NetJets Europe: Attention to detail

Earlier
this year one online charter company announced that they had more jets
available to them than NetJets Europe, the largest business jet operator on the
continent.

The
comparison is unfair. NetJets Europe is not a charter operator. Charter
companies claim that for the majority of flights they are much cheaper, and
that customers are entitled to question where their monthly management fees are
going.

But
in the charter market there is no consistency. You get the aircraft, pilots and
crew that are available that day.

NetJets
Europe is different. Its 900 pilots – trained by Berkshire Hathaway owned FlightSafety
International Inc. – only fly for the company. The average captain has flown
for 5,000 hours and only flies in that aircraft type (a big difference to
charter where pilots may frequently switch aircraft).

NetJets
Europe has a fleet of 150 aircraft. Apart from a core fleet owned by the
company itself these aircraft are owned by customers and only available for
them. Outsiders cannot charter any of these aircraft. And the company needs
this flexibility – some 40% of flights are booked the same day.

NetJets
Europe says the main difference between them and the charter companies is
service – a constant and consistent service.

Its operations centre in Lisbon is an exercise in quality control.
 Customer teams are arranged by language
rather than by country to ensure convenience and speed with bookings, and are
available 24 hours a day.

(NetJets
Europe says that cultural stereotypes are reflected in customer behaviour – the
Italians are more likely to be late than German customers and the British
change their itineraries with remarkable frequency)

Every aspect of NetJets Europe’s operations is controlled here,
from maintenance control, flight dispatch and scheduling to ground operations
and catering. Everything is kept in-house including pilot training – pilots
have specialist simulator training for flying into mountainous airports like
Sion, Chambery and Innsbruck.

They
also keep records of passengers here. The cabin crew take notes regarding
customer preferences. If one likes sushi, for example, but does not eat the eel
roll they make sure next time there is an alternative. If a customer has left
their car at an airport in the middle of winter, NetJets staff will make sure their
heater is on when their plane taxies over.

The
customer gets their preferred newspaper each time they fly, with the
supplements they have no interest in taken out. A consumables corporation
entertaining clients will see only its brand on board.

Corporations
are important customers, with the biggest of them flying several hundred hours
per year. Ten corporations account for 10% of NetJets Europe’s profits – one
even uses NetJets as a back-up, to follow their own jets around in case there
is a problem.

“It
is about giving passengers the same experience each time they fly, but catered
for them – which is something charter cannot provide,” says Chris Janaway, Director
of Crew Management.

The last few
years have been tough for NetJets Europe and NetJets Inc., the US sister company.
Together the two companies lost $711 million in 2009 (although much of this is
write-offs it did not include interest paid to NetJets Inc.’s parent Berkshire
Hathaway).

In
2010 NetJets Europe managed to cut Eu100 million ($135 million) from its costs
but it says it did this without having to cut customer service. Chief Operating
Officer Mark Wilson says NetJets Europe was profitable in 2010, and with
“cautious optimism” he expects it to be profitable in 2011. Sales of fractional
shares have been increasing over the last year, and the next fleet renewal is.
It will soon start marketing the  planes
from Bombardier and Embraer.

Wilson
does not see a return to the rapid growth of the last 10 years. He is wary of
those who come into the market trying to make a ‘big splash’ by under-pricing
and don’t last. “We want to be sustainable,” he says.