Navajo31

Fractional owners come in many flavors. Among them you will certainly find:
1. The uber-wealthy who "don't care if Jet A is $2 or $7 a gallon". They will continue to go to Cabo and Aspen and Boca, and take the nanny.
2. The rather wealthy who will notice the price of Jet A. They will continue to pay their monthly management fee, and use their hours when it is appropriate for their personal or business life. They will probably fly less, but stay with the program.
3. The pseudo-wealthy, who overextend financially to buy a share or even a 25 hour card - and then act as if they own the entire FLEET when they invite their friends aboard. They will not be able to renew their card, might have to back out of their share contract, and will have to go back to flying the 757 to West Palm Beach to get to the condo for which they dramatically overpaid.

If you know the percentages who fall into each category, your crystal ball is better than mine. In the meantime, I will continue to greet and treat each passenger as if they fall into the first category - and hope they really do!

BLott4

Airbus 320,
The reason that people are coming after you is your opening statement:

Customers of Net Jets are marginal clients to begin with

Unless you have some data you would like to share about the confidential owner lists of Netjets, this statement is very derogatory. Old/young, experienced or not, when you make baseless claims, you get peoples hackles up.

Jetcap37

The ones that will yell the loudest at you are the ones working for this company or a company very similar. They feel insecure about what you just said. Maybe they have heard something or are very low on the seniority list, possible even got yelled at by their wives about all this.

BoilerUP

True...but the upside to some operators is the nature of their business is NOT one that is easily supported by commercial airline service. Fractionals make financial sense if an owned aircraft flies less than 200hrs per year; above that it starts to become more cost effective to operate your own airplane (at least for a light jet).

One's fortunes can change in an instant, but our company is on pace for record flight hours this year, even in the face of record fuel prices and then a sharply down economy. Even with all these headwinds, our flying is strong. Right now, that's a really good problem to have...

To answer the original question - yes, Netjets will survive and I don't think that outcome was really ever in doubt.

sandlapper

Seems to me like a lot of you NJ guys are whistling past the graveyard. I remember hearing similar bravado from the guys at United and American in the late 90's. True, NetJets owners are not affected by the price of jet fuel. They are affected, I'd imagine, by the rest of the financial markets melting around them as we speak.

GM execs just got scolded for flying their corporate jets to Washington to beg for bailout money. How long until the same outrage is shared by some corporation's shareholders whose stock is in the toilet while the execs are jetting around the country at 20K a pop? The economic conditions that led to the growth of the fractionals are disappearing. Fast. What do you think happens next?

The "let's just not talk about that unpleasantness" approach won't change the reality of how ugly things could get.

faipsrule

I don't think anyone is ignoring the financial situation around us. Yes, some businesses and individuals WILL liquidate their shares. However, some businesses consider flying a necessity to their operations. Others look at the math and decide that they can get by with less hours or only use the company asset when conditions warrant. Everyone will take a hit in the years to come. NetJets has more than a few positives going for it like little or no coporate debt and Warren Buffet has a little money lying around to support them if financial support is needed. If you don't think not having to go to a bank to secure a loan in these times isn't a massive advantage for any company you haven't been paying much attention to financial markets lately. Public sentiment is against such luxuries as private jets, and that probably will effect business in the short term. But as soon as Obama decides on a dog or Lindsay Lohan crashes a car, public opinion will turn elsewhere, like it always does. The answer to the question is probably. NetJets will probably survive. Right now no one can be certain about anything financially. But if you had to choose any, and I mean any, company involved in the transportation of people by air for financial reimbursement that would probably be around in 10 years, I think NetJets is probably the one.

USMCFLYR

Actually I would want to now why they AREN'T using a fractional instead of spending all that extra money on their own fully funded flight department. I understand that they need quick access and time is money and most of the fracs can have that plane to you by the time you make it to the airport to board it seems. Then if you need global services there are some that can still provide that. I guess the reason probably lies in the tax laws and other such complicate matters which I can not even begin to understand. Btw - didn't all of the big three get scolded for the same thing?

USMCFLYR

9999

Very interesting thread. Do any of the NetJet pilots posting in this thread feel there might be a little 'FAT' to cut? What I mean is, you guys get 4 crew meals per day wether you eat them or not....correct? I have also read that it is very easy to get overtime for this or that....all union mandated correct? The point I am trying to make is United was the same way prior to 9-11. They were the biggest on the block and had the best union contract as well. EVERYONE wanted to fly for United....we all know where they are now.

What are the similarities with the union contract at NetJets in this day and age....if any? I am asking this because no one else seems to be getting to the point. To me, based on reading the threads posted by the NetJets pilots on this board and others, there seems to be alot of 'FAT' in the company, and things are slowing down. I can provide links to these comments by NetJets pilots if need be. Will the union budge if needed.....or are they like the UAW?

This is going to be a very interesting couple years indeed. Nothing but best wishes for everyone. I certainly hope the worm turns.

BoilerUP

I don't work for Netjets...but it sure seems as though a few are hopeful NJA falls on hard times, if only to drop those NJA pilots with attitudes (a small minority) down a notch. IMO, that's a crappy reason to wish ill will on a company.

Because fractionals simply ARE NOT cheaper than an owned flight department once you get beyond a certain number of annual flight hours.

For my company operating a Citation II, we could operate our airplane 375 hours for the cost of 200 hours (quarter share) in an NJA Ultra...not counting fuel surcharges or acquisition cost of the quarter share ($2.2M as of 13 months ago). Seeing as though our 5 year annual average was about 350hrs per year, it made financial sense to keep our current airplane and the boss even ordered a new airplane as a replacement.

Beyond pure operating economics, many companies want to have direct operational control and want to know EXACTLY who is flying them.

HIREME

you're right, fracts are not cheaper on the bottom line in that case...BUT, a business has to factor in the liability and headache of their own flight dept. For some, it's a fun, exciting, and status symbol venture. For others, it's a headache they'd rather pay someone else to take care of.