sales & Marketing of NetJets Middle East, added, "People who are thinking about purchasing their own aircraft and spending $30-40 million dollars and getting an aircraft in one to two years time now have an alternative solution in the Middle East with fractional ownership where they have to pay significantly less, corresponding exactly to the number of hours that they fly a year, while enjoying all the benefits of ownership.

"The way the programme works; you sign a contract with us, any of the options that Vincent talked about - purchase, lease or the card and whenever you want to fly, there is one number to keep in mind, one number to dial wherever you are in the world and we'll pick you up and we'll fly you. It's that simple.

"Now the guaranteed availability there are different timings but it can go up to 12 hours. So give us a call and within 12 hours you are guaranteed to have an aircraft available, we cannot tell you 'No'."

NetJets backs its guarantee by retaining a core group of aeroplanes that it does not sell to customers. Vincent Santulli explained, "We have in excess of $200 million-worth of aircraft here in the Middle East that we don't sell. The only purpose of these aeroplanes is to provide the guaranteed availability. When this program was first put together by my brother [Richard Santulli] back in 1986 (my brother holds a PhD in mathematics) he did extensive research in terms of distribution analysis: what do you require in terms of aircraft that you don't sell in order to support aircraft that have been sold and to fulfil the guarantee?

"Essentially that is the basis of what fractional ownership is about. Guaranteed availability is one of the elements that clearly separate us from the rest of the pack. It requires a substantial investment and some fairly sophisticated software to make it all work. And it does work."

Purchasing fractional ownership requires that you pay an initial acquisition cost for the fraction of the plane that you purchase. In addition, owners pay a monthly management fee equivalent to the fixed cost of operating the asset and then an hourly rate consistent with what it costs to fly plus a margin. Comments Vincent Santulli, "If there weren't any margin, what business would we be in?"

"You don't maintain the jet. Also what we do when you sign, for example, a contract beyond one year which most owners do, then we guarantee that your price will only escalate by a maximum of five per cent a year. It doesn't matter if there's a maintenance issue with the aircraft or this, that or whatever.

Share and share alike
"If you own your own aeroplane you are never quite sure what tomorrow brings relative to these issues - you don't have that, you have no concerns, no worries at all. You also have access to the NetJets fleet around the world. So if you're an owner in the Middle East programme you automatically belong to the club of NetJets which means if you want to fly in Europe you fly in the European fleet, if you want to fly in the US, etc. and when you do, you call the same number here and they are going to make sure there is an aeroplane to move you from Paris to Geneva or wherever you have to go.

"If you buy shares, for example a quarter of a share in an aeroplane then you are going to be entitled to multiple aeroplanes. In other words if you're a co-chairman of a company and he's a co-chairman of a company, instead of buying two aircraft, let's suppose based on the hours that you fly you buy half an aeroplane from us, we guarantee you two aeroplanes, so you have yours and he has his.

"We have some large corporations that buy multiple shares because they have multiple executives that they are moving around which you can't do with a single aeroplane. Also if you have a single aeroplane and the aeroplane goes down for maintenance then you don't have an aeroplane!

"In the NetJets programme you're never concerned about that because all our aeroplanes, every Gulfstream like the one we're in now are outfitted exactly the same. So even though you may own and are registered with this aeroplane, the one that picks you up is not necessarily this one. You wouldn't know it unless you looked at the tail number. So you never have an issue. Your aeroplane may be down for maintenance, you just know 'I've called for my aeroplane and my aeroplane is there!'"

Essentially that is the basis of what fractional ownership is about. Guaranteed availability is one of the elements that clearly separate us from the rest of the pack

© Banker Middle East 2009
 
Talked to a friend of mine yesterday who is on the Hawker at NJME. His 35 day tour is over today and he has logged 16 hours of flight over five days of active duty.

Said there has been a significant drop in business over there too, lots of puling back as far as investments. Surely it will eventually turn around eventually, but they are in no way isolated over there.

We're all in this together.
 
Not Hiring

A very reliable source working @ NJME has said that they are not hiring and it looks like about a year before they resume. Good luck out there.
 
A very reliable source working @ NJME has said that they are not hiring and it looks like about a year before they resume. Good luck out there.
Actually my friend told me they have 9 more FO's going through training on the Hawker at the moment, but then that's it until things improve. Also, no more DEC's as it used to be before. Gotta work your way up the ladder..
 
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