Are Biz-jets operators profitable?

[whitespiral]

I was just wondering so many business jet operators seem to stay in business when the economics doesn't seem to make sense? I know Netjets has yet to post a profit in ten years, but I wander what the smaller operators are doing.

What are the 1-2 charter aircraft operators doing? What are the higher profile companies like LEA doing? I've heard of people netting 20% EBIT year after year, with a very classic business model (2-3 LJs) but find it hard to believe.

Anyway, was just wondering what the overall perception is about profits in business aviation...

Cheers,

WS

[fortuna76]

When you say Netjets is not making money, I believe you mean Netjets Europe. Because in the US business is great! Not making money here in Europe yet is not worrying anybody at all. The business model is based on investment and expension rather then profit. So the US keeps pumping money into Netjets Europe to make it bigger and better, before they want a return on there money. So far we are outperforming the expected business profile, so we are well on track. Remember, it takes money to make money.

By the way, we broke even in 2006 :8

[whitespiral]

Hi Fortuna,

According to this, US also loses money:

http://www.ainonline.com/Publications/nbaa/NBAA_06/d3_Netjets1.htm

What makes profits from any sort of charter/jet card/fractional operation seem dubious to me is the fact that there are many players in the industry with an interest in jus breaking even. (Such as manufacturers or other companies with different interests and stakes in this end of the supply chain like Flexjet, Execujet etc.)

[trainer too 2]

Nobody earns money in this business long term.... Too many people go in there from an emotional perspective: they have a nioce house, expensive car and hey: lets buy a plane!

So talking about EBIT is not possible asd it is mosatly ad-hoc business, one year you fly 400 hours @ high rates, the next 150 @ crap rates. One year you have no technicals, the next engines blowing up left right and center. One year there are plenty of pilots @ euro 50 per hour the next no pilots as the market is heating up.

In short, life as a 2 to 3 aircraft operator is too volatile unless you have work contracted for these aircraft long term.