Netjets taking Beechjets

[Live4flyng]

Once Again,

NJAOWNER---In my opinion, a merger would never take place. It doesn't pass the common sense business test. Without realizing it, you figured out exactly what I meant. If FLOPS were going out of business, it would make sense for NJA to aquire some of their airplanes for next to nothing. The owners who used to fly with FLOPS may be looking for a new fractional with similar types of airplanes. There will more than likely be pilots with experience in those airplanes looking for a job too.

To Recap:

1. Company goes out of business and has a big sale.
2. NJA buys airplanes (core fleet) from above business very cheap.
3. Displaced owners look for new fractional, possibly NJA.
4. Displaced pilots find new job at different fractional, maybe NJA.

NO MERGER, nothing illegal, and if shareholder approval is needed, not very hard to get for the bargain. That is what B/H is all about, making $$$$$$.

Few more questions NJA Owner, and thanks in advance. How long would you be willing to fly around on a charter before throwing in the towel? EJM isn't very big, and the logistics involved in covering all the owner flights would be a nightmare. In fact, I would imagine that in a short period of time, OPS at NJA would be overloaded and start breaking down.

Under your Master Interchange Agreement, how long can NJA continue without supplying you an airplane? What exactly is your limited legal recourse? Would you make a serious phone call to someone in charge of your multimillion dollar investment?

 

[Frac Daddy]

live4flying,

In my opinion, a merger would never take place. It doesn't pass the common sense business test.

Neither did the Options/RTA merger, but it happened anyway.

 

[Live4flyng]

Ok, I'll bite again.

Options/RTA is not a very good example, but I see your point. The man who made that deal is no longer around, and look how it eventually turned out. The man who invented fractional aviation is still aroung and very much in charge.

NJA is not in the business of selling used jets, therefore, it is highly unlikely a merger would ever take place. I guess I should have started this off with (anything is possible), but merger has such a narrow chance, I wouldn't put any money on it.

Why would NJA merge with a company that is losing money if they could hold out and buy airplanes for a fraction of what they are worth? If Raytheon decides it no longer wants to pursue the fractional side of it's business, who can they turn to and sell airplanes in bulk?

This is only my opinion,

If Raytheon/Options were to decide to end operations......

1. Owners may need to be refunded their money.
2. Airplanes will be for sale, possibly to NJA.
3. Displaced pilots need a job (possibly preferential hiring @NJA)
4. Owners need a new home, maybe NJA.

I'm sure there are many other things, but you see the major points.

 

[flyboycpa]

.

 

[Live4flyng]

I guess I should have said that NJA is not in the business of selling used jets to it's owners.

NJA sells it's used airplanes to the public when a fleet is being retired. I have seen a few older S-2s flying around with the original paint job and QS still on the tail. They won't flood the market with a whole fleet of airplanes, they sell them off one at a time.

Right now I believe they are in the process of selling the Citation 7s and Hawker 1000s. The Sovereign, CJ3, Hawker Horizon(maybe), and now the Beechjet are scheduled to be delivered within the next year and a half.

I think NJA cares more about how many hours are on an airframe than how many years a fleet has been in operation. As I stated before, if NJA is buying 50 brand new Beechjets, they will more than likely need a core fleet.

NJA has quite a few hawker 800XPs too. For the right price, a few more core aircraft couldn't hurt. I can smell a huge deal with Raytheon in the making for all this. Just my opinion though.

 

[flyboycpa]

.

 

[Pugnacious G]

NetJets has always rid itself of planes from time to time. We're probably currently selling Ultra's, VII's, X's, Hawker 1000's, Falcons and G-IV's out of our fleet. New deliveries are probably only slightly outpacing the retirements, thus no hiring. I heard that some of those Floptions X's used to be ours.

 

[flymeonce]

If I may - this will not happen due to aircraft age, no warranty against airframes / engines, maintenance & management agreements causes great losses and cannot support doc's of airframes. The market is too soft even to sustain minimal financial gain to offset costs with chartering aircraft to make some capital gain.



