On the Record with KEVIN RUSSELL, EXECUTIVE VP, NETJETS,
INC.
NetJets Claims Dramatic Gain In Market
Sometimes the big just keep getting bigger. NetJets, Inc. continues
to flex its muscle in aircraft purchasing and in the provision of
top-notch service, and during tough economic times has seen its
share of the fractional ownership market grow to some 72% or 73%,
on a revenue basis, up from the high 50s a scant 18 months ago.
That's the word from executive vp Kevin Russell, who says like
everyone else that the year's been a tough one, yet insists that
NetJets has the right mix of products, the right service philosophy,
and above all the size to maintain and even extend its lead in fractional
ownership, pre-sold flying time, and conventional charter.
NetJets has so many aircraft on order that when president Richard
Santulli decides he needs fewer of one type and more of another,
he can adjust the order, Russell says. "That's the advantage
of being the largest customer of every one of the manufacturers"
(except Bombardier) he told Show News. "We have the ability
to work with them and fine-tune the delivery."
Winners include the Citation Excel, 59 of which are now in NetJets
operation, out of 100 on order. Conversely, NetJets has taken only
five BBJs (partly because completions were delayed until the economy
declined), as "most people are not doing the broad international
travel they did three, four years ago."
Another winner is the affiliate Marquis program, whereby aircraft
time is pre-sold in 25-hour blocks. "They're approaching 1,000
Marquis cardholders in a little over 18 months," Russell says.
"They've had tremendous success."
"The economy dictates the success of any business,"
and "the economy's starting to turn," he says. "I'm
looking for a good fourth quarter."
--Rich Piellisch
No Discounts? Not Hardly
Raytheon's report of an $895 million reduction in its backlog
behind the cancellation of an order for 50 Hawker Horizon
jets would seem to indicate that NetJets was going to pay
close to the list price of just over $18 million each for
those aircraft.
Not so, says NetJets executive vp Kevin Russell. "We
do receive a discount for buying quantities of 50 or 100,
otherwise we would not do the deal," Russell told Show
News on the eve of NBAA. What the simple division of $895
million by 50 doesn't reveal is the service guarantees NetJets
insists upon.
"We always contract for all the services because we
bring the aircraft back to the manufacturers for all the support."
That support, especially for engines, is more akin to the
calendar schedules maintained by the airlines than those of
private operators, Russell says.
And the price NetJets pays, while superficially close to
list for a single aircraft buy, is for far more than a basic
aircraft. "It's always top interiors and it's always
top avionics." NetJets aircraft, says Russell, are "very
handsomely appointed."
"We're making investments not only for the NetJets owners
but for ourselves."
