Less than two months after inking a new labor agreement with its pilots, following a year of contentious negotiations, NetJets filed a lawsuit against the union that represents its co*ckpit crews on Monday.
News of the lawsuit came to light yesterday when the union, the NetJets Association of Shared Aircraft Pilots, issued a press release responding to the filing.
The lawsuit alleges that NJASAP defamed the private flight provider during the negotiations and that the detrimental actions continue.
The Berkshire Hathaway unit alleges that NJASAP knowingly published false information about pilot training, maintenance, and safety culture at the world's largest private jet operator.
It lists more than a half dozen examples, including ads in The Wall Street Journal.
One ad came after a widely publicized incident where a door plug fell off a Boeing jetliner operated by Alaska Airlines inflight.
The headline read, "NetJets Owners. What if you looked out your window and saw a panel of the plane?"
In its lawsuit, the company says the missive was "clearly intended to alarm NetJets' customers, pilots, and the traveling public is false and defamatory. NJASAP has no basis to suggest that an accident similar to the one that occurred on the Alaska Airlines flight is likely or possible to occur on a NetJets flight."
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The filing also alleges the union participated in and praised the company's hiring and training processes for new pilots and, in fact, worked collaboratively with the company to recruit new hires until late 2022, around the time the mid-contract negotiations were beginning.
"Despite its own prior involvement in and praise for NetJets' hiring and safety processes, within the past year, NJASAP has engaged in a public campaign designed to falsely smear and defame NetJets' business and reputation by attacking the experience and knowledge of its pilot force and the adequacy of its training programs," the company said in its lawsuit.
It continues, "(NJASAP) has done so for the transparent purpose of damaging NetJets' reputation with the public, its customer base, and its employees."
For its part, union leadership seemingly doubled down on its allegations.
"NJASAP stands by the concerns we have raised about pilot training and the safety and maintenance cultures – concerns that have only increased in intensity in recent months," NJASAP President Capt. Pedro Leroux said in the press release.
He continued, "We view the lawsuit as an attempt to silence us. However, NJASAP has a federally protected right and an organizational and moral responsibility to our members—the NetJets pilots—and to our customers to raise safety issues, and we will continue to do just that."
Continued Acrimony
Late last month, NJASAP claimed via a press release the company had "continued the assault on its unionized pilot group by subjecting a crewmember who participated in a late-November 2023 informational picket – as was their lawful, federally protected right to do – to coercive interrogation."
The union claimed, "During an hour-long meeting…the pilot was badgered with the same questions asked repeatedly and in multiple ways about protected Union activity. This occurred even after the pilot was falsely reassured at the meeting's outset that the issue and line of inquiry was not about picketing activity."
Hours before revealing the lawsuit, NJASAP said it joined Teamsters 284 to restart the NetJets Unions Coalition.
"While the issues may differ today in comparison to 10 years ago, reestablishing (NUC) emphasizes the importance of solidarity across our labor groups – speaking with one voice as we attempt to re-engage NetJets in a dialogue about several pressing matters, including increases in discipline, operational and safety-related issues and a decrease in constructive communication with management," Leroux said.
The Teamsters represent dispatchers, flight attendants, maintenance controllers, mechanics, and stock clerks.
In April, over 78% of the rank-and-file pilots approved a new agreement to increase compensation by 52.5% over five years.
The new deal for NetJets pilots followed pay hikes in the 40% range by Delta Air Lines, American Airlines, United Airlines, and Southwest Airlines for their pilots.
What’s next for NetJets?
In addition to being about three times larger than its nearest competitor, Flexjet, NetJets has long held itself out as the industry's gold standard, often garnering a premium, in some cases significant.
For example, for a fractional customer who can't gain tax benefits from their ownership share, the fully loaded cost for a five-hour flight on a Citation Longitude between Washington D.C. and Scottsdale, would run around $65,000, including the acquisition cost of a 50-hour per-year share, monthly management fee, hourly flight, and fuel surcharges, plus considering long-flight discounts.
While NetJets allows customers to book and cancel those flights with as little as 10 hours' notice, by booking 120 hours in advance, Delta Air Lines' backed Wheels Up, which last year flirted with bankruptcy, would cost a member who pays $8,500 to join and deposits $200,000 in funds about $40,000 for the same flight, per fractional and jet card buyers guide Private Jet Card Comparisons.
Despite the cost differences, during the surge of private jet demand in 2021 and 2022, NetJets built up a backlog of customers who, in many cases, were willing to wait more than a year for their airplanes to arrive.
Over the past year, NetJets has signed options to buy up to 2,000 private jets from Textron Aviation, Bombardier and Embraer.
During a recent meeting of private aircraft dealers, Ron Draper, CEO of Textron Aviation, which could sell as many as 1,500 of its jets to NetJets, told the dealers, "When they're selling, we're selling."
NetJets has not indicated the impact of the continuing battle with NJASAP on sales or customer retention.
In January, during the height of negotiations, in a letter to NJASAP, NetJets alleged the union was engaged in a coordinated program of self-help, delaying flights by increasing maintenance write-ups and fatigue calls compared to historical data. The union denied the claims, which were documented in a 11-page analysis.
NJASAP Vice President Capt. Paulette Gilbert responded at the time, “The company’s threats about the frequency of pilots reporting maintenance issues on the aircraft they fly represents a grave threat to the safety culture at NetJets – the very safety culture that aircraft owners, passengers, and flight crewmembers depend upon for their lives every day.”
While competitors will undoubtedly welcome the continued discord at the market leader, NetJets agreements for new jets are options instead of firm orders. That means the impact could flow to the OEMs if the conflict with NJASAP results in lower sales.
A spokesperson for NetJets said, “We will not comment on legal matters between NetJets and NJASAP, as our focus is on providing the exceptional safety and service our owners expect and deserve.”
