NetJets Wings Its Way to Profitability in 3Q

AINalerts » November 9, 2010
November 9, 2010, 11:06 AM

Berkshire Hathaway on Friday reported that revenues at its NetJets fractional aircraft subsidiary climbed 17 percent during the first nine months of 2010 versus a year ago “due to an increase in worldwide flight revenue hours and increased fuel cost recoveries, partially offset by lower management fees due to fewer aircraft in the NetJets program.” According to the third-quarter financial report, NetJets logged pre-tax earnings of $158 million in the first nine months, compared with a pre-tax loss of $531 million a year ago, which included asset writedowns and downsizing costs of $436 million, $181 million of which took place in the third quarter last year. During the same period this year, these costs “were relatively minor,” according to Berkshire Hathaway. “The improvement in earnings was due to the increase in revenues and to an overall reduction in flight operations and administrative costs, partially offset by higher fuel costs. NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose of selected aircraft over time. NetJets’ operating cost structure has been reduced to better match customer demand, and we believe that NetJets will continue to operate profitably in the future.”

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