NetJets Europe aircraft
NetJets Europe's fractional ownership services have seen a significant decline in demand due to the Covid-19 pandemic. [Photo: David McIntosh for AIN]

NetJets Cuts Staff, Planned Aircraft Deliveries For 2020

Workforce reductions impact only employees at the company’s European and Executive Jet Management subsidiaries.

NetJets has confirmed reports of 25 percent workforce reductions at its NetJets Europe (NJE) and Executive Jet Management (EJM) subsidiaries. The private aviation group also has reduced planned new aircraft deliveries for 2020, and these are expected to be down from around 60 to 25.

Portugal-based NJE provides fractional-ownership programs, while Cincinnati-based EJM is engaged in aircraft management and charter services. The group has not yet implemented furloughs or workforce reductions in any other U.S.-based operations, including fractional arm NetJets Aviation (NJA). In a written statement, the company said that the cuts at NJE and EJM were made last week “to align with the current market and ensure sustainability for the future success of those businesses.”

In a letter obtained by BJT sister publication Aviation International News and sent to aircraft shareowners recently by NetJets chairman and CEO Adam Johnson, the company reported that, due to the COVID-19 pandemic, demand for trips had been “down significantly since mid-March.” While adding that the group is still conducting “hundreds of flights” each week, he said EJM has seen a dip in demand for its aircraft to provide subcontract support for the NJA fleet during busy periods.

In addition to the job cuts, NetJets has offered unpaid leave with paid healthcare to both flight crew and corporate office staff. The company said it has not applied for loans and grants available under the U.S. CARES Act. Along with other operators, it has benefited from the act’s relief from the 7.5 percent air transportation federal excise tax, and it said it has passed this saving on to its customers.

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NetJets told owners that it has restructured, deferred, or canceled planned new jet deliveries for this year. It did not specify which aircraft types will be affected by changes to its existing orders with several leading manufacturers, including Textron Aviation, Embraer Executive Jets, and Bombardier Business Aircraft.

“Daily, we see the distressing toll this is taking on private aviation,” Johnson said in his letter to shareowners. “Known brands with seemingly strong financial backing have already ceased operations. It is logical to assume that others are holding on while they await the approval of loans and grants available to them under the CARES Act.”

None of the other major private flight providers, including the VistaGlobal group, Flexjet, and Wheels Up have yet announced staff cuts or fleet groundings. On April 16, charter operator JetSuite grounded its 12-strong fleet of Embraer Phenom light jets and furloughed its staff; it subsequently filed for bankruptcy.

NetJets has taken multiple steps to reduce the risk of COVID-19 infection to passengers and crew. These include treating cabin interiors with an antimicrobial product called ClearCabin and using its aircraft to move flight crew to departure points to avoid exposure by using airline service.

According to the most recent Global Market Tracker published by data analyst WingX, fractional-ownership aircraft operations have shown slightly steeper traffic decline than aircraft management and branded charter services in recent weeks. The company also noted that business aviation traffic volumes in the U.S. have been higher than those in Europe.