NetJets Order

[Da Man]

Press Release Issued December 18, 2003 2:15:00 PM ET

NetJets(R) Places $360 million Order for 50 Hawker 400XPs and 8 Hawker 800XPs
WICHITA, Kan., Dec. 18 /PRNewswire-FirstCall/ -- NetJets(R) Inc. has placed an order for 50 new Hawker 400XP light jets and eight new Hawker 800XP mid-size jets from Raytheon Aircraft Company with a total value in excess of $360 million. The aircraft will be added to the NetJets fractional aircraft ownership program.
The order includes an option for an additional 50 Hawker 400XP aircraft, bringing the total potential value to more than $600 million. In addition, discussion is underway on a long-term maintenance agreement for this new order that includes the existing Hawker 800XP and Hawker 1000 business jets in the NetJets fleet of fractionally owned aircraft.
As a result of this order the Hawker 400XP will become NetJets' new entry- level fractional aircraft ownership offering. The eight Hawker 800XPs will join the 75 Hawker 800XPs and Hawker 1000s already in NetJets fractional aircraft ownership program.
Deliveries of the Hawker 400XP will begin in 2004 and continue through 2009. The Hawker 800XPs will be delivered beginning December 2003 and through 2005.
"Our commitment to providing the highest quality aircraft and finest service in the industry has been at the heart of our relationship with NetJets," said Jim Schuster, Chairman and CEO of Raytheon Aircraft. "NetJets' growing confidence in us is a giant step forward for Raytheon Aircraft and a clear affirmation that we have our priorities straight. This is a big day for Raytheon Aircraft employees everywhere."
"At NetJets we have the freedom to choose what we consider to be the best light, midsize and large cabin aircraft in the world," said Richard Santulli, Chairman and CEO of NetJets. "The Hawker 400XP provides us with an ideal entry level light size business jet. Its performance, interior and range make the Hawker 400XP another example of NetJets' strategy to continually offer NetJets owners the best aircraft to fulfill their business and personal travel needs."
The Hawker 400XP and its predecessor, the Beechjet 400A, is the most popular light jet in fractional service. The Hawker 400XP was introduced in May 2003 at the European Business Aviation Convention and Exhibition. The Hawker 400XP (eXtra Payload) features a 200-lb. gross weight increase over its predecessor, the Beechjet 400A. This gives customers additional operational capability to add another passenger, or operate with the same number of passengers and increase the fuel onboard by 200 pounds for increased range.
The Hawker 800XP is the world's best-selling mid-size business jet. It offers the largest cabin in its class, with typical seating layouts for six to 10 passengers in a variety of configurations. The cabin provides headroom and the ability to walk around with ease during flight. The Hawker 800XP is equipped with Honeywell TFE 731-5BR turbofan engines and features Collins Pro Line 21 avionics as standard equipment.
Raytheon Aircraft designs, manufactures, markets and supports Beechcraft and Hawker aircraft for the world's commercial, military and regional airline markets.
NetJets Inc., a Bershire Hathaway Inc. company, provides the safest and most secure private aviation travel solutions in the world. In 2003, NetJets will fly more than 250,000 flights to over 140 different countries. NetJets fractional aircraft ownership allows individuals and companies to buy a piece of a private business jet at a fraction of the cost of whole aircraft ownership, and guarantees availability 365 days a year with just a few hours notice. More information on NetJets is available at www.netjets.com

 

[Heavy Set]

Are these Beechjet orders incremental or are they replacements for the Encore? Will the 400XP/Beechjet compete with the CJ3 (are they not similarly priced)?

Should Netjets wannabe pilots be happy or nonplussed about this news (could this fortell more hiring soon or is the "no hiring in 2004" rumor true)?

 

[Da Man]

NetJets cancelled all their CJ3 orders, I believe they cancelled the Encore orders a while back.

Textron Confirms Confidence in Cessna Citation CJ3 Backlog
Friday December 19, 2:14 pm ET
No Financial Impact Expected from Recent NetJets' Order Cancellation


PROVIDENCE, R.I.--(BUSINESS WIRE)--Dec. 19, 2003--Textron Inc. (NYSE: TXT - News) today announced that it expects no financial impact resulting from NetJets' recent cancellation of 50 Cessna Citation CJ3 aircraft. With an industry-leading business jet backlog, Cessna expects the canceled order, which applied to jets slated for delivery in the late 2005-2008 timeframe, to be reallocated to existing customer orders.

 

[bartpearl]

Are these Beechjet orders incremental or are they replacements for the Encore? Will the 400XP/Beechjet compete with the CJ3 (are they not similarly priced)?

Should Netjets wannabe pilots be happy or nonplussed about this news (could this fortell more hiring soon or is the "no hiring in 2004" rumor true)?

As mentioned, the CJ3 order was cancelled. I was told by one of our salesman a couple weeks ago that Mr. Santulli was pissed at Cessna because of all the Encore problems, and that's what drove this deal (he also got them REALLY cheap).

Will it create more hiring this year? Remember, just because we order them doesn't mean we'll take delivery of that many this year. All indications I have is that the appropriate managers have been put on notice to not hire until our overstrength situation is fixed. That being said, I doubt you'll see any EXISTING Capt, or many FO's who are getting Capt pay, bid this aircraft. We do; however, have 50+ FO's on FO pay (read welfare), and that should take care of any BeechJet requirements for 2004.

 

[Diesel]

Actually bart I think you'll see quite a few captains bid the 400xp positions. Think about it. Your number 1300 in the company bottom of the captains in the ultra. So you bid the xp and become super senior, hold 7n7 tuesday start, any vacation you want. It's not a bad deal. I've talked to some 1000 number senority guys that are going to go over as soon as the bids open up. I mean really what is the difference. Both the ultra and the XP are hot in the summer and cold in the winter. They don't have an apu or external lav.

So I think a lot of junior captains in the ultra are going to go to the xp. Also quite a few senior FO's in the ultra will too. That way they have a little protection incase something happens to their capt pay when the contract comes out.

 

[bartpearl]

Actually bart I think you'll see quite a few captains bid the 400xp positions. Think about it. Your number 1300 in the company bottom of the captains in the ultra. So you bid the xp and become super senior, hold 7n7 tuesday start, any vacation you want. It's not a bad deal.

Good point, but before I seat locked myself in an aircraft no better (and in some ways worse) than the Ultra for a better schedule, I'd wait and see what the contract brings. By the time we actually start taking delivery of these things I think we're going to be very close to vote time.

Also, if someone is tired of going on the road and wants to sit home for awhile, bid a new fleet. The company has yet to learn how to start one up without wasting most of the pilots for the first 6-12 months.