“A few years ago NetJets was my number-one worry–its costs were far out of line with revenues, and cash was hemorrhaging,” Warren Buffett, chairman of NetJets and FlightSafety International parent company Berkshire Hathaway, wrote in his latest annual letter to shareholders, released on Saturday. “These problems are now behind us,” with NetJets delivering $227 million in pre-tax earnings last year, up $20 million from 2010.
Charter and Fractional » Fractional
News and issues concerning the fractional-ownership industry and markets, including company announcements, regulations, new developments and labor issues.
Flight Options, the second-largest fractional jet provider in the U.S., said 2011 was one of its best years and expects the momentum to continue to build this year. In fact, the Cleveland-based company reported a healthy jump in new fractional owners last year versus 2010.
“One of the statistics from 2011 of which we are most proud is that more than one-third of all new owners came from referrals–a strong and appreciated endorsement from our current owners,” noted Flight Options CEO Michael Silvestro.
NetJets Europe launched the first direct financing product for the fractional industry in Europe, providing new clients with an alternative financing method with rates comparable to those offered by major financial institutions.
CitationAir has stopped selling fractional shares in new aircraft and ceased renewals for current fractional-share customers, the Cessna Aircraft subsidiary confirmed to AIN yesterday. Effective last week, “CitationAir will be streamlining our offerings to deliver those products in our portfolio that have demonstrated the greatest customer demand,” CitationAir president and CEO William Schultz wrote in an email sent to employees.
Fractional share operator AirSprint Private Aviation has quietly but steadily been building its business in Canada for the past 12 years, and since last June it has been expanding into the Southwest U.S. Calgary-based AirSprint’s Canadian fleet consists of eight Cessna Citation XLSs and 13 Pilatus PC-12s. AirSprint has three PC-12s based in the U.S., at its Scottsdale, Ariz., office, and the company is planning to expand the U.S. fleet as word spreads that there is an alternative to jets or twin turboprops in the Southwest U.S.
Fractional provider Flight Options donated 10 hours of fractional jet flight time to Corporate Angel Network, which arranges free flights to treatment for cancer patients using the empty seats on corporate jets. This contribution expands the relationship between Corporate Angel Network and Flight Options, which has donated flight time to the organization since 2001. “Corporate Angel Network provides a unique and extremely valuable service to those afflicted with cancer, and we are proud to be able to support this life-giving organization,” said Flight Options chairman Kenn Ricci.
Lufthansa announced yesterday it will introduce its Lufthansa Private Jet service to the North American market on February 1 through an expanded relationship with fractional provider NetJets. The new service will build on the existing Lufthansa Private Jet service in Europe, which is done in conjunction with NetJets Europe.
Four of NetJets’ subsidiaries–NetJets Aviation, NetJets International, NetJets Large Aircraft and Executive Jet Management (EJM)–are suing the U.S. government over a $642.7 million IRS tax bill for past federal excise taxes (aka “ticket tax”) and assessed penalties and interest.
Third-quarter pre-tax earnings at Berkshire Hathaway’s “other services” division, which includes FlightSafety International and NetJets, climbed 15 percent, to $281 million, from a year ago thanks to stronger demand for pilot training at FlightSafety and higher revenues at fractional provider NetJets.
Flexjet submitted initial paperwork to the FAA this week seeking approval for the fractional provider’s pilots to use the iPad 2 for viewing navigational charts, aircraft publications and other flight-related documents during flight operations.