NetJets Suffers Loss in 2009, Sees Profitable 2010
NetJets lost $711 million last year and is so debt-laden that without parent-company Berkshire Hathaway’s guarantee of this debt, “NetJets would have been out of business,” Berkshire Hathaway chairman Warren Buffett said in his annual letter to shareholders on Saturday. In 2008, the fractional aircraft provider recorded $213 million in pre-tax earnings. Revenues at NetJets dropped last year by $1.465 billion–or 32 percent–versus 2008 due to a 77-percent fall in aircraft sales and lower flight operations revenues “primarily due to a 19-percent decline in flight revenue hours.” According to Buffet, “NetJets owns more airplanes than is required for its present level of operations and plans to dispose of selected aircraft over time.” However, he added that, at this point, further downsizing will not be required. But there are signs of hope. Under new chairman and CEO David Sokol, NetJets has reduced its debt from $1.9 billion to $1.4 billion last year and Buffett said that “as a result of actions taken to date…NetJets is likely to operate at a profit in 2010.” In the 11 years that Berkshire has owned it, NetJets has recorded an aggregate pre-tax loss of $157 million.