Some Owners Have Gripes too (And Sympathy for Crews)

[jetwash]

Fr8dog777,

Flight Opts CEO is from the commuter airlines and wants to treat the owners like commuter passengers.

He just does not get it that we are in the service industry and not the transport industry. When you stop providing the service the owners expect then you are just another commuter airline that charges a lot more.

I am sure you remember his idea of not using charter aircraft for a month and instead to let the owners wait until a Flight Opts aircraft can pick them up. We had owners waiting more then 6 hours at FBO's around the country for a Flight Opts aircraft to arrive rather then charter a jet from the FBO where they were waiting. We stranded many overnight just so the accountants could see a "zero" in the charter column.

Like most employees at Flight Opts I use to go above and beyond to get the job done and satify our owners. Now I take after our CEO and just don't care, I just want to see the $$$$.

 

[pamed19]

special circumstance customer

Thanks so much for the insightful post. It’s good to hear it from the horse’s mouth – so to speak. Let me tell you that such an experience is more the norm than the exception.

I have been at the table during owner negotiations and heard the old line, “you need to go how far? With how many people? Yes, X aircraft can do that, all day, everyday, with full pax, full fuel, 99% Boeing winds, from ASE at ISA +20. We’ll go ahead and put that in the contract.” Sure you will….

The “comparable aircraft” clause always cracks me up. Especially when it comes to the larger cabin aircraft. You need an aircraft equal to or better than to your Citation Ultra. No problem, they are a dime a dozen and they can always give you a bigger aircraft to appease you. BUT, when you get to the large aircraft classes such as the Falcon 900/200, Challenger and G’s you have a challenge on your hands. So and so’s G450 is unavailable so what do you do? Get them a GIV from Jet Aviation or TAG. Nope, not going to happen unless you are a “special circumstance customer”, after all that’s an expensive aircraft from an expensive company and we can’t get a break n the price. So the company calls the charter broker/company who they have a deal with to find a large cabin aircraft. They have nothing nearby that size. So what does the owner hear on the phone? “We’ve tried everyone in the area and the best we can do is a (insert inferior aircraft here).” You know why? Because that’s the best price they can get on an aircraft for the least amount of effort. Period. What do most owners do? They complain and eventually take the plane and go on their merry way. Very few owners take it upon themselves to verify that there are indeed no aircraft available in the area. Why should they? After all, aren’t they paying a premium to a fractional company to be the aviation experts?

If you are a lucky customer, you may only have this happen to you a few times a year. But it’s going to happen.

Pretty soon the company has made so many promises that they can’t keep that the people in scheduling, customer support, etc. get a barrage of (rightfully) upset customers on the other end of the phone. AND, due to the fact that there are so many people involved in one particular flight (dispatch, customer support, wx planning, reservation, FBO personnel and on and on) that it’s easy to just blame the pilots. The pilots forgot the catering, the pilots didn’t check on transportation, etc.

In my experience in the fracs it’s interesting that it’s never anybody’s fault when something goes wrong. Very rarely do you get someone on the phone to say “hey, I dropped the ball and I am very sorry….” Usually you get the runaround. It’s like trying to get a hold of a real person at your credit card company. The only people you see face-to-face that can help you are the pilots, so they usually get the brunt of the cleanup work.

The best-case scenario is that some concession is made for the owner as more of a temporary bandaid. Worst case, as was already mentioned, is things come down to litigation – and that gets ugly fast.

The fractional world looks great on paper. It’s an easy sell, usually, but a nightmare to manage. Remember, profits in fractional come from sales. Period. In order to make money a fractional operator has to continue to sell, sell, sell. There is no margin in management fees, no matter what the surcharges are. Operations sucks the cash flow out of an operator at an alarming rate. Anyone who says different has their information wrong, or worked as an accountant for Enron.

The higher-ups at these companies know the financials, and if sales are made, things will keep rolling. Current customers are lame-ducks as far as profit. The money has been made, and the contract signed. Next please. This is a sad fact of a capitalistic society. Add to that the always profitable aviation industry (smile) and you have a cut-throat business. The biggest incentive that the upper-level management has to insure day-to-day operations run smoothly is to minimize losses. This leads to a trend. As sales begin to dip, more attention is paid to the operations side. As sales pick up, less attention is given. If it aint broke don’t fix it.

