Fractional aircraft provider NetJets’ second-quarter revenues fell 43 percent year-over-year to $550 million, and for the first half dropped $1.024 billion–or 42 percent–from the same six-month period last year.
In a seismic event for the business aviation industry, NetJets founder, chairman and CEO Richard Santulli yesterday resigned his position at the company, effective immediately. Santulli, credited as the “father of the fractional aircraft industry,” said he will remain with NetJets–a Berkshire Hathaway company–as a consultant for at least a year.
A voluntary furlough-mitigation program collaboratively formed in April by NetJets and its pilot union, the NetJets Association of Shared Aircraft Pilots (NJASAP), has averted layoffs and furloughs. “Through innovative and purely voluntary measures, NetJets has been able to align our pilot and other areas of our workforce to match our current owner demand levels,” NetJets chairman and CEO Richard Santulli told AIN.
Revenues at Berkshire Hathaway’s services group–which includes fractional provider NetJets and flight-training provider FlightSafety International–were $8.435 billion last year, an increase of $643 million over 2007. While FlightSafety helped contribute to increased earnings in the division, lower earnings at NetJets offset those increases.
NetJets pilots will be consolidated into a system-wide seniority list, per a letter of agreement between NetJets and the NetJets Association of Shared Aircraft Pilots (NJASAP), the in-house union for NetJets Aviation (NJA) pilots.
NetJets pilots will be consolidated into a system-wide seniority list, per a letter of agreement penned by NetJets and the NetJets Association of Shared Aircraft Pilots (NJASAP).
Executive Jet Aviation owner and CEO Richard Santulli brought the fractional-ownership concept to the business aviation community in the mid-1980s. Santulli created a program called NetJets, selling aircraft in shares ranging from 1/16ths to halves.
Avolar, the budding stand-alone fractional business jet division of UAL Corp., stepped up its launch effort last month with a pair of new aircraft orders–despite a current economy that has other fractional providers turning to new marketing tactics. To boot, the Avolar business plan is ahead of schedule. Avolar president Stuart Oran said at the NBAA Convention in New Orleans last month, “We are now operational.
With the consummation of the Flight Options/Raytheon Travel Air merger on March 21, the fractional ownership business is “a two-horse race between Flight Options and NetJets, relegating the other providers to boutique markets.” So says Flight Options CEO Kenn Ricci, characteristically confident in the future of the frax operator he founded in 1998.
Insight into the competitive performances of FlightSafety International and Executive Jet can be found in a candid and personal letter by Berkshire Hathaway CEO Warren Buffett to shareholders in his company. In the midst of the financial data, he singles out the leaders of these two divisions, Al Ueltschi and Richard Santulli.