The release of an Internal Revenue Service (IRS) memo on March 9 outlining guidance on how to apply the federal excise tax (FET) to fees paid to aircraft management companies adds to business aviation’s burden at a time when the industry continues to suffer from weak demand, high fuel prices and public criticism of this form of travel. This memo isn’t the first time the IRS has attempted to apply the 7.5-percent FET to non-commercial Part 91 flight operations.
The IRS has countersued NetJets for more than $360 million in alleged uncollected excise taxes. In November, NetJets sued the federal government for what it said were wrongfully imposed taxes, interest and penalties totaling more than $642.7 million. NetJets claimed that as a manager of private aircraft, it was not required to pay a “ticket tax” because its services were not taxable transportation.
NetJets Europe announced today that it is extending its ferry waiver zone, in which fees on positioning flights are not charged, for flights between 21 “business critical” airports in the Middle East and Europe. The extension will add Jordan, Saudi Arabia, Bahrain, Qatar, the UAE and Kuwait to the waiver, which previously included Lebanon and Tel Aviv. The company said it has witnessed “strong growth” in flights to the Middle East in the last few years, with 9.2 percent growth reported last year alone.
AeroMechanical Services, operating as Flyht, will provide NetJets Europe with the automated flight information reporting system (Afirs) and services for 30 Hawker Beechcraft 750/800XPs.
Thomas French, Aeromechanical Services’ CFO, told AIN, “We’ve been dealing with smaller groups, primarily regional carriers, specialty carriers and cargo operators with 30 or fewer aircraft. This places the technology we’ve developed over the years with a major player and takes us into another level.”
No one doubts that demand for business aviation is growing in Asia, but is the available aircraft capacity being developed sufficiently to meet this demand? It is not, according to Jean Noel Robert, president of the Asian Business Aviation Association (AsBAA), who believes that the lack of available charter aircraft is a real impediment to growth.
The world leader in fractional ownership is coming to China, but fractional shares won’t be on its service menu here–at least for the time being. After years of looking to enter the Chinese private aviation market, here at the ABACE show yesterday NetJets finally confirmed plans for a new joint venture in the People’s Republic of China.
After years of looking to enter the Chinese private aviation market, NetJets finally confirmed plans for a new joint venture in the People’s Republic of China today at the Asian Business Aviation Conference & Exhibition (Abace) in Shanghai. Though NetJets is known as the company that pioneered the sale of aircraft fractional shares in the U.S. and Europe, its services in China “will begin only with managing and chartering aircraft that are wholly owned by customers” rather than fractional ownership.
NetJets has attained Level III of the FAA’s safety management system (SMS) pilot program. As such, NetJets is the first fractional operator, as well as the first fixed-wing Part 135 operator and the first combined Part 135/91K operator, to achieve Level III. The FAA SMS pilot program, which has a four-level system of acknowledgement, is intended to help operators develop and implement a comprehensive SMS for their entire organization through safety-centric policies and risk mitigation.
After almost a decade of controversy, four years since the first complaint was filed and several postponements of the actual trial, the Bobigny Criminal Court (a French court near Paris Le Bourget Airport) decided on Tuesday to acquit NetJets Management Ltd and NetJets Transportes Aéreos (two companies trading as NetJets Europe) in a case where they were accused of employment practices contrary to French law. All civil plaintiffs’ claims were rejected.
Bombardier Aerospace today reported revenues of $8.6 billion last year, down from $8.8 billion in 2010, while pre-tax profits slid by $52 million year-over-year, to $502 million.