Bombardier Wins NetJets Contract

Aviation Charter, Fractional, and Private
1

Massive change for NetJets. Wonder if they’ll begin to invest in Bombardier’s shorter-range aircraft.

Anyone familiar with their operations know where they’ll cut the fleet? FlexJet going to lose market share with owners going over to NetJets?

online.wsj.com/article/BT-CO-201 … 09040.html

TORONTO (Dow Jones)–Bombardier Inc. (BBD.B.T) received its largest-ever business-jet order from Warren Buffett’s NetJets Inc., the world’s largest fractional jet operator, in a deal that could be worth more than $6.7 billion.

In early trading, Bombardier Class B shares jumped as much as 9.4%. The stock is now up 45 Canadian cents, or 7.3%, to C$6.59 on more than 2.8 million shares traded.

The firm order, worth $2.8 billion at list prices, is for 50 Global business jets and includes options for another 70 Global aircraft, which if exercised, values the entire order at more than $6.7 billion. The order comprises 30 Global 5000 Vision and Global Express XRS Vision aircraft, with deliveries set to begin in the last quarter of 2012, as well as 20 firm orders for the newly launched Global 7000 and Global 8000 jets to be delivered starting in 2017.

NetJets, owned by Buffett’s Berkshire Hathaway Inc. (BRKA), has a fleet of more than 800 planes but this marks the first time it’s ever ordered jets from Bombardier.

“It is a strong endorsement of Bombardier’s Global family of high-end business jets,” said National Bank Financial analyst Cameron Doerksen.

Montreal-based Bombardier said recently that it booked significantly more aircraft orders in the fiscal year ended Jan. 31, and that demand for business jets was particularly strong in the final quarter of the year, reflecting a gradual recovery in the global economy.

2

At the NBAA last year they also ordered 50 Phenom 300’s with an option for another 75. They also stated they are in the market for something in between the Phenom’s and the Globals!!!

Maybe G250’s???

3

I understand that NetJets is quickly expanding its market share for fractional ownership (if that’s possible), but I think by adding aircraft like Phenom 300’s, they lose that exclusivity that appeals to businesses and individuals who go to them over purchasing their own aircraft or splitting with another individual.

Does anyone know if these Phenom 300’s are going to be part of the main fleet or spun off into a different program? It sounds like NetJets is no longer US-built Aircraft dedicated. If they were smart they’d start offering US-Registered Dassault’s to owners as GIVs age and are phased out.

4

NJA will keep it as part of their main fleet.
They are currently ‘disposing’ other parts of their fleet (ie. old Citation Ultra’s).
These will be replacement aircraft for the US and European operations.

5

Maybe NetJets will take over FlexJet. Mr. Buffett says he’s going shopping.

6

Wouldn’t happen.

FlexJet is wholly-owned by Bombardier. Unlike NetJets, FlexJet is clearly tied to one fleet. Now that NetJets is venturing into the Global Fractional world, they just became competition. FlexJet, however, does not offer ULH aircraft in their fractional fleet.

What I think may come of this, is that if these aircraft are intended to replace G550s, Gulfstream may look into starting their own JV for fractional ownership. The G150 is a very good aircraft that is currently not offered by any fractional ownership program.

7

Famous last words! Just ask the gang over at Raytheon Travel Air.