NetJets Earnings Soar 19% Despite Weaker Revenues

Despite slightly lower aircraft sales, fractional provider NetJets’ pre-tax earnings increased 19 percent last year, “primarily due to lower subcontracting expense and a decline in losses from aircraft impairments and dispositions, partly offset by increases in depreciation and restructuring charges and reduced aircraft sale margins,” parent company Berkshire Hathaway said in its recently released 2016 results. In 2015 such earnings declined $46 million at NetJets as higher personnel, aircraft subcontracting, and maintenance expenses more than offset a surge in aircraft sales margins. “A portion of the increase in personnel costs pertained to lump-sum payments made in connection with a collective-bargaining agreement reached with our pilots in the fourth quarter of 2015,” the company said.

Last year, revenues at NetJets slumped 2 percent year-over-year due to lower aircraft sales. However, it wasn’t that bad of a year for sales, considering the significant gain from 2014 to 2015. Berkshire noted that NetJets’ aircraft sales in 2015 climbed 50 percent by comparison with 2014, so the 2 percent decline indicates that the company retained most of that higher sales level last year.