The future of netjets.

[scubabri]

Being an ex-computer guy, I've worked for a lot of companies that have had rapid growth and hiring only to, a few years later, lay off a vast majority of those workers.

Netjets, from what I understand is operating at a loss, and the amount that they are hiring.. something has to give.

What is everyone's opinion on the overall health of the company and the, for lack of a better word, security of being a low seniority number there.

sb

 

[RNObased]

What is everyone's opinion on the overall health of the company and the, for lack of a better word, security of being a low seniority number there.

sb

I think the company will be fine if they ever get scheduling under control. If they don't, then who knows.

As for being a low senority number, I would say you are pretty safe. Now if you are middle manager in charge of paper towels, then you could be in trouble if the rumors coming out of CMH are even half true.

 

[TORCH67]

I'm sure you already know that aviation is a big crap shoot at best! When it comes to airline management and the future of the airline world, I would pick a fractional job every time. NJA doesn't have to show a profit to keep in business, they just have to cover expenses. Do a search on this subject and you will see hours of reading on how they hide profits.

 

[charley varrick]

Unless you have a job offer from either Fedex or UPS, I would say it is a risk worth taking . . . as far as aviation goes, that is.

 

[Hogprint]

Scubabri posted:

Netjets, from what I understand is operating at a loss, and the amount that they are hiring.. something has to give.

Don't believe everything you read or hear about these numbers. It is quite a few of our opinions these numbers were, let's say, manipulated for negotiation reasons at worst. At best they reflect the companies penchant for shuffling funds to other wings of the company, read NJE, NJ China, NJ Space program (I jest, but you get the point) to gobble up market share.

It is my opinion that the genie is out of the bottle. The folks we cater to are NOT going back to the airlines, and probably not going back to outright ownership, although we had a few jump back last year (negotiation anomaly) and this frax model is going to be around in one way shape or form for at least our careers. The name may not be the same, but the game will be the same.

 

[netjetwife]

Now I understand why guys like Griz and Gunfyter tell others to do a search when they ask a question that has been covered a lot already. ....sigh

NJA is part of a worldwide company, NJ Inc, and has the ability to easily shuffle the money around. They admitted to the pilots that profit from NJA was used to subsidize expansion, especially in Europe. None of the NJ pilots are worried and they still plan to hire a few hundred more this year. It isn't just NJA. Business aviation is in high demand.

The anti-union group would, no doubt, answer you differently.
NJW

PS Add Torch to my list at the top. He posted while I was typing.

 

[WrknStff]

Don't forget that if I understand it properly, hiring was artificially low during the contract negotiations and now they have to make up for lost time to get back to where they should be. Costs should go down with proper manning because one of the biggest expenses at a fractional is chartering flights. If they have to charter fewer flights because of proper manning, that saves the company a lot of bank.

 

[netjetwife]

True. Additionally, as has been pointed out before, the company also spent a lot of money buying up vendor time in anticipation of a strike. It seems to me that they could have saved everyone a lot of time and money if they had just used those dollars to help make the first TA acceptable.

 

[gunfyter]

Not having enough pilots = money loser. Selling off trips to Charter is an expensive alternative to not hiring enough pilots.

Scheduling has been very efficient in scheduling me. 220 hrs in 3 months... very little sitting around. They have adjusted to 91K. This is a hard business to do with a very complex set of variables.

As time dragged on for yrs without settling a new contract... Pilots tend to become demotivated. To assist in tackling the Complex and fluid variables in scheduling... one needs a HIGHLY motivated pilot force.

We are seeing this now. Also profits were made in US operations in prior yrs according to WB in annual reports to Berkshire Hathaway. These profits were more than consummed by the cost of expansion in Europe and other areas. However it is reported that these other operations are turning the corner. We are told not to expect profits in 2006. However, it will be interesting to see the CHANGE, and improvement 2006 should bring. A large correction toward Profitability would be a very good sign IMO.

 

[FLYLOW22]

Being an ex-computer guy, I've worked for a lot of companies that have had rapid growth and hiring only to, a few years later, lay off a vast majority of those workers.

Netjets, from what I understand is operating at a loss, and the amount that they are hiring.. something has to give.

What is everyone's opinion on the overall health of the company and the, for lack of a better word, security of being a low seniority number there.

sb

Huge differences BTW NJA and Brand X 121 carrier.

NJA makes the lion's share of money from sales. Operations (flying planes) is just icing on the cake. All NJA needs to do is raise prices the next time Owner contracts come due to offset expenses.

121... flies people who buy tickets from the man.

NJA... flies the man.

The type of customers NJA caters to aren't interested in $99 coast to coast nor is NJA pinned against the wall from competition offering $98 coast to coast.

Our Owners fly us becasue they want to fly specifically on NetJets.

 

[Publishers]

It is always nice to see peoples perception of the business they are in and how different it might be from the perception of people who look at it as a business from afar.
The Netjets business model depends on a number of things coming together in a way that produces a profit. First, they must order aircraft in significant numbers to drive the price down. They then package that aircraft and sell the individual pieces that sometimes make more than the whole.
They must arrange maitenance and various supplier contracts to drive down the cost which make up for the inefficiencies of their flight profile. In order for this to work, they make guarantees to the owners for service. All of this comes at a pretty penny. Lastly they have to hope that the market for used aircraft remains stable enough for the gurantees that they were talking about at the beginning hold true 5 years or so downstream. Obviously a maturing labor force is also part of the cost equation.
While the general concept of fractional ownership will continue to be a major element of the business, Netjets would well become the United Airlines of the fractional world, eaten up in the end by competition with significant cost advantages.

