NetJets Still Aiming at Profitable Operations

 - May 13, 2010, 11:36 AM

Berkshire Hathaway’s most recent quarterly financial report notes that revenues at its NetJets subsidiary grew by 18 percent compared with the first quarter of 2009, generating positive pre-tax earnings of $57 million in the first quarter versus a pre-tax loss of $96 million in the same period last year. The growth in revenues “was primarily attributable to a 7-percent increase in worldwide flight revenue hours,” the report noted, “and higher fuel cost surcharges, partially offset by lower management fees due to fewer aircraft in the NetJets program.” Helping deliver the improved results in the first quarter, Berkshire Hathaway added, was “a decline of about $50 million in aircraft impairment and inventory valuation charges compared to the first quarter of 2009. NetJets continues to own more aircraft than 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 continue to believe that NetJets will operate profitably in the future.” Despite speculation that NetJets is holding a high number of non-flying airplanes, less than 5 percent of the overall fleet is available for sale, AIN was told, “which is in keeping with its historic amounts.”