I didn't know Netjets lost THIS much money.

Italianaviator

Italianaviator

Well-Known Member
http://www.nytimes.com/2009/12/04/business/04buffett.html?_r=2&dbk

The recession has taken a toll on the business, though. NetJets lost $531 million in the first nine months of 2009, and revenue fell 42 percent from a year earlier, to $2 billion. And that was not its first loss. Although NetJets had pretax profits between 2006 and 2008 of more than $550 million, according to one person knowledgeable about the company who spoke only under condition of anonymity, its record has been spotty.
 
How much of that loss is a write-down on the value of their jet fleets as opposed to operating loss?
 
A little off topic but I flew with a couple people who went to Net Jets and a couple Captains have spouses over there. I didn't know much about them other than they were a good fractional that paid pretty well until I started asking questions. Its amazing to me how they could be as large as they are/were while their services were only viable to less than 1% of the population. It just doesn't seem like a very viable business when you have one of the bigger airlines in the country (fleet size and pilot group) and less than 1 person out of 100 can afford you. It just doesn't add up to me... I could see it working on a much smaller level but I think Net Jets out grew themselves and when the recession hit it effectively crippled them.
 
SoCalAprch said:
A little off topic but I flew with a couple people who went to Net Jets and a couple Captains have spouses over there. I didn't know much about them other than they were a good fractional that paid pretty well until I started asking questions. Its amazing to me how they could be as large as they are/were while their services were only viable to less than 1% of the population. It just doesn't seem like a very viable business when you have one of the bigger airlines in the country (fleet size and pilot group) and less than 1 person out of 100 can afford you. It just doesn't add up to me... I could see it working on a much smaller level but I think Net Jets out grew themselves and when the recession hit it effectively crippled them.
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You have to remember the disproportionate distribution of wealth, too. A very small percentage of the world's population owns more than a majority of its wealth.
 
I heard a rumor that somewhere in the region of 300 hulls are going to be released - what on earth is that going to do to the market?

Bp244
 
Baronpilot244 said:
I heard a rumor that somewhere in the region of 300 hulls are going to be released - what on earth is that going to do to the market?

Bp244
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Well aircraft resale values are already down, I believe 40%. Don't quote me on that number but I believe its close to that.

I used to work with an aircraft broker and he was very worried if these extra planes hit the market because it will push the prices even lower and that would mean lower commission checks for him.There are more BBJ's and BBJ fractions for sale now than ever before, just because no one wants to allocate money that way right now.
 
Italianaviator said:
I used to work with an aircraft broker and he was very worried if these extra planes hit the market because it will push the prices even lower and that would mean lower commission checks for him.
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That has been a fallacy for over 10 years. Call it the chicken little theory. People were scared that we would kill the used market when we sold off planes. However, over the years, we have retired the entire fleets and it was hardly noticed. Further, the level that planes were maintained preserved much of their resale value when compared to competitors. The single biggest factor on present values is the economy itself.

OP: I wouldn't look to the NYT as a reliable source.

SoCalAprch said:
Its amazing to me how they could be as large as they are/were while their services were only viable to less than 1% of the population. It just doesn't seem like a very viable business when you have one of the bigger airlines in the country (fleet size and pilot group) and less than 1 person out of 100 can afford you. It just doesn't add up to me... I could see it working on a much smaller level but I think Net Jets out grew themselves and when the recession hit it effectively crippled them.
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Outgrew? No, to be honest, the fractional market was barely scratched. Also, the market is less than 1%. The US population is 300,000,000. 1% would be 3 Million people. Coincidentally, there are 3 million millionaires in the US.
http://en.wikipedia.org/wiki/Millionaire
 
NJA_Capt said:
That has been a fallacy for over 10 years. Call it the chicken little theory. People were scared that we would kill the used market when we sold off planes. However, over the years, we have retired the entire fleets and it was hardly noticed. Further, the level that planes were maintained preserved much of their resale value when compared to competitors. The single biggest factor on present values is the economy itself.

OP: I wouldn't look to the NYT as a reliable source.


Outgrew? No, to be honest, the fractional market was barely scratched. Also, the market is less than 1%. The US population is 300,000,000. 1% would be 3 Million people. Coincidentally, there are 3 million millionaires in the US.
http://en.wikipedia.org/wiki/Millionaire
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I wouldn't use wikipedia as a reliable source.
 
I heard most of their flights were actually empty for a while just repositioning planes.... great way to make money... although it hurts to see them postponing their growth at CMH due to the losses.

RD
 
pullup said:
I wouldn't use wikipedia as a reliable source.
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Geez dude. Lighten up. It was an e-x-a-m-p-l-e. :cool:
Here is this accurate and current enough?
as of 01:12 UTC (EST+5) Dec 07, 2009, the US population is 308,098,152.
http://www.census.gov/

The 2009 World Wealth Report from Capgemini and Merrill Lynch says there are a lot of millionaires next door. Including only investable assets, these experts figure there are 2.5 million Americans with $1 million or more.
http://www.forbes.com/2009/10/01/ne...nk-personal-finance-net-worth-calculator.html

I hope the US Census Bureau, Forbes and Merrill Lynch are credible enough.

rd757 said:
I heard most of their flights were actually empty for a while just repositioning planes.... great way to make money...
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Do you really think we would have been in business since 1964 if we ferried more than we flew revenue??
 
It sure looks like Segrave ferries more than it flies revenue flights, lol or at least used to before they were forced to downsize.
 
Working for a major airline, I have no legitimate comment on this thread. :)


That being said, wikipedia is overall quite accurate as long as you check the sources.
 
NJA_Capt said:
Do you really think we would have been in business since 1964 if we ferried more than we flew revenue??
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According to wikipedia Netjets was a charter company until the late 80's, so your current business model hasn't really been around since 1964. Kinda misleading to imply that.
 
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