Selling airframes in the open market will do no good due to the low market value against flight ops airframes. The only thing they would do would be to purchase airframes already built that are setting unsold at Raytheon with full warranties that would support the pricing structure of the management / maintenance agreements making it profitable for the purchase.



So, Flight Ops will remain part of Raytheon and will probably be continue under as a charter management company. Heck TAG US would not even touch it due to the large amount of capital it would need to continue operation. The GIANT GORILLA will pass this banana tree bye.......not to mention the fed's 135 reg of showing capital gain to maintain the 135 ops cert and not doing it on the float...as flight ops has managed to do.....still a great bunch of people making good things happen every day...hats off to them and not to ricci....

 

[flymeonce]

Pugnacious G, Live4flyng, flyboycpa

Just hopefully to assist... What I have been watching..the whole concept has been when airframes have mre hours than acceptable by the customers/owners they are offered to the public. thus the ultras, some 1000A's (back to the manifacture), VII's (a few more yrs) and the gone SII's. As we all know, these planes are good for another 20 yrs., however the perception is that NEW is GOOD and old (greater than 5 yrs is bad). Perception...

To get to the point NJA and Flex will replace a/c every few yrs with new models.....this is a great thing because it keeps things moving....however it could and will impact the market value of used business jet within the market place over the next two yrs. Based on their business model..all frax companies make most of their operating income on sales...yes sales. Margin is low with operations and most are luckey to break even, if not will show big losses over time...moving into the Fltops prblem.....

And for our NJA Owner..... Owners want to stay within the their frx company and at times they have to use outsid companies to supply lift and are "not pleased" to here that an alternate option is offered with 6000+ hrs....or even on fleet "core aircraft that have similar hrs", even though these planes are very safe and are maintained beyond 135 maint regs. Thus reason for the move for fleet updates...........

 

[flymeonce]

Pugnacious G no X's yet have been sold against registration...as FAA records indicate.....

 

[Pugnacious G]

I stand corrected.

 

[Live4flyng]

flymeonce

I think I followed what you are saying, but I have to disagree with one thing.

Owners don't climb on an airplane and ask how many hours the airframe has on it when they fly. When it comes to "core aircraft", most people including pilots don't even know the difference. Some "core airplanes" have less hours than the owners airplanes. Not because the company was trying to put more hours on one than the other, but some "core" airplanes were purchased after the owner's airplanes.

Back to what I originally said; If NJA is buying 50 New Beechjets from Raytheon, you can bet your ass there is a sweet deal involved. With that fleet, there may be a need extra airplanes wholly owned by NJA called "core fleet". Where else can you look for an even better deal on some core airplanes?

If you had a bankroll the size of Switzerland and walked into Raytheon looking for a deal, my guess is you will get one. That bankroll didn't get that big by making crappy deals either. NJA has quite a few airplanes built by Raytheon, and Raytheon wants out of the Frax business. It's starting to look like a duck to me.

 

[CE750Driver]

Good to note also that when NJA sells a used share, the occupied hourly fee and maintenace fees go up. As the contract maintenance with the plane is gone, and it does not fit into NJAs business plan to sell used shares unless the higher maintenance costs are covered.

That is why NJA will not merge with FLOPS. The business plans are at odds. Used airplanes = higher costs.

 

[SheGaveMeClap]

So why exactly did Netjets decide on the Beechjet? Was it because of the engine problems the CJ3 was going through?

The Beechjet isn't a great airplane. It's a terrible runway hog in the summer, it doesn't go that fast, or that far. And forget about any baggage. The trunk on my wife's car will carry more than a Beechjet. The cabin is comfortable, but that's it's high point.

Seems like the CJ3 would still be a better airplane than the Beechjet. Anyone have any further insight?

 

[Da Man]

So why exactly did Netjets decide on the Beechjet? Was it because of the engine problems the CJ3 was going through?

What engine problems with the CJ3, I thought it wasn't even certified yet?

 

[abenaki]

NJA and the Hawker 400's

The rumor mill says that NJA needed a "price-point" airplane to "compete" with Flight Options Beechjets......Also, Mr. Santulli and Mr. Buffett are rumored to be might TO'ed at Cessna/Citation Shares for putting the Soveriegn at CS due to some understanding that that would not happen.

