Tag Archives: NetJets

NetJets Europe Begins Flying on Sustainable Aviation Fuel

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Berkshire Hathaway’s NetJets Europe is the first to purchase certified sustainable aviation fuel in Spain from Air bp, the international aviation fuel products and service supplier that is the aviation division of bp.

Spain is one of the largest global aviation markets.

The ISCC PLUS certified sustainable aviation fuel (SAF) was produced at AIR bp’s Castellon refinery and is available across the Air bp network in Spain.

The fuel is produced from waste based sustainable feedstocks procured by the refinery and co-processed with fossil fuel to create a synthetic low carbon fuel. SAF is certified using International Sustainability and Carbon Certification (ISCC) PLUS procedures. This is the first time that Air bp has sold SAF using the ISCC PLUS certified method.

The Co-processing is a key step in replacing fossil fuel with renewable feedstock within refineries and helping to advance the decarbonization of transport including aviation.

The ISCC PLUS certified SAF claims an attributed saving of around 80 percent carbon emissions over its lifecycle compared with conventional jet fuel it replaces.

Christian Luwisch, NetJets Europe, executive director, said, “We are proud to collaborate with Air bp to supply SAF for NetJets’ aircraft in Europe. This new partnership is an important next step in our ongoing commitment to reduce the environmental footprint of our company. Our Owners will now benefit from this supply of SAF which we expect to be in the region of 325,000 USG during the first 12 months.”

Martin Thomsen, CEO, Air bp, said, “We are excited to announce our first sale of SAF in Spain, which opens up new supply opportunities in an important aviation market. We are also delighted to have the support of our customer, NetJets Europe, which demonstrates their willingness to invest in SAF to help reduce carbon emissions. We hope this announcement will encourage more customers to purchase SAF in Spain. We believe SAF is one of the aviation industry’s key routes to reducing carbon emissions, and ISCC PLUS certified SAF is the first step towards developing new refining and commercial solutions, including those that achieve CORSIA certification, to keep decarbonizing our offers for our aviation customers.”

Air bp notes that it was involved in fueling the first SAF flight by an airline in February 2008 and since then has been enabling ground-breaking test flights and investing in sustainable alternative fuels. To date Air bp has supplied sustainable aviation fuel to over 20 airports.

© 2021 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.

NetJets Has Record Demand

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Business is booming at Berkshire Hathaway’s NetJets, with the company experiencing record demand that has eclipsed anything in its 57-year history.

The company has been forced to pause its sales of fractional shares, leases, and jet cards for its Cessna Citation XLS and Embraer Phenom 300 jets because of “unprecedented demand within the private travel industry,” AIN reports.

NetJets is currently hiring 150 pilots to meet the demand, and is also hiring additional service personnel. It aims to have 100 pilots fully trained by October.

The company will add 39 new private jets to its U.S. fleet by the end of 2021, and is scheduled to add 40 planes a year over the next decade.

© 2021 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.

Commentary: The NetJets Dream of a Fleet of Supersonic Jets Gets Grounded

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Berkshire Hathaway’s NetJets has had its planned fleet of supersonic business jets abruptly grounded as the jet supplier Aerion has gone out of business.

Competition in the fractional jet ownership business in the fledgling supersonic airspace had been heating up as NetJets and its main competitor FlexJets prepared to spend billions on the return of supersonic flight for the business jet market.

Supersonic flight would give these companies a substantial competitive advantage over commercial airlines in their competition for first class customers, especially for long distance overseas flights.

In 2015, FlexJet became the first fractional jet ownership company to place a firm order for the jets when they ordered twenty of Aerion’s AS2 aircraft, and NetJets followed suit with twenty orders of its own.

The proposed Aerion AS2 was to be a three-engine jet with a minimum projected range between 4,750 nautical miles and more than 5,000 nautical miles. Technological breakthroughs were supposed to reduce or eliminate the sonic booms that had limited the Concorde to routes that were over water.

Aerion claimed that at speeds around Mach 1.2 a “sonic boom would, essentially, dissipate before reaching the ground.”

The potential of the Supersonic Market

Supersonic business jets would fall into an interesting category of jets that if built will have a decided advantage over other private jets, but will be too expensive for most people to own outright. While the supersonic business jet market offers opportunity, it also comes at a high cost, with the price of each jet at over $100 million. That’s the perfect opening for fractional ownership companies to plot their growth.

Only the fractional ownership companies with the deepest pockets, such as NetJets, would able to compete in this market, giving them a clear advantage over smaller charter companies, and a major capability advantage over commercial airlines.

It will be interesting to see if NetJets or FlexJets put down purchase options with any of the other companies looking to get into the supersonic airspace, but for now, the dream of cutting flight times in more than half are grounded.

