Start-up Fractional Jet Republic Sought To Recruit NetJets Employees

 - August 25, 2009, 7:08 AM

Before new fractional company Jet Republic declared insolvency late last month, lawyers for the firm were seeking to lift a legal injunction secured by established provider NetJets Europe that prevented it from hiring NetJets employees. A court in Portugal granted the injunction in July 2008, before Jet Republic was officially launched. It specifically banned Jet Republic CEO Jonathan Breeze and COO Luis Vianna from making any attempt, directly or through intermediaries, to contact employees of operating company NetJets Transportes Aéreos.

“NetJets Europe welcomes new entrants to the business aviation market and wishes them the best of luck,” said NetJets in a statement on August 10. “We have a highly skilled workforce that is in high demand. We cannot comment in detail on the case but, as ruled by the Portuguese courts, there is an injunction regarding recruitment activity that was deemed unfair competition.”

NetJets Europe has stressed that the injunction, which is valid through February 2010 and can be extended, applies only to its current employees. However, according to Jet Republic, its own lawyers had advised the company not to process applications for employment even from former NetJets staff. Jet Republic claimed it planned to recruit 500 pilots out of a total new workforce of 1,000 over the next five years. It was due to receive its first aircraft next month.

Jet Republic implied that NetJets Europe should not seek to prevent its staff seeking new employment at a time when it was cutting capacity. In an August 11 statement, Jet Republic suggested that its established rival has been losing business for reasons that go beyond the industry-wide downturn in demand. Citing the J.P. Morgan Business Jet Monthly report from July this year, Jet Republic concluded: “NetJets is attributing its losses to the economic climate, but indicators suggest the downturn in the private aviation market bottomed out in April 2009. From an
all-time high in the summer of 2008, private jet travel fell, reaching a year-on-year low of -23 percent in April 2009. It has now stabilized at a fall of just under 20 percent. Similarly, used aircraft inventories steadily increased from September 2008 to April 2009 but have now stabilized in the past three months at 14.4 percent.”

However, Jet Republic’s ambitious recruitment plans were dependent on its selling shares in a fleet of up to 110 Bombardier Learjet 60XRs–as well as, apparently, obtaining financing. The purchase agreement consisted of firm orders for 25 aircraft and conditional orders for 85. Valued at $1.5 billion, it was signed in June last year before the European business aviation market descended into a serious slump.

Breeze himself is a former NetJets Europe commercial director. Other former NetJets Europe staff in Jet Republic’s senior management team are CFO Andrew Hiscock, marketing director Richard Thomas and financial analysis director Peter Tsvetkov. When the company launched in September last year, former NetJets Europe COO David Marcus was named director of flight operations, but he does not now appear on Jet Republic’s management roster.