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NetJets

Signature Flight Support, Neste and NetJets in Strategic Partnership to Accelerate the Adoption of Sustainable Aviation Fuel

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A pioneering collaboration combines Sustainable Aviation Fuel (SAF) production and distribution, establishing a permanent supply for private aviation operators at San Francisco and London-Luton.

Cognizant of the important and active role that private aviation plays in environmental responsibility, Signature Flight Support announces the introduction of Signature Renew, a company-wide global sustainability initiative to innovate and invigorate the journey toward net-zero carbon emissions. Central to the program is accelerating the use of SAF for private aircraft, with Signature initially establishing permanent supplies of low emission fuel at two key gateways – San Francisco Int’l Airport (SFO) in the United States and London-Luton Airport (LTN) in the United Kingdom.

Neste, a leading producer of renewable products and the world’s third most sustainable company according to Corporate Knights’ 2020 ranking, has agreed in principle to supply Signature Renew with Neste MY SustainableAviation Fuel™. Encompassing an expected five million gallons, the volume of SAF that Signature has committed to purchase from Neste is the largest agreement by a Fixed Base Operator to date. Furthermore, NetJets, the worldwide leader in private aviation, has announced its role as a launch customer for Signature Renew supplied SAF in San Francisco.

Neste MY Renewable Jet Fuel™, is a sustainable aviation fuel that in neat form and over the lifecycle reduces GHG emissions up to 80% compared to fossil jet fuel. The fuel provides an immediate solution for reducing the direct carbon emissions of flying.

The creation of the Signature Renew program aligns with the needs of many aircraft operators that are accountable to their parent organization’s corporate sustainability goals. SAF gallons purchased via Signature SFO will take advantage of the California Low Carbon Fuel Standard (LCFS) tax incentive program, while at London-Luton operators can reduce carbon offsetting needs for the EU ETS.

Prior to use, the SAF is blended with fossil jet fuel and is then verified to meet ASTM jet fuel specification. In its neat form and over the lifecycle, SAF can reduce greenhouse gas emissions by up to 80% compared to conventional jet fuel. Once blended at a 35% ratio, Signature anticipates more than a 25% reduction in direct net lifecycle greenhouse gas emissions from aircraft using the SFO and LTN SAF blends.

“Signature is undertaking a momentous step that enables the wide-scale adoption of SAF,” explained Tony Lefebvre, Chief Operating Officer for Signature. “Prior to establishing a permanent supply of SAF, FBOs have only been able to provide a few thousand gallons at one time – typically by request of an individual aircraft operator or for a one-off event. Signature is committing to having SAF available for uplift in San Francisco in the next few weeks, culminating in the world’s first 100 percent sustainably supplied FBO Q1 2021.” He continued, “By having the first FBO in the world that is able to offer operators a reliable, full volume supply of SAF at a competitive price only a few dollars beyond traditional Jet A, we are providing the critical acceleration that industry trade groups and aviation regulators have cited as a necessary step on the path to widespread adoption.”

Neste has been at the vanguard of sustainable aviation fuel production for nearly a decade, and the company will have the capacity to produce some 1.5 million tonnes (515 million gallons) of SAF annually by 2023. Neste’s SAF is made from sustainably sourced, renewable waste and residue materials – such as used cooking oil for example. It is a drop in fuel that offers an immediate way to reduce the direct greenhouse gas emissions from aircraft, requiring no new investments, modifications, or changes to procedures.

“Together, we are taking a big step forward in providing passengers with a way to reduce their own environmental handprint,” says Chris Cooper, Vice President, Renewable Aviation North America, Neste. “People who travel by private aircraft know there’s an environmental impact and many of them want a more sustainable option. In fact, a good number of people relying on private aviation are either working for companies with established climate goals or individuals who have personally committed to fighting climate change. This partnership means that passengers can look forward to being able to board a private aircraft fueled by SAF and help fight – not contribute – to climate change in the near future.”

Additionally, NetJets is the launch customer of sustainable fuel supplied by the Signature Renew program at SFO with a commitment to purchase up to 3m gallons of SAF, representing a large portion of Signature’s total volume at the airport. The non-exclusive agreement will support the continued expansion and availability of SAF throughout the business and general aviation industry. All of NetJets aircraft visiting the San Francisco Int’l Airport will be supplied with Neste-produced low-carbon fuel, uplifted by Signature.

“NetJets is pleased to be Signature’s first major SAF client,” said Brad Ferrell, NetJets Executive Vice President, Administrative Services. “We are thrilled to be the first private aviation company with a commitment to purchase sustainable fuel for all NetJets flights out of San Francisco International Airport (SFO) and Columbus International Airport (CMH). This first initiative helps to lay the groundwork for our sustainability program which aims to solidify our unwavering commitment to excellence.”

