NetJets Pilots Approve New Contract Agreement

13.04.2024 - 17:23 / forbes.com / Airlines

After more than a year of increasingly contentious negotiations, pilots at the world's largest private jet operator have overwhelmingly approved a revised contract.

Members of the NetJets Association of Shared Aircraft Pilots voted 78.31% to 21.69% to ratify the agreement.

The results were reported in an internal memo from NJASAP to members last night and first reported by Private Jet Card Comparisons.

In total, 2,390 pilots voted in favor of the deal versus 662 against it.

Overall, 98% of eligible union members participated, a record.

The deal gives pilots a 52.5% increase in compensation through 2029, when the contract expires.

NJASAP had told members the deal would give them a net increase in compensation of $1.6 billion, an average of $400,000 per pilot, during the agreement's term, which runs through 2029, when the previous contract was due to expire.

The union said it had rebuffed management attempts to strike a longer deal.

NJASAP had said that without a raise, pilots would leave for better-paying jobs at the major airlines. They were seeking wage parity with those pilots.

Management had countered that was not having issues with attrition or hiring new pilots. In January, it implemented an age 70 retirement age.

In the end, the pilots settled for closing the gap.

"When the last base pay increase is added to pilot pay on May 1, 2029, the pay gap between NetJets and major airlines will be reduced from the current 60% to 4.6% for large-cabin captains and 17.6% for small-cabin captains," the union had told members before the vote.

Pilot wage tables showed base wages ranging from $86,000 to over $400,000.

The deal comes as NetJets plans to ramp up deliveries of new aircraft.

It has signed letters of intent with Embraer and Textron Aviation for massive orders of new private jets.

Its deal with the Brazilian OEM calls for buying up to 250 of its midsize Praetor 500s.

The agreement with Textron's Cessna Aircraft unit could see the Berkshire Hathaway subsidiary buy up to 1,500 business jets.

Under the NetJets model, it resells the airplanes to fractional owners who buy shares starting at 1/16th of a specific aircraft.

That gives them up to 50 flight hours per year, and contracts that run for five years.

At the end of the contract, NetJets buys back their share at current market rates.

Owners also pay a monthly management fee.

Frequent flyers often buy quarter and half shares, and corporate flight departments needing supplemental lift will purchase shares in multiple aircraft types.

The fractional owners are guaranteed flights at contracted rates with as little as six hours' notice on their aircraft type. They are also guaranteed downgrades to other types in the fleet when they wish, while upgrades are