"...the frac model simply doesn't work "

[gunfyter]

...
The union did not cause management to shut down the Cessna frac business. People who believe this, pro or anti union, do not have a clue. Sorry to say it, but the company probably did the right thing because the frac model simply doesn't work except in a period of high new owner sales. The actual operation of the a/c loses money and profits have to come from share sales or other sources.
....

I am curious to see what BRK reports as Netjets results for 2011. Except for the Financial Crisis ... NJ has had several $200M plus profitable years according to the annual Reports.

IMO, Fracs will work. I think the smaller, slower and shorter range ships are money losers... but needed for the overall system. The right mix of jets and support for it ... might be the trick.

 

[BentOver]

I am curious to see what BRK reports as Netjets results for 2011. Except for the Financial Crisis ... NJ has had several $200M plus profitable years according to the annual Reports.

IMO, Fracs will work. I think the smaller, slower and shorter range ships are money losers... but needed for the overall system. The right mix of jets and support for it ... might be the trick.

If it didn't work there wouldn't have been nearly 1000 frac. jets in use back in 2007...... Netjets does 2300-2600 passenger flights a week (still). Some days, like this Friday and Monday, well over 500 each day...

The model still works, maybe not as well for smaller places, but I don't really think NJA is hurting as bad as M.L. says it is......

If it really didn't work for NJA, they wouldn't still have 2500+ pilots on the payroll. With absolutely zero sign of that number decreasing. (contrary to M.L. syas IMO)

I never understood those that say the model doesn't work. Fracional flying is nearly the same as charter in the way that users use the a/c, except for the cash outlay. In the end the buyer has ownership in a tangible asset. Sure, in some cases, like the worst recession since the 1930's, that asset loses big. But for the most part an owner gets the write-offs. Use of a plane and can sell said asset GUARANTEED in 5 years.
(or even 2.5 years)

NJA may be more expensive, but so are alot of things. I'm not rich but I choose to shop at Target or better vs. Walmart. Why, because I can afford NOT to shop at Walmart. Wealthy people buy $80K cars that get them to the same places in the same time as my $40K Dodge 1500. They buy those things because they can. If I could afford a nicer car I'd go with a nice 6 series BMW or Mercedes also. It's just the way it is. People who can afford to fly private, but don't want their own whole jet, will most often choose the nicest thing their money can buy within reason. Fractionals, Netjets specifically, is a very luxurious and prestigeous way to travel vs. Joe Shmoe's Charter. And some people want to have that prestige around them.

Owner retention was very high in 2011. Sales didn't cover the losses, but it doesn't sound all that devastating going into 2012.


I am expecting to hear some form of recall news around 24+/- months from now. I'm still holding the faith that the things are not as bad as they are painted to be.

EDIT: Sorry, I should have started out by saying I agree with you. Just in case the msg. didn't come through like I wanted.

 

[Helmsalee]

Just checked Flight Aware. 106 NJ jets in the air. I love it when you have to go to 3 pages.
Helm

 

[Helmsalee]

And that does not count the planes flying international using the N number callsigns.

 

[brokeflyer]

netjets is more expensive because their pilots are better.

 

[gret]

Just checked Flight Aware. 106 NJ jets in the air. I love it when you have to go to 3 pages.
Helm

What percent of the fleet does that represent? Should be a lot of activity on the Thursday before one of the busiest weekends of the year.

AIN Alerts had this little piece today-

Bizav Flying Recedes for Second Consecutive Month

Business aircraft flying activity in the U.S. slid 0.9 percent in January versus the year-ago period, according to TraqPak data from aviation services company Argus. This marks the second consecutive month of erosion on a year-over-year basis. While Part 91 flying climbed by 4.5 percent over January 2011, it wasn’t enough to offset losses of 6.3 percent and 8.3 percent, respectively, at the fractional and charter providers. Flying activity at Part 135 charter operators has now declined for 12 consecutive months.​

 

[Webslinger]

What percent of the fleet does that represent? Should be a lot of activity on the Thursday before one of the busiest weekends of the year.

AIN Alerts had this little piece today-

Bizav Flying Recedes for Second Consecutive Month

Business aircraft flying activity in the U.S. slid 0.9 percent in January versus the year-ago period, according to TraqPak data from aviation services company Argus. This marks the second consecutive month of erosion on a year-over-year basis. While Part 91 flying climbed by 4.5 percent over January 2011, it wasn’t enough to offset losses of 6.3 percent and 8.3 percent, respectively, at the fractional and charter providers. Flying activity at Part 135 charter operators has now declined for 12 consecutive months.
​

Guys...Im all about being positive..lets face it though. Under Obama and the current condition of our economy there will be more layoffs this year from many of the fractionals...if you really think that NJA is "bringing guys back" you living in a fantasy world...wake up, stay positive but for crying out loud see things the way they are!

 

[Helmsalee]

"What percent of the fleet does that represent?"

Well, according to the union info, there are less than 400 active airframes. That would mean over a quarter of the fleet airborne.

 

[Club ORD FO]

I think it depends on how you define the fractional model. Company A makes their money selling the plane and then operates them for a wash or a loss. Company B deeply discount the sale and thus makes almost no money on the aircraft sale but operates that aircraft for a gain on each live leg. Company C makes a little on the sale, and a little on each live leg.

Company C for the win

 

[BentOver]

What percent of the fleet does that represent? Should be a lot of activity on the Thursday before one of the busiest weekends of the year.

AIN Alerts had this little piece today-

Bizav Flying Recedes for Second Consecutive Month

Business aircraft flying activity in the U.S. slid 0.9 percent in January versus the year-ago period, according to TraqPak data from aviation services company Argus. This marks the second consecutive month of erosion on a year-over-year basis. While Part 91 flying climbed by 4.5 percent over January 2011, it wasn’t enough to offset losses of 6.3 percent and 8.3 percent, respectively, at the fractional and charter providers. Flying activity at Part 135 charter operators has now declined for 12 consecutive months.
​

Management openly said that January traffic was weak compared to last year..... But this week NJA is right back up to 2400 and something flights....

The weekly update stated Friday and Monday were going to be 500+ flights (I believe, been a week since I read it)...... 100+ airplanes airborne is alot compared to the usual 60-80 airborne at any given hour...I'd expect tomorrow to be busy all day and Monday also.....

And to the guy blaming Obama... Go back to Fox news....Open your eyes to the reality that although it is a slow process things are improving... Where I live there are commercial construction projects starting all over the place. The amount of foreclosures in my neighborhood is way way down. And last I checked the stock market, which is a leading indicator, is showing a lot of underlying strength this year. (even with the bad Euro zone reports and Greek default talk) The fear is pulling back and will be giving way to increased spending and confidence...

How that translates to people willing to spend millions flying??? Hope it's positive and right quick.

If layoffs come it will because of the competition, or a change in business plans. Not the fault of the business model (frac. flying)