Options Going Belly up....

[banned username 2]

Maybe I should have said that the pre-owned fractional company is a losing proposition. Used high time aircraft with no warranty left cost too much $$$ to keep in the air. Thats the difference between F/O and EJ.

I have read and heard that NJA made their money from aircraft sales and not from the day to day operations flying them... and now with the economy in the crapper, and aircraft sales down... they are hurting because they aren't selling the shares...

Just what I have heard...

 

[JetA1]

Yes, NJA business is not making money right now either, But WJB has said that heis in this for the long term. Raytheon will not be in it for the long term. Raytheons patience will wear out with them losing money and will close up. 80 million charge off for the loss on this business is no big deal to them. Does anyone realize how big Raytheon actually is? We are talking about a multi billion dollar company. Fltops is a small peice of a very large pie....

I think Frac man sees the writing on the wall.....

 

[JetA1]

Raytheon sales last year...16.8 billion
Market Cap....11.6 Billion
80 million loss last yr...

 

[mike]

John Nahill

I think Raytheon was wise to put Nahill in as CEO. You would not want a "world class" aviation person solving a crisis management and marketing problem. All aviation guys suffer the same problem, a love affair with flying.

 

[Tim]

I heard that two years ago Netjets made a sliver of $$$ on operations, and then last year we lost some on it again. The feeling I got however was that profit was possible as we grew and reaped the benefits of scale. I also heard that we were keeping our management fees down to put some pressure on FO and FLEX. This was from the same guy that found out on his pager (like all the other pilots) that we had ordered the G200s, that guy would be the Chief Pilot so take it for what its worth.

I'm hoping that FO can reach critical mass sometime soon and start making some $$$. The more competition in the business the lower the costs, which creates more sales which creates a bigger base to absorb the inevitable price increases one day. Besides that I could not stand to hear of more pilot layoffs in the industry.

 

[h25b]

I also have heard the same as Falcon Capt. about the fractionals reaping the most of their profit from the sales of shares as opposed to the operations... Someone with better information on this topic should chime in. Also could someone comment on the information coming out that fractional customers are starting to get scared by aircraft depreciation lately...

 

[Aspiring to be]

FLOPS = Value ?

Guess I do not understand value or financing. How could a company (FLOPS) have a value of 80-100 million as a previous poster states. Information that I have read leads me to me believe that FLOPS would have been in bankruptcy Sept. 2001 if Raytheon had not started loaning money. I believe that FLOPS would have for sure been in bankruptcy if Raytheon had not merged RTA with FLOPS and given FLOPS an additional loan of some 20 million.

I find it hard to believe that if I had a company worth 80 million that I could not get 20 million to pay off Raytheon. I am sure Ricci did not like stepping down as CEO. No my opinion is that FLOPS has a negative worth. Most of the value of the used airplanes (which are owned by the owners and not FLOPS) have lost much of there value. The owners at FLOPS are maybe the biggest losers.

With the book keeping at Raytheon/RTA it would be very difficult to determine if RTA was losing money or not. It is for sure that Raytheon wanted and I am sure they still would desire to sell all of the small aircraft business.

 

[mike]

Raytheon

To find out information on publicly held companies, go to the SEC. EDGAR site. For Raytheon try

http://investor.raytheon.com/edgar.cfm

I can't comment on the accounting principals used, but the information is available for all that wish to read it.

It is difficult to make money in aviation. I believe this is true for fractional, airlines and charter companies alike. The fixed costs (salaries, benifits, insurance, buildings, utilities) have risen dramaticly over the past two years while the value of assets (aircraft) have dropped. Fees have not kept pace with costs.

The variable costs are going up, too. I saw a wholesale increase of 12 cents per gallon last Monday.

 

[Aspiring to be]

Well Mike what is that old saying that figures don’t lie but liars do figure. The numbers from RTA were somewhat inflated due to many ways of accounting and allocation. RTA was reported to pay more at Raytheon for every item it received from aircraft to fuel than did the others such as EJA.

Do not doubt that RTA, EJA or any company has or could lose money. In RTA case because of the accounting I do doubt the reported lost as being an accurate number. I do believe that Raytheon has been call because of their accounting procedure for about a four year period. Not another Enron but some possible trouble.