Patience is a virtue, believes NetJets Europe supremo Mark Booth. Four and a half years after the launch of the NetJets fractional model this side of the Atlantic, the business is still to turn a profit.
But Booth is bullish and with strong sales growth in the past year he says the European operation is on course to be profitable in the fourth quarter of 2004.
"Sales this year will be 100% up on last year. By the end of 2003 we expect to have 350 customers in Europe," he says. Our only major competitor Flexjet has retreated. We've extended the map and clearly defined ourselves as market leader.
"What's great is we're talking to new customers. People we hadn't spoken to before this year." He cites Russia as an example and region with exciting short-term potential. "Before last September I hadn't been to Russia. We now have seven customers."
Growth
The corporate market has been the biggest growth area he says. An unnamed German client has just signed for 550 hours per annum. The deal involves GulfstreamV, Falcon 200 and Excel aircraft.
Reasons for this strong growth include ongoing concerns over safety, and these have been compounded by fears over SARS. The combined effect of the virus and the recent war in the Middle East resulted in a massive 27% increase in bookings during the first two weeks of April this year, Booth says.
The end of Concorde services, imminently from Britain and already from France is another factor stimulating fractional sales, he says. To meet the transatlantic demand NetJets Europe is offering a GV at 24-hour notice. "We're shaving three hours off the flight time of commercial operators. The customer who's interested in that is time sensitive. Their decision is not driven by cost."
At the other end of the market he also sees opportunities in the value-driven sphere of government special missions. "Government shareholders are the public. They demand value for every dollar. There are other aspects of the NetJets service that also appeal to the public-sector customer. These are around discretion and confidentiality: things that are already part of the deal."
Response to a tender to the Irish government has according to Booth been "enthusiastic" and he says he's in talks with other European governments.
With corporate profits in the doldrums the public purse offers an attractive alternate source of income.
Source: Flight Daily News
