Below I’ve pulled a few highlights from the interview with Patrick Gallagher, president of sales and marketing for the Warren Buffett owned private aviation provider. It’s definitely worth reading the entire interview, link at the bottom.
The biggest change, in my opinion, has been the buyers’ need to be more careful as it’s become so much harder for the industry outsider to sift through the various options, to understand who they are flying with and what they are getting for their money.
A week doesn’t go by that we aren’t helping a NetJets owner move into whole-aircraft ownership or helping someone sell their plane and move into a NetJets share...For every company or individual that we talk to who wants to sell back their NetJets share to move into whole-aircraft ownership, there is someone who is trying to sell a plane in favor of a share.
According to JETNET, there are about 22,000 jets in operation worldwide, 68% of which are in the US. Of those 15,000 in the US, around 3,300 are on a Part 135 certificate. And there are more than 550 Part 135 operators (in the U.S.), so it’s a highly fragmented market to say the least. An astounding 500 of those operators have fewer than 10 aircraft. I think there are fewer than 10 operators out there with more than 50 aircraft on (a Part 135) certificate.
It boils down to two things at NetJets: safety and service. There is no shortage of people out there competing for wallet share. The vast majority of those are brokers with little skin in the game, in the sense that they don’t own any planes or employ any pilots; they simply work on margin.
We have very strong interest from pilots who want to start and end their careers at NetJets, so our attrition rates are enviably low. We are actively hiring pilots, and this allows us to stay ahead of the pilot shortage that many other operators and airlines are experiencing. We are staffed appropriately to meet the needs of our owners and we continue to hire new pilots every month.
About 22% of our flights (in 2019) were booked via our online portal or app. That’s up about three points from last year. And the breakout there is about 80% desktop portal and 20% mobile app, so it’s clear owners still want to talk to our teams in person despite having online accessibility.
To read the full interview from Corporate Jet Investor, click here.