NJ and Cessna??

[ozpilot]

In fairness to Cessna they build a Ferrari (Citation X) and Netjets runs them like New York Taxi cabs ....

 

[Dassault]

Buying Signature would make more sense.

 

[tdwnds1]

I have heard the "overlap" theory for years. I have issues regarding the synergy of NJ and Textron at this time. While a majority stake might have benefits down the road, at this time it really dosent make sense. I do think that some consolidation in the fractional industry in inevitable considering the current issues within the industry.

As for CS, it is apparent at this time that Textron is going to try to rebrand the company to make if profitable or at least stop the drain on its finances. If the new Citation Air by Cessna can be at least somewhat profitable in the on demand charter market (a similar model being used by XO Jet) it would be an accomplishment. I dont think at this time Textron is going to abandon or spin off CS unless the re-branding dosent work, but the next year will be very interesting for all the fractionals.

 

[ProFracPilot]

Buying Signature would make more sense.

This is certainly a possible scenario. At the very least, I believe Signature is being slimmed and pretty'd up for a sale. Look no further than the history of their current CEO. This has been his M.O. in the past: Come in with great promise of saving the company; cut cost to the bone (shrinking to profitability); then either sell the joint or part it out. It certainly isn't his understanding of a "customer service" business that gets him these jobs - he doesn't have a clue about caring for customers.

 

[sflax]

Who said CS was a drain on Textron. The last few townhalls have actually stated the CS is cash positive to the bottom line at Cessna and that the company is in a very good financial situation.

 

[tdwnds1]

I not going to contradict your information since I dont have any inside knowledge of what is going on, but...

You have gone through 2 or 3 rounds of furloughs at the company, I have never seen a company that was making money have mass layoffs of people. In additon, though CS might add to the bottom line at Textron (revenue), the larger company is still hurting. Ask the 55 percent of the workforce that has been laid off. Lastly, a "re-branding" means that the current business plan needs to be changed. Why would that happen if the company was profitable? You can still have lots of revenue without profits.

Dont get me wrong, I hope you guys are doing well and the company succeeds. Dont want to see anyone else out of work.

 

[BoilerUP]

You have gone through 2 or 3 rounds of furloughs at the company, I have never seen a company that was making money have mass layoffs of people.

UPS tried to furlough 300 pilots earlier this year...while still making a HALF BILLION in profit per quarter...

 

[sflax]

Why is bringing cost in line with revenues a bad thing, it is the right thing. So keeping people around, just b/c you make money is the moral thing in the social world. But if you want a business to succeed, people are cost. And when revenue goes down so must costs.

 

[FRACTRASH]

#1 we are cash positive at CS
#2 the re branding is just a way to reach more people who think shares is all we do.
#3 many very exiting changes coming, I don't want to say too much at this point, I'm not sure what's public info yet.
#4 I don't like to see it anywhere, because it effects us all. But, NJ is about 150 airplanes to fat right now in this market. You can only carry that much extra overhead and cost for so long, somethings got to give.

 

[Sparse]

.
#4 I don't like to see it anywhere, because it effects us all. But, NJ is about 150 airplanes to fat right now in this market. You can only carry that much extra overhead and cost for so long, somethings got to give.

Just curious where you got that statistic.

 

[7on7Off]

Just curious where you got that statistic.

http://www.ainonline.com/news/singl...gns-from-netjets-changes-ahead-at-fractional/

he was off by 20 or so.

 

[tdwnds1]

I dont think an overabundance of aircraft is unique just to NJ. I believe the challenge is how you utilize what you have.

If on-demand charter gets them flying, go for it. If "rebranding" brings in clients, more the better. Its time for some new and different ideas in this market for everyones sake.

 

[sflax]

The idea is that all the other fracs have faced the music and parked and laid off. We are just wondering when is NJ. And it wont matter if they own or dont own Cessna or Hawker, if there is no demand, then there is no demand.

 

[flyzimex]

I heard NJ did have some pull with cessna when it came to aircraft design. I thought cessna didn't put auto throttles or auto spoilers on the X because NJ didn't want to wait any longer for the development of such a system, or something like that. I tought that NJ would have the most pull or influence of any Frac company on aircraft design, and they have left their mark on a few models from Cessna. I could be wrong, but I think that is what I have heard at Flight Safety or Simuflite.

Clyde, looks like you were paying attention in class .

Cessna did want to put A/T on the X, but it would add three to six months to the development and NJ was not prepared to wait for that. With NJ having a substantial order in place Cessna obeyed them. IMHO that was a mistake by Cessna, it would have been a good feature on the X. But what do I know . So yes, with a big enough order any fractional will have some pull in a development of a new bird.

I was told this at X initial at SimuFlite.

 

[FRACTRASH]

Another fact, NJ being overly aggressive with aircraft orders that they cancelled with the down turn in the market crippled Cessna and Beach. With some info on the inside cessna has a very poor relationship with NJ at this time. I really don't think they care what your company has to say. I will say it was better in the past. But I wouldn't expect them to be doing much business in the next several years. In all fairness XO Jet also put it to Cessna as well.

 

[tdwnds1]

Just saw this in Aviation Week. Pretty much summs up what I have been thinking:

Analyst Sees Smaller Fractional Market


The fractional business aircraft industry is entering a new phase - the value era -- after reaching the milestone of more than 1,000 aircraft in service, according to a new report from Rolland Vincent, president of the Plano, Texas-based aviation consultancy Rolland Vincent Associates.
After emerging in 1986, the industry grew rapidly from 1995 through 2000, retrenched and rebuilt through 2004, and then grew again through 2007, Vincent said yesterday. "In the new value era, companies and wealthy consumers have become more resourceful," he says. "The value equation and their expectations have changed."
The new era of value is defined by a shift in consumer attitude and purchase behavior across all sectors of the economy. "The economic crisis has heightened awareness around cost and value-for-the-investment. High net worth individuals and companies are not immune from these forces - in fact, they too have become more resourceful and more price elastic than before," Vincent observes. "Fractional customers and their advisors tend to have more experience now, and have leveraged this experience in the current downturn to re-negotiate contracts at attractive terms."
Fractional operators are facing painful decisions on adjusting their staffing levels and fleet sizes as customer flying hours and unsold aircraft values declined 25-30 percent over recent peaks, says Vincent. "Into the headwinds of the global recession, operators and their investors are asking 'What happened to my business model?'"
Vincent predicts that most established operators will take very few deliveries of new aircraft over the next three years, a major change. "We will also see a significant number of fractional aircraft retirements, and this additional inventory will depress already-low used jet prices for some time," he warns.
The smartest operators are already taking advantage of the economic downturn and slower customer activity levels by removing older aircraft, honing operations, simplifying their fleets, lowering their cost structures, and improving customer-facing processes, Vincent observes. "They're evolving, making the tough calls, re-positioning their businesses, and getting in the game for the long-run," he says. "The strongest will innovate, globalize, and specialize, while others get off the field."
The good news is that for customers, there has never been a better time to get into the market, Vincent states. "For investors, acquisition and consolidation opportunities are abundant. For fractional operators, the new era of value is a time to raise the competitive bar even higher in delivering exceptional service."