(BRK.A), (BRK.B)
It’s going to be a merry Christmas for NetJets’ pilots!
The approximately 2,700 pilots that fly for Berkshire Hathaway’s fractional jet ownership company have agreed to raises that will bring them $575 million spread over five years.
The new deal maintains company-funded medical insurance, offers enhanced scheduling options, expands scope protections and seniority rights, pays out a signing bonus and increases wages an average of 28 percent.
According to the certified election results, 96 percent of the pilot group participated in the referendum with 75.43 percent casting a vote in favor of ratification.
The pilots, who are all members of the NetJets Association of Shared Aircraft Pilots (NJASAP), will split a one-time bonus of $70 million.
The raises mean that a captain with ten-years-experience will earn $143,105. The salary represents a 20-percent increase over previous salary levels.
NetJets is the world-leader fractional jet ownership, with 60-percent of the market, but the move is unlikely to leave it at a competitive disadvantage with its smaller competitors.
In mid-December, Flexjet and Flight Options pilots voted in favor of joining NJASAP, and the salaries negotiated with NetJets will surely be the basis for NJASAP’s negotiations with other fractional jet companies.
The new NetJets pilots’ agreement came after a contentious labor dispute that led to NetJets’ pilots picketing Berkshire’s annual meeting in Omaha, Nebraska, and in September, the pilots began picketing at a number of airports.
Change in Leadership Led to Breakthrough
On June 1, 2015, Berkshire Hathaway, the owner of NetJets, dismissed NetJets CEO and chairman Jordan Hansell, replacing him with Adam Johnson, who had spent 22 years at NetJets. The change led to a new contract with its flight attendants in October, and then an agreement with the pilots in November.
Berkshire Hathaway purchased NetJets, the leader in fractional jet ownership, in 1998 for $725 million.
© 2015 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.