European fractional ownership giant NetJets has been reported to the UK's competition watchdog, the Office of Fair Trading, for allegedly trying to restrict the development of a secondary market in fractional jet ownership in London. The action has been brought by UK broker Fractional Jet Europe (FJE), whose business model centres on facilitating the buying and selling of part-ownership in private jets.
FJE alleges that NetJets has changed its policy on allowing the resale of business jets by withdrawing the ability to sell unused flying hours together with the ownership. FJE contends this tactic has devalued shares and made it harder for its customers to sell them on the open market. "The consequence of this action is causing direct financial loss to NetJets' owners," said FJE chief executive Chris Moody at the show.
"For example," Moody said, "NetJets refused to allow an owner to sell his shares with the unused flight hours to a third party. As a consequence, the buyer pulled out so he was forced to accept $50,000 less for the share than he was offered on the open market. His overall loss on the share - including depreciation costs - was $460,000."
Responding to the allegation NetJets said: "Our contracts state that transfer of a client's share is subject to our consent, which is important to us for many reasons, among them the need to know our customers, as safety is a paramount principle of our business. Our contracts are clear and have not changed in this regard. We haven't received anything from the Office of Fair Trading and don't discuss individual internal client matters due to confidentiality."