EBACE Convention News

NetJets Europe Formally Launches Aircraft Management Business

 - May 15, 2012, 6:30 PM

Fractional ownership giant NetJets Europe (EBACE Stand 7051) is diversifying into aircraft management services. In an interview with AIN, sales director Marine Eugene explained that NetJets Aircraft Management has been established as a separate operation and will soon have its own air operator’s certificate (AOC). It will focus on large-cabin and long-range business jets, from the size of the Dassault Falcon 2000 upwards.

The management services will include flight planning, hangarage and maintenance. NetJets is also taking care of crew hiring and training, but Eugene made it clear that its fractional fleet crew will not operate managed aircraft, and vice versa. It will charge a monthly management fee based on a projected number of annual flight hours.

The owner of a NetJets-managed aircraft will be given the option to make it available for the fractional business, which will give NetJets additional capacity without buying aircraft.

According to Eugene, this is not the main goal of the new program, which primarily is a way to engage with prospective customers who wish to join the fractional ownership program but are not in a position to do so. “Some aircraft owners come to us and tell us they wish they had not bought their jet [and that] they’d like to sell it, but market conditions are difficult right now. We don’t want to cut this conversation,” she explained.

The managed aircraft will be based at the owner’s preferred location. NetJets will advise the customer on the number of crew they need, depending on how often and how far they fly. The customer will benefit from NetJets’ negotiated prices in fuel, handling services and other aspects of its service.

The company is not interested in all aircraft types and will manage only those it already operates. It also is giving priority to those types that are most in demand in the fractional sector: the Falcon 2000 and 7X, Gulfstream G550 and Global 6000. Finally, it may welcome a smaller aircraft like a Cessna Citation Bravo if the owner, in addition to inking a management contract, buys a share in a fractional program.

NetJets has long been in the management business in the U.S., and in Europe it already has a handful of aircraft under management contracts. For the next 12 months, managed aircraft will operate under its existing Portugal-based AOC, which should change when the second AOC comes on line.

Europe’s Fractional Fleet

Separately, NetJets Europe currently has more than 130 aircraft in its fractional ownership fleet. The next types expected to join the fleet are long-range Bombardier Global 6000s (beginning late this year or early next year) and Embraer Phenom 300 light jets. The latter aircraft’s delivery schedule is not yet firm.

The company employs 1,500 personnel in Europe for its fractional program. Will it hire more for NetJets Aircraft Management? “Most positions will be filled internally,” Eugene answered, although non-NetJets pilots may be recruited.

Last year it closed its NetJets Middle East venture, but in March the company announced plans to launch management and charter services in China. So what’s happening to fractional ownership? “Fractional is still very much here,” replied Eugene. “The ongoing downturn is making its benefits even clearer; the possibility to buy a share is such a powerful argument against buying the whole aircraft. Many of our customers are increasingly traveling to emerging countries, compared to four years ago. Today’s economy validates the model.”