First half 2010 better for NetJets
Berkshire Hathaway said that NetJet’s revenues increased 17% for the first half of 2010 compared with the same period in 2009.
NetJets operated more flights in 2010, although management fees fell as less aircraft were owned by customers.
The fractional ownership company made a pre-tax profit of $114 million in the first six months, compared with a loss of $349 million for the same period in 2009. The 2009 loss included aircraft write-downs and redundancies of $255 million.
“NetJets continues to own more aircraft than is required for present operations and we expect to continue to dispose selected aircraft over time,” said Berkshire Hathaway. “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.”
Berkshire Hathaway started charging NetJets a fee at the start of 2010 to cover the cost of it guaranteeing its commercial paper and other debt. The fractional ownership company paid $18.7 million for this in the first half of 2010. Berkshire did not charge for this guarantee in 2009 but said it would have increased the company’s first half loss by $38.2 million had it done so.
Berkshire said that some savings were off-set by higher fuel costs.