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Article on problems at Netjets. The pilots' union is signaling problems ahead.

"Talented aviators will not stay at NetJets where they will make 60% of what their peers will earn elsewhere across a 30-year career," Leroux explained. "Pilot compensation at NetJets not only trails that of the legacy carriers, but also low-cost carriers like JetBlue, ultra low-cost carriers like Spirit and regional airlines such as SkyWest." The Union president added the NetJets pilot contract continues to lose ground in wages, benefits and working conditions as regional and mainline carriers ratify amended contracts or exercise wage snap-up provisions.

"Watching NetJets ' once a career destination for professional aviators ' transition into the industry's steppingstone is disheartening. Long-tenured aviators are moving on, and more and more new aviators are coming to NetJets to build time, rather than a career," Gilbert remarked, explaining that, year to date, 62% of pilots who have separated from NetJets have been in their first three years of employment.

The pilots are demanding the CEO step down.

https://finance.yahoo.com/news/status-carrier-step...

I know Netjets isn't a big part of BRK anymore, but it has always been a well-managed company, so a decline would be worth noting. Anyone have insight into this issue?

abromber

I know Netjets isn't a big part of BRK anymore, but it has always been a well-managed company, so a decline would be worth noting. Anyone have insight into this issue?

I wouldn't call it much of an insight, but the core of it is who has the power. A pilot can live without a given carrier like Netjets, as they can work somewhere else. But a carrier can't function without pilots. Consequently, a carrier usually has to pay the pilots pretty much whatever they ask for. They will keep asking for more till the carrier stops making decent profits. Why leave money on the table if it's yours for the asking?

The article seems insightful, but the subtext seems to be that Netjets pilots are underpaid. One should not dismiss out of hand the reverse possibility that pilots elsewhere are overpaid. Perhaps Netjets has just drawn the line at what they're willing to pay while other carriers are giving in? If that's what has happened, maybe Netjets shouldn't try to draw that line, or maybe they're smart trying to hold it there--beats me.

The air travel business is extremely profitable. The secret is to find the place in the value chain that's making the money. It's almost never the branded airline, but the other links in the chain.

If an intercity bus driver naps for 15 seconds, people die. A pilot? Probably not : )
More than a bit tongue in cheek, but keep that heretical thought in mind when considering the ratio of their salaries and the true reasons for that ratio.
(I know a few pilots who will probably never speak to me again!)

Jim

The aviation pilot industry is cyclical with long time constants. For a long time there were more pilots than jobs, so you'd do anything you could to build hours so you could get your ATP rating. The regionals and feeder lines were one way to do it, but pay was bad. And pay rates industry wide weren't that good, unlike the 1960s. So people didn't go into becoming a pilot and the military wasn't training as many pilots as it used to.

Then the demand for aviation grew until it was bigger than the number of pilots and suddenly the low wages/poor benefits thing started going away as the carriers put effort into retaining pilots. And Netjets looks like it hasn't kept up, so somebody can fly for Netjets, get more hours and then move on to someplace that pays better.

(And now that being a pilot is cool again, there will be a boom in the number of pilots, which will lead to a bust in the pay rates, but that is years off.)

In January 2021, NetJet pilots ratified revised agreements extending the current agreement through the end of 2026. It brought NetJets pilots generally up to parity with the major airline pilots (oversimplification as seniority, type ratings, currency and hours in various aircraft along with other criteria determine individual pay for each pilot). Then the majors signed new agreements with their pilots recently with pay increases of as much as 40%, making the NetJets agreement look not as pretty as it did when agreed to in 2021. So now the NetJets union wants to change the current contract (that expires in 2026) to catch up to the new contracts of the majors. I am guessing that NetJets is wanting to hold the pilots to what they agreed to. The cyclical supply and demand for pilots is a big factor that complicates sensible negotiations. Warren probably should have called that 800 number that talks him out of making aviation investments when Santulli offered to sell NetJets (Exec Jets) to him years ago.

FYI- From my nephew who is a pilot in Pacific NW region. His perspective is not surprising:

'NetJets needs to get with the times and make it as enticing to work there as major airlines or else they'll be a revolving door for pilots, much like regional airlines. It's disheartening that management isn't coming to the table to bargain. '

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