Preparing for future growth of its U.S. and European operations–and in spite of mounting losses–fractional ownership giant NetJets has placed orders for 72 business jets valued at more than $1.6 billion.
NetJets Europe’s order for 24 Dassault Falcon 7Xs reflects a powerful declaration of intent for both companies. For Dassault, the deal–valued at $1 billion–is its largest single business jet sale ever and a vital fillip for the 7X program, which now has an order book for 116 copies of the fly-by-wire trijet.
Contract talks between NetJets management and pilots broke down once again on September 12, three days shy of a scheduled 30-day marathon bargaining session. The pilots’ union negotiation committee said it walked out of the talks “because the company has continuously failed to respond to the union’s position regarding the pilot group’s bargaining thresholds,” namely salary expectations.
A former NetJets researcher places high odds on the likelihood of the fractional pioneer operating a fleet of supersonic business jets. Michael Baur, now with air-limo start-up Pogo, told attendees at last month’s SATS demonstration in Virginia that, while at NetJets, he reported directly to chairman Richard Santulli on his research into the suitability of VLJs and SSBJs for frax ops.
All of the major providers have jet-card programs: NetJets has Marquis, Flight Options has JetPass, CitationShares has Vector and Flexjet has Premier Fleet. It should be noted that the Marquis program is unique among the card programs because it is run by an outside party that buys shares in NetJets aircraft and resells blocks of time in them. The other three fractional providers administer their respective jet-card programs themselves.
Although it is approaching its 20th birthday, the fractional aircraft industry is still very much mired in adolescence. It’s come a long way since NetJets chairman Richard Santulli invented the concept of fractional ownership and launched his program in 1986, but the industry still has a long uphill road ahead.
In his annual letter to shareholders, 75-year-old Berkshire Hathaway chairman Warren Buffett addressed the issue of management succession at his company: “As owners, you are naturally concerned about whether I will insist on continuing as CEO after I begin to fade and, if so, how the board will handle that problem. You also want to know what happens if I should die tonight.”
When Berkshire Hathaway chairman Warren Buffett speaks, everyone listens. As usual, he spoke aplenty in his latest annual letter to shareholders, which was released early last month.
Twenty years after its birth, the fractional concept is finally a mainstream part of the business aviation industry. It didn’t start out that way, and one need only look at the current chorus of very light jet air-limo naysayers to get an idea of how the business aviation community reacted to fractional aircraft ownership in 1986.
The nine-month-old NetJets pilot contract, which raised wages substantially, isn’t having the speculated adverse effect on profits at the fractional provider. According to
parent company Berkshire Hathaway first-half financial report, revenues from NetJets for the first six months increased $347 million, or 26 percent, over last year,
- Page 10