In a letter to NetJets owners sent earlier today, its president Patrick Gallagher outlined company plans due to the COVID-19 Coronavirus pandemic. He said business has been “down significantly.”
Gallagher told customers via email, “…This pandemic is affecting our business to a greater extent than any event since we were founded in May 1964.”
Two of the most dramatic moves include an overall workforce reduction of 25% at NetJets Europe and furloughs for a quarter of operational staff at Executive Jet Management.
NetJets crewmembers and corporate office staff have been offered a voluntary unpaid leave of absence.
Experience from the Great Recession has the company better prepared, Gallagher wrote: “Applying what we learned during the financial crisis of 2008, we have spent the past several years paying off our debt and reinvesting in our business. Our stated goal was to build a business for all economic conditions so that we can serve our Owners.”
NetJets posted a $711 million loss in 2009.
He said, “NetJets did not apply for bailout funds and aside from the very difficult decisions made in our NJE and EJM subsidiaries, there have been no other furloughs required.”
NetJets is pulling back on deliveries of new aircraft. After adding an average of 60 private jets per year, this year the world’s largest private jet operator will take about 25 aircraft.
NetJets has been adding the new jets from Bombardier, Embraer, and Textron. No mention was made of its order for the Global 7500, which isn’t scheduled to enter the fleet until 2021. It is a large operator of the Phenom 300 and Challenger 350 among others.
Flight services for customers of all groups will continue with heightened sanitary precautions “taken at great expense” in light of COVID-19. Among other things, NetJets is using its fleet to position crew to their aircraft.
Noting the “distressing toll” of the pandemic, Gallagher added, “Known brands with seemingly strong financial backing have already ceased operations. It is logical to assume that others are holding on while
they await the approval of loans and grants available to them through the CARES Act.”
Last week JetSuite suspended operations. It has yet to tell its approximately 1,000 SuiteKey jet card members the fate of their deposits. It’s estimated more than $50 million of flight credits are at stake. JetSuite backers include Qatar Airways and JetBlue.
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