FlightSafety, NetJets Performance Fell in 2003
Profits soared last year at Warren Buffett’s holding company Berkshire Hathaway, though not all of the company’s units did well. In his annual letter to shareholders, released on Saturday, Buffett summarized the reduced performance of FlightSafety International and NetJets. FlightSafety operating earnings dropped from $183 million to $150 million, partly as the result of a one-time, pre-tax gain in 2002 from the sale of FlightSafety’s partnership interest in the former FlightSafety Boeing Training International. The corporate aviation business has slowed significantly in the past few years, noted Buffett, “and this fact has also hurt FlightSafety’s results.” Meanwhile, NetJets lost $41 million in 2003, according to Buffett. The company had a “modest operating profit” in the U.S., but this was more than offset by a $32 million loss on aircraft inventory and by continued losses in Europe. The $32 million loss NetJets took last year occurred because of falling prices for used aircraft early in the year, Buffett said. Despite the losses in Europe, “we are now adding European customers at a good pace. During the years 2001 through 2003, we had gains of 88, 61 and 77 percent, respectively, in European management-and-flying revenues.”
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