Patrick Gallagher, who joined NetJets in 2010, serves as president of sales, marketing and service.
About a year ago, NetJets halted taking new customers for your jet card offering. Now, you've resumed sales to new customers through a new offering called NetJets 25-Hour Lease. What was the catalyst behind the new product?
Over a year ago, we halted card sales altogether as we saw demand skyrocketing. We halted card sales for no reason other than to protect service and we will reintroduce card sales at some point in the future when we feel like we can do so without impacting our service models. We introduced the 25-Hour Lease product as an alternative that was made available to existing jet card owners who were on the waitlist. If owners had exhausted their card and wanted to continue flying with NetJets, they didn’t have an alternative at the time until our 25-Hour Lease was offered to them. We’ve now reached a point where we’re offering the 25-Hour Lease to the general public and are now taking new owners for the first time in over a year.
How large did your waitlist grow?
Our waiting list was in the thousands with some being existing clients who were eager to renew a jet card and many of whom have now moved into this 25-Hour Lease since we introduced it. The waitlist is now closed, and we are not adding any additional names.
What steps has NetJets taken to be able to launch the new product and take on new customers again?
What’s really prompting us to open it up to the market is the enormous volume of [aircraft] deliveries and the amount of hiring that we’ve done in recent months that have gotten us to a place where we feel like we can open the business back up. We will add 40 airplanes to the fleet just in the remaining four months of this year, for nearly 80 total new deliveries this year. We will also add over roughly 100 aircraft to the fleet next year along with the pilots and flight attendants to crew those aircraft at a pace that we need to support them. That’s really what is enabling us to turn things back on.
How is business going today?
We have now presold virtually all of our 2023 deliveries, meaning every aircraft in 2022 that we’re delivering this year is already spoken for by fractional customers. We have sold out of every share of deliveries in 2022, and we’ve now sold out the majority of our 2023 deliveries, depending on the aircraft type. In some aircraft types, we’re now selling into 2024 vintages and in others we still have 2023s.
What is your biggest challenge?
I would still say we’re still dealing with a lot of infrastructure challenges today, but they have come a long, long way from where they were last summer. The entire industry was really challenged with everything from fueling delays due to staffing challenges at FBOs or due to supply chain issues impacting parts and our ability to return aircraft to service. Those things have significantly improved from where they were a year ago, but they’re still not back to where we’d like them to be. We’re still seeing things like the duration of repairs that are taking longer than they should because planes are waiting for parts to arrive and we are doing everything we can to build up our parts warehouses and our network of maintenance around the world. It’s still challenged in that regard and with lots of airplanes coming in, we’ve got to ensure that we’re not seeing any degradation of service from what our customers expect. Safety and service, above all else, will always be top of mind for NetJets.
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