Buffett Briefs Berkshire Shareholders on NetJets

Business Jet Traveler » April 2008
Tuesday, April 1, 2008 - 5:00am

In his annual letter to Berkshire Hathaway shareholders, investment mogul Warren Buffett said the company's flight-services division-which includes fractional provider NetJets and aviation training company FlightSafety International-set a record last year with pre-tax earnings increasing 49 percent to $547 million. "Corporate aviation had an extraordinary year worldwide, and both of our companies-as runaway leaders in their fields-fully participated," he wrote. NetJets, which Buffett regards as the "unchallenged leader" in the fractional industry, currently operates 487 jets in the U.S. and 135 in Europe. Though NetJets Europe ran cumulative losses of $212 million in its first 10 years of operation, it now has "real momentum," he said, with earnings tripling there last year. The U.S. operation is also doing well financially, he wrote. At FlightSafety, revenues climbed 14 percent and pre-tax earnings soared 20 percent.

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“When you get into the larger aircraft it becomes like a hotel, with dozens of staff supporting the plane based in a galley area down below. You have very comprehensive cooking facilities, and on larger aircraft we have looked at theatres, with spiral staircases and a Steinway grand piano. The limitations for what you can put inside a plane are pretty much the limits of physics, and even money cannot always overcome that. Even so, people are still always trying to push [the limits]. ”

-Howard Guy of Design Q, a UK-based consultancy