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Accepts Delivery of New Super-Midsize Business Jet

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Berkshire Hathaway’s NetJets accepted its first delivery of the new Cessna Citation Longitude super-midsize business jet on Dec. 31, 2019.

This delivery represents a significant milestone for both NetJets and Textron Aviation as they bring this revolutionary aircraft to passengers. NetJets anticipates that its Longitude will enter service for NetJets Owners in early 2020.

“We are pleased to have the new Citation Longitude enter the NetJets fleet and continue to strengthen a relationship that goes back decades,” said Ron Draper, president and CEO, Textron Aviation. “The Longitude, with class-leading performance, efficiency and an unrivaled cabin experience, is already redefining its category and will join the Citation Latitude as fleet favorites for NetJets Owners.”

“No matter the reason for being on board, from takeoff to landing, the innovations of the Citation Longitude make it the most enjoyable flight imaginable,” said Adam Johnson, Chairman & CEO, NetJets.

The new Citation Longitude incorporates the latest technologies throughout the aircraft like integrated autopilot and autothrottle systems with emergency descent mode (EDM). The aircraft is equally designed around the pilot experience, passenger comfort and overall performance, delivering an aircraft that lives up to its designation as the flagship of the Citation family of business jets. The Citation Longitude gained FAA certification in September 2019 and Textron Aviation began customer deliveries soon after.

NetJets has operated a fleet of nearly 500 Cessna Citations since 1984. In addition to the Citation Longitude aircraft order, NetJets has taken delivery of more than 100 Cessna Citation Latitude aircraft. Owner demand has ranked the Latitude as the best-selling aircraft in the NetJets portfolio, further establishing the aircraft as Textron Aviation’s best-selling mid-size jet, outselling its nearest competitor 4:1.

With a range of 3,500 nautical miles (6,482 kilometers) and full fuel payload of 1,600 pounds (726 kilograms), Textron Aviation designed the Citation Longitude to elevate passenger expectations in the super-midsize class by delivering cabin sound levels that are nearly twice as quiet as the nearest competitor, a low cabin altitude (5,950 feet/1,814 meters), more standard features and an elegant yet comfortable, bespoke interior, fully meeting the NetJets standard for customer satisfaction.

NetJets’ Longitude features a standard double-club configuration of eight fully berthable seats, delivering the most legroom in the super-midsize class. A stand-up, 6-foot (1.83 meters) tall flat-floor cabin and an available streamlined divan enable easy transit along the cabin passageway while a class-leading walk-in baggage compartment accessible throughout the entire flight ensures passengers experience unparalleled convenience. State-of-the-art cabin technology empowers passengers to manage their environment and entertainment from any mobile device, while in-flight internet maximizes productivity.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Announces QS Security Services

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NetJets has rolled out QS Security Services to provide global security as an add-on option for its customers.

The new subsidiary will also help to enhance NetJets’ crew security by vetting airport-hotel transportation/routes and hotels used for crew rest, according to Jack VanderStoep, v-p of global security at NetJets and the head of QS Security Services.

QS Security Services will initially be offered as a premium service on select routes with tiered security packages that correspond to both the destination threat level and passenger needs. Currently, security packages are being offered at Paris Le Bourget and popular destinations in Mexico, VanderStoep told AIN. This will be progressively expanded to the rest of North America and Europe next year and Central and South America, the Middle East, and Africa in 2021, with worldwide coverage expected in 2023.

Security packages range from vetted limo transportation services and routes to armed convoys employing armored vehicles, in addition to close-protection agents and medically trained personnel. QS Security will also be able to provide onboard armed security officers to meet Homeland Security requirements to operate into Ronald Reagan Washington National Airport. Beyond the currently-available executive protection services, the subsidiary later plans to add security consulting and training to its portfolio.

QS Security Services will also eventually provide security for customers of NetJets subsidiaries NetJets Europe and Executive Jet Management, said VanderStoep.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Threatens to Move Out of Ohio if Tax Breaks Repealed

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Berkshire Hathaway’s NetJets is threatening to move its business out of Ohio if proposed tax changes included in Ohio’s state budget become law.

The repeal proposal included in the House budget package removes the cap on sales taxes of fractionally owned aircraft. The cap was enacted in 2003 and is currently set at $800.

Also to be repealed would be a tax exemption for sales of property and services to maintain and repair fractionally owned aircraft.