During Netjets negotiations the crews threw a wrench into that theory when they started to increase the daily operating costs. Although sales were still strong, operations became more expensive for a number of reasons that have already been discussed on this board. In this specific instance Netjets size was its biggest downfall. The company had to step in the form of a decent contract, that got operations back to its normal costs – and on we go. A contract that, in reality, cost the company MUCH LESS than a continued slow down would have.

The crews, and employees in general, are underpaid – plain and simple. This is NOT the airline business. Companies aren’t selling tickets. They are selling aircraft – dang expensive aircraft – and premium services to some of the wealthiest people in the country. Pilots aren’t flying from LGA to HOU twice a day for 15 days a month. They don’t get to close the door and not interact with the people in the back. They do much, much more than fly the airplane. And as already stated are the only ones that the customer really sees after the contract is signed.

They should be kept happy…and I think more companies are going to find that out the hard way….

What is a "special circumstance customer"?

 

[RNObased]

Wow! 24 posts before the thread took the inevitable turn for the worse, that has to be some kind of record.

RNO, why are you taking it so personally? He's been nothing but complimentary to the pilots througout the entire discussion. Disagree with his points if you must, but what end is served by calling him a liar?

Not taking it personal. Just don't think he is who he says he is, end of story. Believe him if you want, I don't.

 

[jonjuan]

Thanks for the response, Mr. Magoo. It verified what I've long thought: owners would be quite receptive to the idea that you get what you pay for, and would want a top-notch, professional flight crew to fly their family. They wouldn't expect to get that for the low wages many frac pilots are paid.

Because after all, NetJets pilots became 50% safer after the new contract and they are 100% safer pilots than FLOPs pilots.

"Why would I risk the life of my grandchildren in 50 million dollar plane when the guy flying it is paid .2% the cost of the plane annually"
Are you somehow comparing the pilot salary to the risk involved? If you pay him/her twice as much, will you cut your risk of death in half? Why didn't this go through your mind when the NetJets pilots were, until last year, the lowest paid in the fractional industry? IMHO, this says that you believe pilots are somehow less competent, care less about safety, and are more careless in the cockpit when paid less than counterparts at another company.


"Thankfully now I charter from an operator who knows me, gets me the same plane, and takes responsibility for screwups (which are less prevalent when there arent 50 people meddling on 1 task)." Are these charter pilots paid better, have better job security, and better trained , i.e. both pilots typed and recurrent training twice a year? Really doubtful. Not a charter company out there that regularly flies with 2 typed CAs. Why? Money. I'll bet you don't demand it because A) you don't know, or B) you don't care because the "charter company knows me" and this is more important than the actual experience of the pilots and their training. If it makes you feel safer, great. It certainly doesn't mean you are safer.

 

[netjetwife]

JJ, I'm sorry that my post wasn't clearer. What it was based on is the approach that I think the frac companies could take in explaining to their owners that rates were going up to reflect pay raises given to the pilots. We all know that the pax are getting a fantastic deal from the pilots who are very professional--even though many are not paid that way. I believe (and so does Magoo apparently) that the owners will understand that piloting skills and experience comes with a professional price tag, not a blue collar one.

Can safety and/or efficiency go up after labor disputes are settled? Yes, because enforced rest rules and less stress from financial worries can have positive affects on flight crews. Magoo was making that point and I agree with him. BTW, I had deliberately left out names of companies to include all of the frac pilots, as that situation (selling experience/safety to owners) applies to all pilots in the industry. I view all frac pilots as professionals even though, sadly, many get paychecks that don't reflect their skill....
Best Wishes,
NJW

 

[Corona]

For some background, I actually am the CEO of a public company that does not have an extensive need for travel and cannot justify (although my employees may feel we should) owning a private aircraft. I feel shareholder responsibility is crucial; thus if I needed a jet, I would own one. If I have to charter a jet I will. However if I have to get to Tokyo, there are 7 flights per day from JFK-NRT that can carry me comfortably and luxuriously. If I need to go from JFK-LAX and am not on a set schedule, why should I have my company spend 70k to charter me a plane to get me there and satisfy my ego? The answer is, I don’t. On the other hand, if a mid-level employee is visiting Dahlonega, GA, Nashville, Waco, and other spots off the track of the commercial airline “Riviera” than he or she can charter a small jet to do their work in one day so he doesn’t miss four days of work.

