February 29, 2024
The contract between NetJets and NJASAP provides a 52.5% increase in compensation and ends an acrimonious year of negotiations.
After a contentious year of negotiations and threats, pilots at NetJets have approved a revised contract by an overwhelming margin.
On Feb. 9, Private Jet Card Comparisons was the first to report a tentative agreement.
The results were announced via a memo from the Executive Board of the NetJets Association of Shared Airline Pilots, or NJASAP, the union representing the cockpit crews of the world’s largest private jet flight provider.
In North America, NetJets, Inc. clocked nearly three times as many flight hours as second-place Flexjet last year.
Its 11,038 gain in flight hours in 2023 was the second-biggest gain behind Flexjet.
Two-thirds of the largest operators saw decreases in 2023 flight hours.
According to the note to members last night, the IBI24 Tentative Agreement was voted on by 98% of eligible members.
NJASAP called it “a record-breaking participation.”
Pilots voted overwhelmingly in favor of ratification by a 78.31% to 21.69% margin.
In total, 2,390 pilots voted in favor of the deal versus 662 who voted to reject it.
The note was signed by the NJASAP Executive Board and Election Committee, NJASAP President Pedro Leroux, and Committee Chairwoman Amber Hoekstra.
According to the note, “The NJASAP Executive Board extends its sincere gratitude to the pilot group for participating in this initiative as well as to the Election Committee members and union staff who have worked tirelessly throughout the past several weeks to facilitate a seamless referendum process.”
The agreement provides pilots a 52.5% increase in compensation over the next five years.
Our February Chat GPT analysis of sentiment from over 100 comments by pilots on social media before the vote found, “Based on these points, it’s difficult to determine definitively whether the pilots will vote yes or no on the contract offer.”
The AI app said, “It appears to be a contentious issue with differing viewpoints among the pilot group. Ultimately, the outcome of the vote will depend on how the majority of pilots weigh these factors and whether they believe the contract offer meets their needs and expectations.”
At the same time, one pilot commenting on the negativity predicted it would be hard to find fellow aviators to say they voted in favor of the agreement. However, he expertly forecast 70% voting yes.
A summary of the agreement by NJASAP before the vote claimed the deal would bring pilots much closer to what they could earn at the major airlines.
A review of pilot wage tables shows base wages ranging from $86,000 to over $400,000.
The message to members claimed, “When the last base pay increase is added to pilot pay on May 1, 2029, the pay gap between NetJets and major airlines will be reduced from the current 60% to 4.6% for large-cabin captains and 17.6% for small-cabin captains.”
It went on to say, “Class 5 base pay is forecast to exceed average mainline pay by 2028.”
Overall, the agreement “secures a net increase in total pilot compensation of more than $1.6 billion. Stated another way, the TA will result in an average per pilot increase of more than $400,000 in net new compensation in comparison (to the current agreement).”
NJASAP said, “The proposed base wages will increase pilot pay by 52% across the term of the agreement. For reference, according to the proposed base wages tables, a 10-year PIC who holds the 7&7 Schedule will earn an additional $37,604 per year or $3,134 per month after the first increase of 23%.”
Other benefits include a longer duration for medical leaves of absence and accrual of seniority while on leave.
Long-term disability pay also goes up, as would a 401k match.
NJASAP leadership also gave itself a pat on the back.
“When negotiations began in early February 2023, management envisioned a $50 million bump to base wages. One year later, we had secured a net improvement of $129 million to pilot rates.”
The union also said it rebuffed management’s goal of getting a 10-year agreement.
The new agreement becomes amendable in May 2030, and the union can give notice of its intent to amend the deal in May 2029.
The deal comes after a year of increasing rhetoric by NJASAP.
In addition to picketing major sporting events, the union held a picket outside the Berkshire Hathaway annual meeting.
Inside, Chairman Warren Buffett and the late Charlie Munger both took time to praise NetJets’ performance, specifically citing Chairman and CEO Adam Johnson.
Buffett told the audience, “(NetJets is) in a class by itself. It’s done what Ferrari has done in a different sort of way in cars.”
In November the union declined to bring the offer that was approved to its members for a vote.
They claimed it had not been presented as a formal offer.
From there, things took a nasty diversion.
Instead, they launched an ad campaign targeting Buffett in The Wall Street Journal.
The first ad placement broke the week of Munger’s funeral.
From there, they ran ads questioning safety.
Shortly after the Alaska Airlines incident, NJASAP placed an ad that read, “NetJets Owners: What if you looked out your window and saw a panel of the plane?”
It came after NetJets had alleged self-help as a negotiating tactic.
In a letter to the union, NetJets lawyers wrote, “The pilots’ behavior in this regard has been none-too-subtly encouraged in a series of NJASAP communications to its members. NetJets is aware of as many as a dozen messages that suggest—using the typical union code words for self-help—that pilots should take action to reflect their unhappiness with the state of voluntary negotiations.”
According to NetJets, the pilots’ actions had increased off-fleet flights, boosting expenses to fulfill guarantees for fractional owners, lease, and jet card customers.
After publication, on April 16th, NJASAP and NetJets issued the following joint statement:
We are pleased to share that our pilots recently voted to ratify a Tentative Agreement, amending the current Collective Bargaining Agreement (CBA) between NetJets and NJASAP. This ratification concludes a year of voluntary negotiations, highlighted by a shared commitment to reach a successful outcome. We are grateful for this joint undertaking and look forward to focusing on the exceptional travel experiences our Owners expect and deserve
So, what’s next for NetJets?
Pilots and customers can look forward to an expanding fleet.
NetJets has signed letters of intent to add up to 250 Embraer Praetor 500s and 1,500 private jets from Textron Aviation.
It is also continuing to build its fleet of Bombardier Globals.
Last June, it took delivery of its 60th ultra-long-range private jet.
In December 2022, it was announced as the launch customer of the Global 8000.
So far, NetJets has not jumped into M&A deals.
Instead, it has been investing in more facilities to support its growing fleet.