“NetJets would either have to pass this tax obligation through to its customers which would adversely affect NetJets competitiveness by increasing the price of its products or alternatively, it would have to incur the tax impact itself thereby negatively affecting its profitability,” Bradley Ferrell, Executive Vice President of Net, says. “Neither of these options would be palatable to NetJets long term. Instead, NetJets would be forced to consider other states with more favorable sales tax environments. And there are plenty.”

The tax breaks also benefits NetJets’s Cleveland-based competitor, Flexjets.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets May Lose Ohio Tax Breaks

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Berkshire Hathaway’s NetJets will lose tax breaks for fractionally owned aircraft if a provision in the Ohio’s state budget proposal becomes law.

The tax breaks also benefits its Cleveland-based competitor, Flexjets.

The repeal proposal, which was included in the latest House budget package, removes the cap on sales taxes of fractionally owned aircraft that was enacted in 2003 that is currently set at $800.

Also repealed would be a tax exemption for sales of property and services to maintain and repair fractionally owned aircraft.

According to the State Department of Taxation’s Tax Expenditure Report, the repeal of the $800 sales tax cap would bring in an additional $14 million a year.

© 2019 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Reaches Agreement with Pilots Union

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After years of pitched battles with its unions, NetJets is finding negotiations to be less acrimonious this time around.

NetJets, the worldwide leader in private aviation, has reached an agreement with its pilot union, the NetJets Association of Shared Aircraft Pilots (NJASAP) that gives all crewmembers the opportunity to earn additional compensation while enhancing quality of life on tour.

NetJets elected to initiate mid-term bargaining to improve compensation for long-term and new hire pilots, leading to the development of a new program that expressly recognizes the exceptional efforts its pilots put forth on a daily basis.

NetJets Chairman and CEO Adam Johnson and NJASAP President Pedro Leroux signed the 2018 Tentative Agreement late yesterday afternoon, following several months of collaboration between the parties that paved the way for an ambitious six-week negotiation.

The 2,500-member pilot group ratified the measure in late December with 81-plus percent voting in favor of the package of amendments that extends the 2015 Collective Bargaining Agreement an additional three years through 2026.

Among other enhancements, the newly ratified Flight & Duty Pay Program (FDPP) introduces new compensation elements, ensuring NetJets continues to be the industry leader in pilot compensation and work rules; the FDPP benefits both the pilot group and propels the business and brand forward.

“Ratification of the 2018 Tentative Agreement represents countless hours of hard work from both the NetJets team and NJASAP as we worked toward a common goal that is mutually beneficial and built on a foundation of trust and transparency,” Johnson said. “In the spirit of true collaboration, the agreement has our pilots’ best interests in mind and maintains NetJets’s position as the industry leader in pilot relations. We believe this agreement and our relationship with our crewmembers are truly unique in our industry.”

Added Leroux, “The NJASAP Executive Board is exceedingly pleased with the outcome of this negotiation – an ambitious undertaking characterized by honesty, goodwill and a genuine commitment to continuing collaboration. It is my privilege to recognize the outstanding efforts of leaders and representatives from both NetJets and NJASAP and to express my sincere appreciation to the pilot group for its thoughtful review and ratification of this ground-breaking agreement.”

© 2019 David Mazor


Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets to Add 325 Cessna Jets to Fleet

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Berkshire Hathaway’s fractional jet ownership company, NetJets, has signed a deal with Textron, the maker of the Cessna brand, to add as many as 325 of the company’s jets to its fleet.

The deal, announced on the eve of the National Business Aviation Association’s annual corporate jet show, has a value of roughly $10 billion.

The new agreement will give NetJets the ability to add up to 175 super-midsize Citation Longitude aircraft, as well as up to 150 of the new large cabin Citation Hemisphere aircraft to their fleet.

Textron Aviation began their relationship with NetJets more than 30 years ago when with the Citation SII. Since then, NetJets has owned and operated nearly 500 Citations including the Citation Latitude, Citation Sovereign, and Citation XLS.

NetJets recently ordered their 100th Citation Latitude, and are forecasting delivery of the first Citation Longitude in the second half of 2019.

The Longitude is a new super-midsize, 8-passenger jet that has a top-speed of 554-MPH and an endurance aloft of 7:45 hours.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Pilots Can Fly Until Age 70 Under Proposed FAA Reauthorization Bill

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The FAA reauthorization bill currently under consideration by Congress would have a mandatory retirement age of 70 for NetJets pilots.

The mandatory age 70 retirement age for certain Part 135 and Part 91K pilots would apply only to companies that perform at least 150,000 turbojet operations in a calendar year. The only company that currently has that level of turbojet operations is NetJets.

