h25b
Left for ProPilotWorld
- Joined
- Jan 5, 2002
- Posts
- 1,829
This is where I really get confused. I really don't see why management's claim that they aren't making much money is all that unbelievable.
I know for a fact what it takes to keep a corporate department ranging in size from 1 to 25 aircraft running not attempting to make any profit paying their crews NBAA wages. Now you start trying to imagine what the operating costs of an organization the size of NetJets must be. The operational support structure that is required for dispatch, maint., cust. service., sales, etc... These are substantially greater than a Part 91 corporate flight department by an order of magnitude.
The start of the fractional business hid the flaw of the overall business model. In the early years the cash cow of the business was in the sale of shares. Now that they have to actually make money operating these planes the problems become apparent. Let's be real, the average business jet doesn't exactly yield the lowest cost/seat mile. Then you throw in the fact that these aircraft are essentially doubling NBAA utilization. I don't even want to think what the maintenance costs are trying to keep a Citation X in the air for a 1000 hrs. a year...
And yes, I realize that there are things like occupied hourly fees from the owners, monthly management fees, etc... The whole point of the fractional option for the customer standpoint is that it is in fact, A COST EFFECTIVE alternative. Everyone likes to say, "give us our pay raise, just pass along the cost to the customers..."
I'd like to see what the estimated increase in monthly fees and occupied hourly costs would be...
Let us say that over the entire NetJets pilot roster the average yearly income is $40,000/yr. and there are 2000 pilots (I have no idea how many there are, just for sake of arguement)... That means payroll (excluding ANY benefits) is $80 million. Lets say a new contract would yield you an average 35% raise. This would increase payroll by an additional $28 million/yr.
I know for a fact what it takes to keep a corporate department ranging in size from 1 to 25 aircraft running not attempting to make any profit paying their crews NBAA wages. Now you start trying to imagine what the operating costs of an organization the size of NetJets must be. The operational support structure that is required for dispatch, maint., cust. service., sales, etc... These are substantially greater than a Part 91 corporate flight department by an order of magnitude.
The start of the fractional business hid the flaw of the overall business model. In the early years the cash cow of the business was in the sale of shares. Now that they have to actually make money operating these planes the problems become apparent. Let's be real, the average business jet doesn't exactly yield the lowest cost/seat mile. Then you throw in the fact that these aircraft are essentially doubling NBAA utilization. I don't even want to think what the maintenance costs are trying to keep a Citation X in the air for a 1000 hrs. a year...
And yes, I realize that there are things like occupied hourly fees from the owners, monthly management fees, etc... The whole point of the fractional option for the customer standpoint is that it is in fact, A COST EFFECTIVE alternative. Everyone likes to say, "give us our pay raise, just pass along the cost to the customers..."
I'd like to see what the estimated increase in monthly fees and occupied hourly costs would be...
Let us say that over the entire NetJets pilot roster the average yearly income is $40,000/yr. and there are 2000 pilots (I have no idea how many there are, just for sake of arguement)... That means payroll (excluding ANY benefits) is $80 million. Lets say a new contract would yield you an average 35% raise. This would increase payroll by an additional $28 million/yr.
Last edited:
