NetJets Europe focuses on Russia, Africa and Eastern Europe
[nonmember]After six months of net sales, Emily Williams, sales director for NetJets Europe, is relying on Russia, Africa, Eastern Europe and Germany to keep Europe’s biggest operator growing.::join::[/nonmember][ismember]
Whilst changes at NetJets Inc attracted a lot of coverage and criticism over the last few years, things have also been tough for NetJets Europe, the European fractional jet company.
In 2009 William Kelly, NetJets Europe’s CEO was replaced by Eric Connor. Connor moved over from Berkshire Hathaway’s energy business to restructure the company (in a similar move to the appointment of David Sokol as president of all of NetJets replacing founder Rich Santulli). As well as the management changes there were job cuts – although no pilots were made redundant – and several former employees publicly criticised the changes to Europe’s largest operator.
NetJets and Berkshire both stress that customer satisfaction surveys showed that these changes did not affect customers. But the credit crunch forced some customers to give up their shares. Whilst NetJets Europe managed to retain the same number of customers in 2009 many traded down and flight hours fell. Before 2007 the average NetJets Europe individual user flew for about 50 hours a year, this fell to around 25 hours (although corporate users averaged over 200 hours).
Different aircraft were affected in different ways. Emily Williams, director of sales at NetJets Europe, says that NetJets’ large cabin aircraft were most robust for two reasons: “First, less aircraft of that type are available and even if economic circumstances are squeezing you if you are flying long-haul, safety and service are going to be your absolute priority. In Europe the only company that can compete on safety and service for long-haul is NetJets.”
With many smaller aircraft for sale, selling new fractional shares for new small cabin aircraft was particularly hard, but the toughest market was jet cards – where users can buy as few as 25 hours enough for four of five flights – as customers focused on saving money.
But for Williams – who has been at the company for eight years and in her new role for over one year – this is all in the past. The focus is on signing up new fractional customers.
“I am genuinely very excited because I really believe what the new management team has done is right and I believe in the way the company is going,” says Williams. “In 2009 a lot of our time was spent servicing existing customers and making sure they were in the right aircraft with the right number of hours. In the last five months of 2010 we had a net-positive sales number in fractional shares and that has continued in the beginning of this year. We are definitely focusing on acquiring new customers and new hours”
Williams is betting on new customers coming from Russia, Central and Eastern Europe, Africa and Germany next year.
Russia and Eastern Europe
Whilst she says demand is returning in NetJets Europe’s mature business jet markets of France and the UK – where about 60% of new business comes through referrals – in 2011 she is most confident about opportunities for the company in Russia, a country that has always been important to the company.
“Russia is a fascinating market,” says Williams. “We already have a very good customer base in Russia but one of the things we are focusing on now is improving their experience we are doing a lot of work with the airports and infrastructure to make sure we can match the type of service that our other European and US customers get on a daily basis.”
Most of the company’s flights to and from Russia are through Moscow’s Vnukovo Airport, a dedicated business jet airport, but it also regularly uses Moscow Domodedovo and Sheremetyevo and flies a lot of passengers to St Petersburg.
Williams also says that NetJets Europe has a solid customer base in Ukraine and that there are opportunities to grow this.
“For 2011 our focus is firmly on Russia,” says Williams. “In 2012 we see a lot of opportunities in Central and Eastern Europe and the Balkans.”
NetJets Europe’s biggest markets in Central and Eastern Europe are the Czech Republic and Poland but Williams says they see opportunities further east. “This has been a very strong area for us, particularly in the large cabin market, and appears to have been affected less by the financial crisis,” she says.
She says that customers tend to be most interested in larger cabin aircraft, even for short trips such as flights into and out of Germany. NetJets Europe has five salespeople based in the region.
Despite political unrest in Tunisia, Egypt and Libya Williams says they are seeing strong demand in North Africa and have signed up a customer from the region in March. She says NetJets has grown its North African customers in the region by 40% in the last year. Most of the demand is from companies involved in oil or gas and commodities that tend to fly to Europe or the US rather than within the region.
Marrakesh and Casablanca are part of NetJets Europe’ primary operations area and see a lot of flights but the company is also focusing marketing effort on West Africa.
The one mature market where NetJets Europe is certain to grow is Germany. In March 2011 Lufthansa Private Jets agreed a deal where instead of operating its fleet it would use NetJets. Although the exact value has not been announced, Williams says it is for “many hundreds of hours.”
“It is a very mature market – where a lot of companies have flight departments -and one we had not penetrated as much as we had hoped,” says Williams. She says this is partly because they first concentrated on markets like the UK and France businesses (the UK, where she was director of sales – still accounts for over a third of the fractional operator’s business). “However Germany was a market we focused on last year and we had a lot of growth. We sold four times the number of shared in Germany in 2010 compared with 2009,” she says.
NetJets has also signed a deal with Sixt, the car rental company, which will offer limousines and car hire for NetJets customers. “We have had fantastic feedback from customers and there are benefits from working with a really respected and entrepreneurial family company like Sixt,” says Williams.
In all countries Williams says they are also benefiting from more optimism generally. “Second hand values have stabilised. People are feeling more confident in their business and personal lives and are also more confident that values have stabilised. For many it feels like a more calculated risk than 12-18 months ago.”