The AARP has come out in opposition to any age limits as arbitrary.

“AARP has long opposed mandatory retirement; using an arbitrary age as a proxy for competence is wrong in any occupation, and it is wrong for pilots,” AARP stated in a letter to House Transportation and Infrastructure Committee chairman Bill Shuster and ranking member Pete DeFazio.

“Pilots should be judged on the basis of their individual ability, flying skills, and their health, not on stereotypes or mistaken assumptions about their fitness based on age,” notes the nonprofit, nonpartisan organization, which has nearly 38 million members.

However, NetJets has come out in support of the age 70 retirement age.

“The lack of a pilot age restriction for large private air carriers is a growing concern in aviation safety,” NetJets said in a statement. “NetJets supports an amendment to the FAA Reauthorization bill that would impose an age restriction for pilots of large, private air carriers that is similar to the restriction that currently exists for commercial airlines. Such a restriction is an important safety measure for private carriers whose flight operations are comparable in size and complexity to their commercial counterparts. We hold passenger safety as our highest priority and we look forward to working with Congress on this common-sense regulation that will make air travel safer for everyone.”

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets

NetJets Appoints Mario Pacifico as European CEO

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Berkshire Hathaway’s NetJets has announced the appointment of a new European CEO to coincide with the launch of the company’s brand new Cessna Citation Latitude aircraft.

With more than 25 years of leadership experience across Europe, Asia and the U.S, that Mario Pacifico has joined NetJets as its new European CEO. Pacifico will oversee the company’s operations in Europe out of their London office.

Pacifico joins NetJets at a time of significant growth. In 2017, NetJets flights in Europe grew by 7.2% to a total of around 50,000 flights. And total NetJets flight hours in Europe were more than double the amount of the wider industry.

The appointment coincides with NetJets’ announcement that it has successfully obtained certification to operate its new Cessna Citation Latitude aircraft at London City Airport, allowing business travellers to save a significant amount of time in their journeys to and from London’s financial district.

The Citation Latitude is the newest addition to NetJets European fleet of around 90 aircraft. The aircraft seats up to eight passengers and is easily able to fly to Dubai, Nigeria and Beirut from London.

NetJets is the only company that currently operates the aircraft into London City Airport. Over 53% of NetJets’ European customer base comes from London’s finance sector – with private equity and hedge fund management seeing the most growth over the past 12 months.

Mario Pacifico said: “NetJets now accounts for 6% of the total private jet market in Europe with around 74,000 flight hours. This is an exciting time of growth and I look forward to working with the team here to propel the company forward at this pinnacle moment.

“NetJets is committed to improving the lives of its clients, and I am pleased to launch the Cessna Citation Latitude at London City Airport. The aircraft’s stellar short-field performance will enable us to access many small general aviation airports that offer important time savings for businesses and individuals looking to work more efficiently.”

Robert Sinclair, CEO of London City Airport, added: “London City Airport offers London’s most central private jet facility, just 5 miles from the City, with a 90 second service from car to plane. This speed and efficiency is valued by NetJets and its clients, and we look forward to continued growth of its business here.”

Founded in 1996, NetJets is the only pan-European business aviation company with its own fleet of aircraft.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.

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NetJets Subsidiary Acquires Cerretani Aviation Group

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QS Partners, the aircraft brokerage subsidiary of Berkshire Hathaway’s NetJets, has acquired aircraft brokers Cerretani Aviation Group of Boulder, Colorado.

QS Partners was launched in 2016 to meet what NetJets called “a growing need from our clients regarding whole-aircraft sales and trades and leveraging NetJets’ global network of resources…”

With the acquisition of Cerretani Aviation Group, the company will more than double its size.

In a release, Nick Cerretani and Paul Kirby said, “We are pleased to announce that Cerretani Aviation Group has merged with QS Partners, a leading aircraft sales company composed of individuals with whom we share a commitment to integrity, knowledge, and insightful service to our clients. While we will operate under the QS Partners brand, we will remain based in Boulder, Colorado, and will retain all of our current staff.

Our merger with QS Partners will enable us to significantly expand our industry reach and enhance transactional opportunities for our clients, whether buying or selling. At the same time, we are aware of the foundations of our success and will focus on providing our clients the personal attention and independent thinking they have come to expect from Cerretani Aviation Group.”

The Cerretani Aviation Group was founded in 2001 by Nick Cerretani, a former Executive VP at Flight Options, and Paul Kirby, co-founder of Kirby Ramsey Aviation.

© 2018 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.