NetJets Sues Signature and Landmark over Fuel Discounts

[gret]

Today's AIN Alerts
NetJets has filed lawsuits against Signature Flight Support and Landmark Aviation in an attempt to force the two FBO chains to extend contracted high-volume fuel discounts to Support Services clients at NetJets aircraft charter and management arm Executive Jet Management. Announced at the NBAA Convention in October, EJM's Support Services provides flight departments and aircraft owners with a suite of services that offer cost savings via discounts leveraged by the buying power of NetJets and its subsidiaries. In the Landmark case filed in the Franklin County Court in Columbus, Ohio, NetJets said that the FBO chain's San Diego facility refused to provide discount fuel under the contract to a Support Services client last month. On March 22, the FBO chain then informed NetJets that it would not provide the contract fuel discount to any of "NetJets" corporate flight department clientele? at any Landmark location. Though the initial filing against Signature and parent BBA Aviation in the New York State Court is sealed, follow-on court documents suggest a nearly identical complaint against this FBO chain. In both cases, until court hearings start this summer the judges are requiring the FBO chains to provide contract discount fuel to existing, but not new, Support Services clients. While Landmark and NetJets would not comment on pending litigation, Signature sidestepped its usual policy on these matters, saying, "NetJets is a highly valued customer and otherwise it's business as usual" between the two companies. "We have reached an interim agreement for existing Support Services customers," a Signature spokesman told AIN.

Excerpt from Landmark's general counsel to NetJets contained in court filings-

"The EJM "Support Services" program appears to be nothing more than an effort by EJM to sell Landmark?s discount pricing to aircraft owners and operators for whom EJM does little else."
​

 

[cldsfr79]

Today's AIN Alerts
NetJets has filed lawsuits against Signature Flight Support and Landmark Aviation in an attempt to force the two FBO chains to extend contracted high-volume fuel discounts to Support Services clients at NetJets aircraft charter and management arm Executive Jet Management.
[/INDENT]

Good. But this is just really a ploy to force the hand.

Some times I think Signature takes NetJets business for granted. I know NJ actually make up less than 10% of the entire private jet market, but they are still big players.

There are some airports, like MIA/SFO/BOS, where you are forced to go to one FBO (Landmark or Signature), but mostly all the big airports have multiple FBOs. I'm sure all the FBOs (MillionAir, Atlantic, Jet, Etc.) are flooding NJ with calls and emails for business. NJ will get it's discount one way or the other.

Or NJ will just keep opening up their own FBOs. NJ has them in HPN, CMH, VNY, PDK, soon to be PBI, and even TEB, although it's a Landmark, NJ owns hangers and leases space there.

 

[t-bone]

I'm curious about the rationale behind owning/operating your own FBOs. Are you able to get wholesale pricing on fuel? It seems like a huge expense for something that generates little revenue (unless they provide services to non-NJA customers). Do the passengers really care when they drive straight to the plane most of the time?

 

[gunfyter]

I believe the FBOs are only branded netjets but actually operated by real FBOs

 

[gret]

I believe the FBOs are only branded netjets but actually operated by real FBOs

Correct. It is just a way for the company to show that they have some bricks and mortar

The suit is simply the FBO chains to protecting the special pricing that they give to heavy users. They don?t want these preferred customers marketing the fuel agreements to others and collecting into-plane like fees because they have a discounted price. It would be like United offering its fuel price from vendors at a mark up to NetJets.

If it is a bone fide client with substantial other services being provided by NetJets, the FBO chains are saying that?s fine and they will honor the contract.

 

[Sparse]

EJM has around 180 aircraft on its ceritificate. That's not chump change.

 

[NoJoy]

Just give Atlantic more business-if you can. Places like TEB, Signature has all the traffic, and Atlantic has two planes on their ramp. Atlantic bucks going to waste. Jeesh!

 

[gret]

EJM has around 180 aircraft on its ceritificate. That's not chump change.

They qualify...it is those aircraft whose owners are referred to as "Support Services" clients.

They basically piggyback on EJM/NetJets buying programs to obtain discounts on fuel and other services (training, etc.) and not much else. Somebody got cute and thought they had a new idea to make money and Signature and Landmark are saying no way. It is has been tried before and it doesn't work once the terms see the light of day.

 

[rajflyboy]

Just give Atlantic more business-if you can. Places like TEB, Signature has all the traffic, and Atlantic has two planes on their ramp. Atlantic bucks going to waste. Jeesh!

TEB... Signature has all the traffic?

Have you seen Jet Aviation at TEB?

 

[gutshotdraw]

Just give Atlantic more business-if you can. Places like TEB, Signature has all the traffic, and Atlantic has two planes on their ramp. Atlantic bucks going to waste. Jeesh!

It's going to suck when Signature opens at SJC and we have to start going there instead of Atlantic.