NetJets set to enter China with partners
Warren Buffett has said that NetJets will enter China with "some first class partners."
Warren Buffett has said that NetJets will enter China with “some first class partners.”
As with NetJets Europe the company needs to partner to meet Chinese ownership regulations for Air Operating Certificates.
“NetJets is proceeding on a plan to enter China with some first-class partners, a move that will widen our business moat.,” said Buffet in Berkshire Hathaway’s 2011 annual report. “No other fractional-ownership operator has remotely the size and breadth of the NetJets operation, and none ever will. NetJets’ unrelenting focus on safety and service has paid off in the marketplace.”
Berkshire says NetJets generated pre-tax earnings of $207 million in 2010 compared to a pre-tax loss of $711 million in 2009, which included $676 million of asset writedowns and other downsizing costs.
“A few years ago NetJets was my number one worry: Its costs were far out of line with revenues, and cash was haemorrhaging,” said Buffett. “Without Berkshire’s support, NetJets would have gone broke. These problems are behind us, and Jordan is now delivering steady profits from a well-controlled and smoothly-running operation.”
NetJets’ earnings increased 10% mainlydue to higher revenues and lower aircraft maintenance costs thanks to a 10% reduction in the size of the fleet. Since the end of 2008, NetJets has reduced the number of aircraft in its fleet by 20%.
The number of revenue hours flown was very similar to 2010.
NetJets is also looking at setting up similar operations in India and Russia.