It is rare that we look to other outlets to do the talking for industry trends, but in a recent conversation, someone pointed me in the direction of the CARES Act funding that has been thrown into the private aviation arena. Normally, this is just talk around the bar, as each business surely has their own reason for accepting or declining any funds available to them. But this one hit a different note because right around the time this conversation was going, I was forwarded an article about Flexjet, care of the reputable industry resource called Elite Traveler. The email blast, intended to go to ET’s vast database, talks of the steps that Flexjet has taken since the pandemic began. Overall, the points made were great. They took precautions in the interest of safety, they spoke of how they handled pilot rotations, and they spoke generally about their jet program. Again, all great items. But then comes the hypocrisy, and one that the consumer should be wary of.
The article will point you to a piece about how the pandemic has altered the industry, but that Flexjet was okay, and according to Flexjet’s own website, “Thanks, in part, to our strong liquidity position, and long-term disciplined approach to building a healthy balance sheet, Flexjet was uniquely poised to weather the recent economic squall while avoiding layoffs and furloughs along the way.”
Wow.
If only everyone had the same ability to spin facts into such a carefully curated piece of poetry. The “strong liquidity position” surely looks better when roughly $84 MILLION went from Uncle Sam to the company that houses the Flexjet (and Flight Options, and Sentient Jet, and FX Air, and Sojourn Aviation, and Nextant Aerospace, and PrivateFly) brand. The “avoiding layoffs and furloughs” looks better in hindsight, but that wasn’t before asking folks to defer parts of their salaries. The spin here is of rollercoaster proportions. A quick query of the pilot forums will show the requests that were made of the pilot group to defer pay as well.
Flexjet CEO Kenn Ricci even went to great lengths of going on Instagram to commend his charges for their deferral of salaries and that he, and 13 others, nobly deferred their entire salary. Quite the move, if not for the spin cycle being on high.
The backpedaling begins— once the PPP money started to filter in, the payment deferral requests ceased. All was good again in the world. But it begs the question, “if the PPP money makes your payroll whole in large part, why ask your employees to take a pay cut?” There is sure hypocrisy in this somewhere, but that’s not for us to judge.
This industry remains difficult to see through much of the dust at times. At the same time that Flexjet received $84mm in funds, other brands like Netjets, Nicholas Air, PlaneSense, Solairus Aviation, and Jet Aviation saw no need to apply. Do they simply run a better business, one that perhaps “has a healthy balance sheet” or has a “strong liquidity position?”
As the next few months wear on, more details will emerge on the long term viability of most of the industry’s brands. There will be continued fallout, and even more so once the election comes around, but as has been written here in previous posts, weaker brands will continue to find ways to grasp at whatever straws they have.
Buyer beware…
