Fractional ownership giant NetJets Europe (stand 7085) has cut by around 60% its planned business jet deliveries for 2009 as the economic meltdown tightens its grip on the business aviation market.
"We will take delivery of only 10 aircraft this year, including Hawker 750s, Dassault Falcon 2000EX/LXs and a 7X, as the market conditions are very tough for us at the moment," said NetJets Europe chief operating officer Graeme Weston at EBACE. "We have not cancelled any orders to date, just deferred them," he added.
NetJets Europe added 30 aircraft to its fleet in 2008 and was planning to receive up to 27 types this year, which would have taken its fleet tally to nearly 200 business jets.
"Flight volumes have also decreased, but we are still growing -albeit at a much slower rate than in recent years. For example, we added 270 customers in 2008 across both the fractional and card programmes, but we lost 268 for a whole manner of reasons," he says.
Despite the gloomy economic conditions, Weston is confident the market will begin to grow again "and we have to be prepared for the turnaround by working harder and smarter", he said.
NetJets has begunan aggressive sales and marketing campaign to attract new buyers to the fold. "We are boosting our sales force by 40% with particular focus on the UK, Germany, France, Switzerland, Russiaand other eastern European countries, including Poland and the Czech Republic," Weston said.
He admits it has become increasingly difficult to gain access to new customers and blames in part the negative publicity that business aviation has received from the popular press and politicians alike.
"There are still tremendous opportunities out there, particularly from corporations and individuals who need the convenience and flexibility of business aircraft but do not want to be seen to own their own aircraft in this current environment," Weston says.
There are encouraging signs in Russia, Weston said,where NetJets is installing two additional salespeople. "A few years ago it was difficult to penetrate this market as Russians wanted to own their own aircraft. Today, with the economic crisis hitting so many people, there has been a change in attitude and we are now the largest operator at Vnukovo airport in Moscow," Weston said,
The global recession has also hit the values of used aircraft, which Weston argues is persuading people to renew their fractional contracts or risk losing substantial sums on the sale of their business jets.
"This is also providing a good business opportunity for people wanting to buy pre-owned fractional shares as the cost has dropped considerably. We can't control the economy or the market values of business jets, but we can control our teams and we will work harder than ever before to stimulate the market," said Weston.
Meanwhile, NetJets has become the first business jet company to operate the long-range Falcon 7X from London City airport, having been given the green light from the UK Civil Aviation Authority. The company has 33 7Xs on order and has taken delivery of two. A third type will be handed over by the end of the year.