Market Moves

A correction, or a market decline of at least 10%, may be looming. However, unlike the equity markets and financial instruments, this correction could result in benefitting the end users and begin to stabilize pricing.

There are two leading indicators that may be a strong catalyst, and both of them are directly tied to Warren's pride and joy, NetJets:

1) NetJets is taking delivery of 60 aircraft this year. Regardless of any attrition taking place to their existing fleet, that still raises their available hours by tens of thousands. We feel strongly that this was a strategic, proactive decision that was aimed at limiting their off-fleet purchasing to support existing clients. A service provider like NetJets has extremely poor economics on trips that are last minute, or recoveries, for jet card or fractional customers. Due to their contractual obligations, they have very limited options other than paying whatever price the market demands for immediate lift in an airplane that meets their safety standards. 

2) NetJets is also exiting the 25-hour jet card market. Instead, they are replacing it with a five year commitment for a ~3.15% fractional share. This will create a divide in those who manage their travel by a portfolio of solutions, and really cause a decision to be made. Again, this decision likely came after some learnings of COVID and the influx of moderate to low-hour travelers who found the 25 hour card to be a good fit for a consistent experience. Their card program was really a feeder program to the bread and butter of fractional ownership.
These two decisions will no doubt shape the market by reducing the amount of ad-hoc charter that is purchased, at astronomically high rates, from local service providers. We are strategically aligning The PJC with operators who recognize that they may get a short-term win on a big pay day by a larger service provider for flights. However, the long-term gain comes from a collective customer group who can create sustainable business and relationships. The PJC is positioned extremely well to continue to gain access to the top aircraft in the nation and find the value for their clients as this market shift takes place.