For personal travel, I will say I prefer the Private Aircraft as my family enjoys it and it’s convenient for our changing schedules and destinations. NEVER would I behave as a Tyco or an Enron CEO and have the shareholders of my company pay for a dog to be sent to NYC to be groomed and sent to us on a vacation in one day. Nor does my company pay for ANY personal travel. I feel sad this is not the norm, but I was raised to be honest. I feel such CEOs are irresponsible and their actions will (and usually do) lead to their downfall. Case in point, we acquired a company centered on one region of the USA (three states to be exact). All of their outfits were near major airports and their home office was near a hub for a major carrier. Yet somehow, through the magic of “creative accounting”, they were able to justify buying a G-III that was mainly used by the CEOs wife. Well, that plane was the first extravagant asset sold off.

I was reading a biography about Warren Buffett a while back & it was interesting to discover one of his methods for choosing companies: He looks at the management personnel as a go/no-go gate. If they are the type with the history of the "creative accounting" mentality as you stated, it's a no-buy.

Needless to say, BH never owned shares of Enron (& there are other reasons for that as well). I like seeing general aviation thrive in the corporate world, and think it's a shame that spoiled executives and their kin give it a bad name sometimes.

I appreciate your answer. I am guessing you have/had a position at one of the fracs and feel as I do.
It is inevitable that someone with responsibility turns frac outfits around. One of the beauties of the concept is that ideally an owner should be able to logon to a website or pick up a phone and get a plane with no hassle.

I haven't worked at a frac, but know some people who do. I don't much care to see good people twisting in the wind at the whim of vituperative management. I have worked corporate/charter jobs, however. Seeing large groups of my professional peers being abused does have an impact on my morale, and it's certainly not limited to the corporate/charter/fractional world.

I noted your earlier comment about how new frac owners can be less than thrilled to discover that unions are not only present in their new companies but the union movement is actually on the rise there, unlike most other industries. Unions most definitely have a place in this business, and much of the reason for that is due to predatory management behavior.

So the answer you are looking for is yes, I think I could do a better job. Would I desire to? No. Do I think that management at any of these outfits will do a thing until they either A.) Go bankrupt, B.) Suffer a fatigue related crash, or C.) Are crippled by a strike? No. It seems that there is a lack of communication and they will keep adding more owners to the deck of cards until it crumbles. But it can be done, and one of the three fracs will disappear and deal with a s***load of unhappy owners before the other two wake up and smell the Starbucks.

Yeah, this is pretty much what I've thought as well. I think the frac model is pretty powerful; it's just too bad that it's had such poor representation in the industry to date.

Cheers,

C

 

[NotFurloughed]

Here...

What is a "special circumstance customer"?

I'll tell you what a "special circumstance" customer is. It's the guy that makes he operator pay - one way or anoher - for every single mistake that is made. Usually a large or multiple-share holder.

It's like magoo said - it's the people who are tough customers and a general pain-in the -a## that usually get the best service. I don't know why such concessions are given to some people but they are

 

[Hogprint]

Mr Magoo posted:

If the fracs aren’t on this board, it is a sign of a serious systemic customer relations problem—which will blow up in their faces.

NJ's management are here. They post all the time...well not since the contract was signed, but they were here in droves. They found out the hard way the power of the internet. Their first wake up call was with the old 284 message board, then sites like this were they camped out 24/7 looking to spread misinformation. They also have moles on the union board.

Ask them how they fared on these sites. Other than getting the drop on info on the union board, they haven't scored many points here.

 

[Crack-Ed]

I'm with RNO on this- complete B.S. C'mon Magoo, you've nothing else to do? Being a CEO would probably command more of your time than allowing you to waste your valuable time posting on these boards? Again, B.S.

 

[AceCrackshot]

If he isn't at least a high net worth individual, I'd be surprised. Even if he isn't what he says he is, the Magoo is indeed correct.

In FLOPS case, MS simply doesn't have a very good hold on the type of individual our owners tend to be. I think I do, as I'm with them 16 days a month. Simply put, they tend to view value and cost in considerably different terms then most of the Joe Wageearners on this board. I've seen MS for example, treat the office manager of one the most important FLOPS owners like an underling. It was both illuminating and embarrassing at the same time.

Our owners are starting to see the frustration in our work. Most are concerned. Many are less worried about the pilots, and the more worried about the declining residual value of the aircraft, its overall condition, multiple MELs and the like. Most owners (as opposed to JetPass members) tend to see their stake as an investment, and one that is being mismanaged.

Magoo, like most owners, probably isn't aware of the RLA, the important differences between it and standard labor law, and probable length of a contract. As attitudes on both sides of FLOPS harden over the next 6 months, you'll see owners jumping ship.