Warren Buffett led Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s jet management company has seen a recovery in the U.S. private flight demands. NetJets chief Jordan Hansell told Bloomberg during a phone interview that the United States is leading the recovery while European market remains sluggish due to the weakening economy. Mr. Hansell is in Geneva to attend the European Business Aviation Convention & Exhibition.
NetJets serves business clients and wealthy individuals who buy a stake in planes to get flight hours. The 2008 financial crisis severely affected luxury flying, forcing NetJets to cut planes and jobs. But the company placed an order worth $17.6 billion since 2010, hoping that the market will recover in the coming decade. That includes a $9.6 billion deal for 275 of Bombardier Inc. (TSE:BBD.A)’s Challenger planes signed in 2012. The company has also placed an order for 50 Global planes for $2.8 billion. NetJets has raised the benefits and profile of private aviation.
On Monday, Bombardier Inc. (TSE:BBD.A) launched a new mid-size Challenger 350 aircraft at the European Business Aviation Convention and Exhibition in Geneva. NetJets will be getting this aircraft in 2014.
Hansel Reviving NetJets
Showing signs of economic recovery, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B)’s NetJets announced that the number of new customers increased by 55 percent in the first quarter of this year compared to the same period a year ago. Hansell said that the market hasn’t seen a huge upswing, but it is improving year after year since 2009. NetJets says its business is still 20 percent lower than the pre-crisis peak.
Warren Buffett purchased NetJets in 1998, and the company continued to lose money for over a decade through the recession. But Jordan Hansell, who was promoted to CEO of the company in 2011 has helped revitalize the company. In 2009, Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) said that NetJets became a major problem for the conglomerate as the financial crisis made it more difficult to get new customers.
In Europe, NetJets operates an affiliate. Eurozone economy shrank 0.2 percent during the first quarter, while U.S. GDP grew at 2.5 percent annualized rate in the same period.