So, I see this as a double swipe......NJA slaps Cessna up side the head with the cancellation of a few hundred million in orders AND takes aim at the same time with the Beechjets at Flight Options current and potential customers.....

Makes a lot of sense on both fronts, but it's just my take....

 

[NJAowner]

My 2 cents

I'll go out on limb simce I usally get my a$$ singed and said I'd try not to speak publicy much..... but

I have heard both from sales and pilots that the Beechcraft (i.e. Hawker) 400 is coming on board because of cabin pressurization issues on the Encore and that NJA is now left without a jet at that price point. I have never been on the 400 so I can not speak anything of it. But, I do love my Excel.

Just what I have heard from many sources.

P.S. I was on the Excel earlier this week and will be on it tomorrow. My "hat is off" since despite what I have read on here lately, the pilots with the "round union tag" on their baggage have been friendlier, more helpful and more pleasant than anytime in the past (even going back several years). Please don't read more in here than is here, but my I and my family have noticed and "upturn" in pilot attitude in the last 3-4 months. And that goes along with what I have said in the past with getting what you want. Even thpugh I remember who flies us, we were very impressed the other day when the PIC remembered thathe flew us before (but without our dog). If you are on the board, please PM me -- we had a good flight, little bumpy, and then your tour was over later that day.

 

[Skyking650]

Re: NJA and the Hawker 400's

The rumor mill says that NJA needed a "price-point" airplane to "compete" with Flight Options Beechjets......Also, Mr. Santulli and Mr. Buffett are rumored to be might TO'ed at Cessna/Citation Shares for putting the Soveriegn at CS due to some understanding that that would not happen.

So, I see this as a double swipe......NJA slaps Cessna up side the head with the cancellation of a few hundred million in orders AND takes aim at the same time with the Beechjets at Flight Options current and potential customers.....

Makes a lot of sense on both fronts, but it's just my take....

I disagree...........along with the thousands of Cessna employees who got sent home jobless after parking the 100 cancelled EJA aircraft around the Cessna property.

Never....EVER put all your eggs in one basket. I can only hope that the folks at Cessna have embraced that old wisemans words! Let the cream rise to the top, gentlemen!

 

[abenaki]

Have you ever heard of the expression "Don't cut off your nose to spite your face?".....Seems to me that that is exactly what Cessna did.....They thought they could "have their cake and eat it too" by going up against NJA by placing the Soveriegn with CS. Well, if the assumptions are correct, CESSNA is the one who put their own workers out on the street by taking that risk.

Well, they lost and it cost them an order for what? 100 airplanes? Seems to to me that keeping their eggs in the NJA basket would have been smarter than trying ot have it both ways. I don't see CS being able to compete against NJA in the market. So, they might manufacture a handful of Soveriegns for themselves at CS while costing a hundred CJ3's.....Not too bright as I see it.

 

[Skyking650]

Have you ever heard of the expression "Don't cut off your nose to spite your face?".....Seems to me that that is exactly what Cessna did.....They thought they could "have their cake and eat it too" by going up against NJA by placing the Soveriegn with CS. Well, if the assumptions are correct, CESSNA is the one who put their own workers out on the street by taking that risk.

Well, they lost and it cost them an order for what? 100 airplanes? Seems to to me that keeping their eggs in the NJA basket would have been smarter than trying ot have it both ways. I don't see CS being able to compete against NJA in the market. So, they might manufacture a handful of Soveriegns for themselves at CS while costing a hundred CJ3's.....Not too bright as I see it.

The NJA orders were cancelled long before (almost a year!) before CS took options on Soveriegns and CJ3's. As you yourself stated, little ole CS is small in comparison to NJA, Cessna is doing the smart thing by expanding their market segment and not counting on one customer who already left them hanging out to dry. Keep in mind that NJA also purchases from other manufacturers, so to cancel 100 airplanes because of an order that had not been placed is rediculous thinking on your behalf, Sir.

I agree with the other gentleman (gunfyter) that too much speculation and bull$hit has taken over this thread. Please keep comments to the facts.........if you don't have FACTS then RELAX.