If it’s possible, Berkshire Hathaway’s NetJets unit seems to
have troubles rivaling those of longtime pitchman Tiger Woods. But Berkshire
chief Warren Buffett says the company’s rehabilitation is well under way.
NetJets, which sells fractional ownership shares in private
planes to well-to-do travelers, was “the major problem for Berkshire last
year,” Buffett wrote in his annual letter to Berkshire shareholders.
NetJets lost $711 million for the year, Buffett wrote,
wiping out previous years of profitability and leaving the business $157
million in the red, before taxes, since Berkshire acquired it in 1998.
Back then, Berkshire forked over $725 million in cash and
stock for the company, then called Executive Jet. In an interview with Forbesmagazine,
Buffett made clear that he had big plans for the company, likening it to a
startup that revolutionized the package delivery business.
“FedEx started small and is now huge,” Buffett
said. “Same thing will happen with Executive Jet.”
Executive Jet, now called NetJets, has indeed gotten huge.
The value of its jet fleet exceeds that of its three top competitors combined,
Buffett wrote in this year’s letter.