Netjets to Start India Operations & Looking at China Next

[On Your Six]

Clearly Warren Buffett is interested in further diversifying Netjets to weather economic cycles. Plus, both India and China are growing economies where private-jet travel is increasing. Should be interesting to watch - I haven't seen anything regarding aircraft to be used in India yet.


NetJets starts India operations, eyes China


Wed Mar 19, 2008 6:10am EDT

MUMBAI, March 19 (Reuters) - Private jet firm NetJets is starting operations in India and will look at a partnership in China as it taps fast-growing markets outside its traditional base of the United States and Europe, a senior official said. NetJets, a unit of billionaire investor Warren Buffett's Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research), expects strong economic growth and rising incomes in Asia, the Middle East and Latin America will boost demand for private aviation.

NetJets, which sells fractional ownership in private jets to individuals and companies, operates more than 750 aircraft now. "In India, wealth creation is taking place at a phenomenal pace," said John Colucci, executive vice president, at a news conference with local partner Ashish Chordia, who represents luxury brands such as Porsche (PSHG_p.DE: Quote, Profile, Research) and Fendi in India.

"We think we'll get to our first 100 customers in India very quickly, and that will be just the tip of the iceberg," he said. There has been a 400 percent increase in the number of NetJets business flights to and from India in the last four years, Colucci said, adding the firm will be targeting high net worth individuals as well as businesses in India. "Our customer base is not affected by a market slowdown ... breakeven will be a few years down the line here, not many years," Colucci said. India's total air passenger traffic is forecast to grow at nearly 20 percent annually over the next two years.

Discount carriers are expected to grab an increasing share of the market, but demand for private aviation is also growing.

Tata Group's Indian Hotels Co (IHTL.BO: Quote, Profile, Research) recently bought a stake in Singapore-based Briley Group's BJETS, which also offers fractional ownership in private jets in India and southeast Asia. The venture has ordered 50 jets worth more than $600 million. Brazilian plan maker Embraer (EMBR3.SA: Quote, Profile, Research)(ERJ.N: Quote, Profile, Research) is also eyeing the market for business jets. (Reporting by Rina Chandran; Editing by Mark Williams)

 

[On Your Six]

So, my question would surround potential staffing at Netjets India. Given that the Indian airlines are expanding quickly and the use of Expats is increasing there due to local pilot shortages, who would likely fly these jets in India? Do you think NJA/NJI/NJE/NJME pilots would be given the opportunity to temporarily operate these aircraft?

Where will Netjets India find highly-qualified pilots (expected by Netjets customers) in the area when the airlines there can't find enough qualified pilots? Emirates has siphoned a number of the highly-qualified pilots away from India as well.

Any thoughts?

 

[jtf]

They will probably have to throw a lot of money at it to make it happen. My guess is they will start an ab-initio program like they recently did for NJE as soon as they can also. I know lots of pilots have said they would happily take a relatively short term contract for China and other parts of East and SouthEast Asia if the company made a provision for current NJA pilots to take it and then transition back to NJA after an alloted amount of time, but I'm not sure how much pilots are going to want India. I guess if they offer it and the pay is good enough, pilots will jump. I'll fully admit I have a price. Not sure what it is, but I can be bought.

 

[7777]

I would think alot of the former military pilots NetJets currently employees would be willing and use to such a move. As a current military pilot, I certainly would not have a reservation on doing it, providing the opportunity (pay, family support, ect.) were acceptable.

 

[netjetwife]

As a retired military wife who thoroughly enjoyed our 3 overseas assignments, I agree 7777. My husband has mentioned it before, knowing I'd jump at the chance--India or China. We think it'd be a fantastic experience, especially for the kids, and the travel would justify home schooling or private online schooling if that had to be done. On our remote tour we used the latter and our son's instructor would tell the class "Have a good day, except you, Nic, good night there in Egypt". Obviously, some adjustments are required but it's well worth it, IMO.

 

[jaybird]

"In India, wealth creation is taking place at a phenomenal pace,"

When will India start outsourcing jobs back to the US?

 

[skyward80]

I'm not surprised about NetJets eyeing China, but the interest in India is a bit of a surprise. The aviation infrastructure in that country is not ready for fractional flying. Perhaps, the interest is not in flying inside of India though.

Skyward80

 

[jtf]

The AIN newsflash said it's NJE helping to start it up because flying between Europe and India has grown so fast. The airplanes will at first mostly be for international with minimal domestic. I'm sure if it is successful and the infrastructure grows there will be more and more domestic flying.

 

[gutshotdraw]

India is a huge country and there is enough infrastructure between the major business hubs to support fractional flying. It will be interesting to see how the organization will be structured, what aircraft, and how they will be staffed.

NJW, no complaints this time about investing NJA profits in an overseas growth plan?