 

[hammer2]

Gfyter said they are getting 757s. I bought a type last week uknow a 2 day course and I got my resume ready.

 

[realityman]

Ummmm.......Publishers? What, exactly, are you talking about? Cost advantages from competitors? How so? We operate basically the same equipment, but NJA generally makes bigger orders so odds are we have the lowest costs there. Same with fuel costs. Probably same with maintenance costs, catering costs, ground transportation, etc........Yes, we have the highest labor costs now, but as been pointed out over and over and over and over ad nauseum, labor costs are actually one of the smallest portions of the overall expense pie. Combine that with the fact that sales are still sky high, we're still expanding like crazy in foreign markets, NJA keeps spending money on really silly things (think inflight medical help for Thurston and Lovey's poodle), and we charge the most, and I see about as decent a future here as anywhere in aviation (better really).
Now, if you're gazing into your crystal ball say, 20 years down the road, well, who knows? Heck, I couldn't accurately predict how Southwest will be doing in 20 years. Or American. Or UPS. Maybe things will pile up on us and we'll go extinct in 10 years, or maybe 20 years from now we'll be the only major fractional in the business.
For now though, NJA seems like a good bet and that's about all anyone can look at.

 

[notaNJApilot]

Something is fishy because management says the company isn't making a daily profit and they haven't hired anyone new on the corporate side for a couple months.

 

[Sctt@NJA]

I was at recurrent training a couple weeks ago when Santulli came in to chat with the pilots. Very interesting meeting. He squashed a bunch of rumors. (tilt rotors, interest in aquiring other fracs ect.)

He shared his vision for the future. He sees a limit on the the growth potential for this market. He threw out the number of 650 planes, but said that was just a made up number. He ruled out interest in VLJs. He would love to see SSBJs.

He shared his thoughts on who our customers are. They aren't the folks who are pinching pennies, they are the folks who want to belong to an exclusive club. He is going to focus on building up that exclusive club notion. When we are maxed out on growth he figures there will be a waiting list to join.

He saw national infrastructure as the limit on growth potential. (He commented "How many more planes can fit on the ramp at TEB?")

He said that the biggest problem right now is not having enough pilots. We have airplanes sitting uncrewed. The next problem is we have oversold our planes especially with Marquis. Charter selloffs are designed to be around 5%. There are too many selloffs right now.

Our prices are going up this year and again next year.

His ideas of who our customers are were very interesting. He has specific ideas of what they want and what we need to give them. Our customer base is not everyone who might use business jets. Just a subset. A high end subset at that.

 

[NJAowner]

NJA keeps spending money on really silly things (think inflight medical help for Thurston and Lovey's poodle), and we charge the most, and I see about as decent a future here as anywhere in aviation (better really).

A few facts here. NJA is not the most expensive. In the few fleets I looked at (Excel and Sovereign), CS is more expensive. In comparing to Flight Ops, NJA is not more than a meal a month more expensive than FlOps.

As far as the pooch, it is a great idea which probably will not cost the company much. Since many owners do travel with their pets, how do you find a good vet in a strange town. This is just an expention of what American Express does with the Platinum Card and NJA does with the Mayo clinic. And for the pilots, better to call an 800 number than try to line up a vet for Mrs. Thurston Howelll III's poodle while you are trying to fly and be attentive.

Fly safe.

 

[Stealthh21]

True. Additionally, as has been pointed out before, the company also spent a lot of money buying up vendor time in anticipation of a strike. It seems to me that they could have saved everyone a lot of time and money if they had just used those dollars to help make the first TA acceptable.

Hey I remember that. That's when the "scab" term was tossed over to the 135 pilots.

 

[realityman]

Ah, NJAOwner, my apologies if I offended you in any way. Mostly, we enjoy Thurston and Lovey's pets on the aircraft. Most seem to have very sweet dispostions, and I do like animals (although I know of one owner who muzzles his german shepard and advises the crews to let him know before we go back and use the lav because he'll want to hang onto the dog. that one doesn't give me case of the warm and fuzzies).

But I stand by my statement that it's not very practical, and even if it doesn't cost much, it's still NJA blowing good money on, at best, a mediocre idea.
What if something happens to an owner's pet while we're flying? The crew or the owner can call the pet medline, or whatever they're calling it. But then what? Guess what? NJA isn't stocking the aircraft with any sort of medications or things along those lines for pets. I'm not sure how well the AED would work on Rover, but I'll be the first to admit it might be fun to find out . And good luck getting fluffy to keep the nitro pill under her tongue! And while we do strive for the best service we can possibly provide here at NJA, I think you'll be hard pressed to find any of our crews willing to perform mouth-to-mouth on junior's pet python "squeezy".

As for finding a reputable vet in a strange town, not sure how well the veterinary community is connected, unlike the human medical community where we can call the Mayo Clinic and find a good doctor anywhere. Maybe it'll help. Or maybe we'd be better off just asking the airport folks, or even the local yellow pages, where the nearest and/or best vet in town is.

It's a nice effort on NJA's part to provide a higher level of service to our clients, but overall it just seems like someone back at HQ trying to justify why they should keep drawing a salary.

Thanks for putting me straight about NJA not being the priciest (sp?). All said and done, I thought we were the most expensive. Good to know someone else can make that claim.