Buffett Jets Chief Says U.S. Leads Private-Flight Rebound
“The U.S. from our perspective is coming back and doing relatively well,” Jordan Hansell, chief executive officer of Berkshire Hathaway Inc. (BRK/A)’s NetJets, said by phone yesterday from Geneva, where he is attending the European Business Aviation Convention & Exhibition. “Europe has remained difficult.”
NetJets caters to wealthy individuals and business clients who take a stake in planes in exchange for flight hours. When the U.S. financial crisis sapped luxury flying, the company cut jobs and planes before embarking on $17.6 billion of orders starting in 2010 on a bet that the market would recover over the coming decade.
The number of new NetJets owners increased 55 percent in the first quarter from a year earlier, Hansell said. Regarding the U.S. market, he said: “I wouldn’t say it’s a huge upswing, but it’s year over year over year, from 2009, been an improvement.”
Buffett promoted Hansell, 42, to CEO of Columbus, Ohio-based NetJets in 2011. He has helped revitalize the business, which lost money from when Berkshire purchased it in 1998 through the recession.
In 2009, the unit became “the major problem” for Omaha, Nebraska-based Berkshire as the recession made it more difficult to fill planes, Buffett said in that year’s annual report.
Europe, where NetJets operates an affiliate, remains a challenging market, Hansell said. The euro-area economy contracted 0.2 percent in the first quarter, its sixth straight decline. Gross domestic product in the U.S. grew at a 2.5 percent annualized rate in the first quarter.
NetJets said it will be the first operator of Bombardier Inc. (BBD/B)’s’s Challenger 350 midsize jet, for which the company placed 75 firm orders in June. The plane features leather and wood trim and a single-service beverage maker, NetJets said in a statement.