"...the frac model simply doesn't work "

[ozpilot]

netjets is more expensive because their pilots are better.

Well I guess that explains why the G-wizs are more expensive that a Citation X!

 

[rettofly]

netjets is more expensive because their pilots are better.

Nah. It's because of the union contract.

 

[CALRepublic]

Going by that "DO NOT DISTRIBUTE" letter we got from management, NJA's financial results for 2011 should be slightly better than 2010 (unless I read it wrong). Supposely we made $204 mil in 2010. If you Netjets guys still have that email, you should be able to come up with a final figure for '11....

I believe we lost money 2Q 2011 and that was due to the Gulfstream cancellation fee, supposely that was a pretty good hit

 

[Hogprint]

Nah. It's because of the union contract.

So...

How do you reconcile the math between '97-05?

 

[BentOver]

Going by that "DO NOT DISTRIBUTE" letter we got from management, NJA's financial results for 2011 should be slightly better than 2010 (unless I read it wrong). Supposely we made $204 mil in 2010. If you Netjets guys still have that email, you should be able to come up with a final figure for '11....

I believe we lost money 2Q 2011 and that was due to the Gulfstream cancellation fee, supposely that was a pretty good hit

Furloughed so don't get the updates, but that was my take also. The cancellations hurt 2nd quarter (to the tune of nearly 50 million??), but other than that it was relatively good. (depending on how the books are cooked)

But a profit is a profit on the eyes of shareholders! If it says profit, they will be happy, no matter how the numbers are derived.

 

[mtnrunner]

It's fair to say that there are various financial models tracking NetJets. This is for a number of reasons, the two most significant are the used aircraft market and OEM's.

Why?

Brokerage and Search Firms:
NetJets has a significant impact on used private jet prices. One of the reasons the used market is so depressed is the common knowledge NetJets has a significant used inventory where over one hundred have hit the market, another hundred are positioned to hit the market, and another hundred are being positioned to hit the market over the next two years. Ironically, by and large these aircraft are being refurbished to compete because that all these high time high cycle airframes being sold at crazy low prices are good for.

OEM's (All part of Fortune parent companies)
The OEM's know NetJets dumping large blocks of old aircraft on the market hurt the specific OEM's new aircraft backlog and used aircraft prices.

NetJets is under an industry-wide private aviation microscope and nobody believes NetJets is cash positive. Accountants can be as creative as they want and profits often reflect the finance departments creativity. But cash, positive cash-flow, and owners equity are the name of the game.

But from a pilot or labor perspective who cares? According to Berkshire and NetJets management NetJets is doing great! So every labor unit should expect to secure better job security, wages, and working conditions throughout the next cycle of bargaining.

If NetJets is truly posting net earnings of $200 plus million a year -- every unionized pilot, flight attendant, dispatcher, and mechanic should insist 10% - 20% increases in pay.

Not rocket science here but record profits don't produce labor concessions, record profits produce new standards in job security, wages, and working conditions.

NetJets is Warren's problem as a result of his own failures and nobody else's. Don't put it on your shoulders. Enjoy the ride as best you can! Worry more about steering the boat you're in, more so than redirecting the river you're riding... Its a much more productive energy.

Its been a fun ride - no doubt about it. Everyone should find a way to enjoy the ride to the end... :beer: ...tomorrow or decades from now!

 

[BentOver]

If NJA management was trying to leverage the pilots in any way they haven't exactly followed the old playbook...

--Posting profits

--Dispelling any furlough rumors

--generally claiming things are fine at NJA


All these (and some more) are not the usual, "we need a concessionary contract because we are going bankrupt" tactics....

I find myself slightly more positive about NJA's future

 

[gunfyter]

$200 Million is not much money ... for the amount of planes being operated... and the total number of employees....

How much would you pay for a business that you could expect to earn $200M per year, consistently? I would probably pay $1-2 billion. A 10% to 20% ROI. But I don't know much about investing in businesses otherwise I would be in the back rather than the front of the airplane.

I don't know how much BRK has invested in us.

 

[gunfyter]

Marquis Card.... Don't leave home without it?

Another way to look at it is as though BRK bought a Bank that issues credit cards. American Express charges some fee to the vendors who accept the AMEX card, I guess about 3%.

Look at NJA as a Merchant that has $5Billion in transactions mostly from people who have BRK A-shares. The $200M in profits that NJA makes on the $5Billion in transactions is 4%.

That's better than the 3% AMEX gets on their Card.

 

[gunfyter]

More like the playbook for a sale to another entity.

If NJA management was trying to leverage the pilots in any way they haven't exactly followed the old playbook...

--Posting profits

--Dispelling any furlough rumors

--generally claiming things are fine at NJA


All these (and some more) are not the usual, "we need a concessionary contract because we are going bankrupt" tactics....

I find myself slightly more positive about NJA's future

A sale price of $1-2 Billions (10-20% annual ROI) ... and a 4% profit of all cash flowing through NJA ....

Attractive Investment for sale?
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