Pat Gallagher joined NetJets in 2010 after serving as executive vice president and head of sales at Marquis Jet Partners. Before Marquis, he served as vice president of sales for Flight Options and held positions with Jet Aviation and United Airlines. 

1. Demand declined at the start of the pandemic but NetJets ended the year operating at about 85% of your normal flight volume. What is it like now?

A. Fast-forward to this spring. We probably got back to call it, 2019 levels. We were probably back there by about the end of the first quarter. By May, we were 20% over pre-pandemic levels. In June, we were about 33% over 2019 levels. So, people have come out of this with vaccinations in their arms and there is so much pent-up demand right now. 

2. NetJets is dealing with broad increases in travel demand that are taxing the air travel infrastructure. What are you experiencing?

A.  People are going through staffing challenges. But we’re feeling it on all the periphery services. So, FBO staff, catering suppliers that we rely on, ground transportation, suppliers that we rely on–we even utilize the airlines to move our pilots between airports and between airplanes. Commercial schedules are still somewhat reduced, and so all this infrastructure around us that we rely on, it’s really been tasked, due not just to the fact that demand is way up over pre-pandemic levels, but their staffing is still challenged. You are about five times more likely to experience an air traffic control delay today flying than you were a year ago. And it’s far more pronounced in certain areas. You’ve probably read about the amount of the significant uptake in demand and flight activity in and out of Florida, for example. If you’re flying into the Miami area on a weekend right now, you can expect air traffic control delays. We’ve seen changes in patterns as well. People are staying longer. 

3. Are the challenges due to labor shortages or is it more than that?

A. We’ve seen labor shortages throughout the FBO networks, which were resulting in more fuel delays and ground service delays. You combine those staffing shortages with just the sheer amount of volume. And we track every sort of delay, whether it’s air traffic control, fueling or ramp access. And we’ve seen material increases in fuel delays. We’ve seen caterers that we’ve relied on for years and years that have been great partners that have shut down during the pandemic ... If you’re flying out of some small airport, where there might not be a local caterer available, then we’ll actually bring the catering in from somewhere else. 

You’ve seen black car companies that have sold off portions of their fleet during the pandemic. And now with the shortage of autos, they aren’t able to get cars back in. They also have a shortage of drivers right now ... All the rental car companies sold off huge portions of their fleets to raise capital and get themselves through the pandemic. Now that business is back, they can’t find cars fast enough because manufacturers can’t produce them fast enough. There are so many little things around the industry that are affecting all of us. 

4. NetJets’ fleet totals about 760 aircraft. You mentioned that only American Airlines has more aircraft on its operating certificates. What are plans for additional aircraft? 

A. We’re buying. We’ll take delivery of a hundred new airplanes between today and the end of next year to the tune of $2.5 billion, which is something that nobody else in our industry can come anywhere close. So, we’re able to both get those deliveries fast with manufacturers who are also having super high demand right now. And we’re able to get the delivery spots that we want. We have the capital to be able to go out and make those investments. We’re able to hire the pilots and the flight center staff to come fly them ... None of those are replacement aircraft. Those are all additive to the fleet or incremental. 

5. NetJets temporarily paused sales of fractional shares, leases and jet cards for Cessna Citation XLS and Embraer Phenom 300 jets because of unprecedented demand in private travel and putting customers on a waiting list. What is happening?

A. There’s this finite amount of capacity in our industry and we’re certainly feeling it. We don’t want to put our service at risk by overselling what we actually do. And that’s just talking about the amount of airplanes and pilots that we have available to fly. That’s not even talking about the infrastructure challenges that I touched on earlier Yet you see others out there that are just continuing to sell and sell and sell and sell against this finite amount of capacity that’s out there. I think it’s going to make for some interesting reading a few months from now, because there are no signs of demand slowing down.