Buffett’s NetJets Widens Lufthansa Ties
NetJets Inc., the private-aircraft company owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK\S), deepened a partnership with Deutsche Lufthansa AG (LHA) to offer private jet service to 3,000 North American airports.
The accord expands an agreement now in place to serve 1,000 destinations in Europe. The target market is wealthy travelers flying from Europe, and passengers can book just one trip, a smaller commitment than typically required for most charter-jet flights, said Martin Riecken, a Lufthansa spokesman.
“The beauty for the customer is he can book a trans- Atlantic flight from Europe to the U.S.” on a Lufthansa jet and then schedule a domestic flight leg, Riecken said today in a telephone interview.
Customers will have a dedicated service team to book flights, ground transportation and in-flight food and drink, Cologne, Germany-based Lufthansa said in a statement. Passengers can also get personal transfer service when connecting from overseas flights on Lufthansa planes to a private jet flight, plus access to airport lounges in 21 North American cities.
The Lufthansa-NetJets North American partnership will compete with services such as Delta Air Lines Inc. (DAL)’s Delta Private Jets, which offers blocks of flight time as short as 10 hours that can be used on multiple trips.
The cost of a NetJets flight varies by length of flight and size of aircraft, Riecken said.
Super Bowl Flight
For example, chartering a four-person plane to Indianapolis, site of the National Football League’s Super Bowl on Feb. 5, from New Jersey’s Teterboro airport near New York would be $10,800, Riecken said. The same trip on an eight- passenger jet would be $13,488, he said.
Delta’s hourly pricing can range from $4,750 to $11,900, according to its website.
Lufthansa Private Jet passengers will earn 10,000 frequent- flier miles per flight leg, while NetJets will operate the flights with planes such as a seven-passenger Hawker 400XP or a 14-person Gulfstream G550, Lufthansa said in the statement.
“We are pleased to collaborate with Lufthansa on the expanded Lufthansa Private Jet product and provide travelers access to the convenience and flexibility of flying privately with NetJets,” Adam Johnson, president of sales, marketing and service for NetJets North America, said in an e-mailed statement.
NetJets, which Berkshire purchased in 1998, became “the major problem” for the Omaha, Nebraska-based parent in 2009 as the recession made it more difficult for the unit to fill planes, Buffett said in that year’s annual report.
Buffett replaced NetJets founder Richard Santulli with David Sokol, and the unit returned to profit after firing pilots and writing down the value of aircraft.
Buffett promoted Jordan Hansell to chief executive officer of NetJets in 2011, giving the unit its third leader in less than two years. Sokol, a former Berkshire energy executive, resigned last year.
Last March, NetJets agreed to buy as many as 120 planes from Bombardier Inc. (BBD/B), including 50 firm orders with a retail price of $2.8 billion and deliveries beginning in 2017. NetJets has access to 750 jets worldwide.