© 2021 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.

Commentary: NetJets Makes High Speed Move Into Supersonic Jets

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Competition in the fractional jet ownership business is getting fiercer, as the biggest players, Berkshire Hathaway’s NetJets, and its main competitor Flexjet, prepare to spend billions on the return of supersonic flight for the business jet market.

Supersonic flight will give these companies a substantial competitive advantage over commercial airlines in their competition for first class customers, especially for long distance overseas flights.

The new supersonic business jets will fall into an interesting category of jets that will have a decided advantage over other private jets, but will be too expensive for most people to own outright.

While the supersonic business jet market offers opportunity, it also comes at a high cost, with the price of each jet at over $100 million.

That’s the perfect opening for fractional ownership companies to plot their growth.

In 2015, Flexjet became the first fractional jet ownership company to place a firm order for the jets, when they ordered twenty of Aerion’s AS2 aircraft.

Now, Aerion has made an expansive collaboration with NetJets and FlightSafety International, two Berkshire Hathaway companies, which will be sure to impact the private jet market.

Underlining the long-term focus of the partnership, NetJets has also obtained purchase rights for 20 AS2 supersonic business jets.

Aerion will start production at Aerion Park in Melbourne, Florida in 2023.

With significant growth achieved through 2020 and 2021, Aerion’s global order backlog for the AS2 is now valued at more than USD $10 billion. The new AS2—the first supersonic aircraft to enter commercial service in 51 years and the world’s first supersonic business aircraft— continues to advance toward manufacturing start after concluding wind tunnel validation late last year.

“As the leader in private aviation, we constantly look for ways to be on the cutting-edge, and expanding our fleet to become the exclusive business jet operator for Aerion Connect is a thrilling next step,” said Adam Johnson, Chairman and CEO of NetJets Inc. “Together, we will be exploring the integration of the AS2 supersonic business jet into NetJets’ global network, and we are honored to be their chosen partner to enable the Aerion Connect vision.”

Aerion will explore NetJets’ becoming the exclusive business jet operator for the global mobility platform, Aerion Connect. A vision for a future global mobility ecosystem, Aerion Connect will integrate multiple, currently siloed urban and regional networks and provide a seamless point-to-point travel experience, optimized for speed and luxury across multiple modes of transportation.

In collaboration with FlightSafety International, the premier professional aviation training company, Aerion will also develop a supersonic flight training academy for civil, commercial, and military supersonic aircraft. The Aerion-branded facility will channel FSI’s comprehensive global training expertise to provide a center of excellence for supersonic flight training and education, shaping the flight crews of the future.

The supersonic planes will give corporate leaders and other high-end travelers a compelling reason to consider fractional ownership. Even cross-country travel, which draws additional concerns about sonic booms, will be faster.

Aerion claims that its Boomless Cruise flight is feasible at speeds up to Mach 1.2, depending on atmospheric conditions, principally temperature and wind.

The company hopes that the U.S. will adopt International Civil Aviation Organization (ICAO) standards, permitting supersonic speeds over the U.S. Supersonic flights are currently prohibited.

Aerion claims that at speeds around Mach 1.2 a “sonic boom would, essentially, dissipate before reaching the ground.”

The Aerion AS2

The Aerion AS2 is a three-engine jet and is larger than the originally conceived Aerion supersonic business jet. Fuselage length is 160 feet and maximum takeoff weight is 115,000 pounds. Minimum projected range is 4,750 nautical miles with the intention to achieve a range of more than 5,000 nautical miles.

The aircraft will have a 30-foot cabin in a two-lounge layout plus galley and both forward and aft lavatories, plus a baggage compartment that is accessible in-flight. Cabin dimensions widen from entryway to the aft seating area where height is six feet, two inches and cabin width is seven feet, three inches.

Carrying eight to 12 passengers, the AS2 has an intercontinental-capable range of 4,750 nautical miles at supersonic speed.

One thing that is clear, only the strongest of the fractional ownership companies will be able to compete in this market, giving them a clear advantage over smaller charter companies, and a major capability advantage over commercial airlines.

© 2021 David Mazor

NetJets Reaches Agreement With Pilots’ Union

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After more than a decade of often contentious relations, NetJets and its pilots union have reached a new agreement without any of the past drama.

At their nadir in 2015, the rift was so wide that angry pilots conducted picketing at the Berkshire Hathaway annual meeting in Omaha.

This time, NetJets has reached its agreement with its pilot union, the NetJets Association of Shared Aircraft Pilots (NJASAP) through a less heated negotiating process.

The new agreement 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 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.”

© 2021 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

NetJets Launches Worldwide Sustainability Program

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NetJets has launched its expanded Global Sustainability Program, a commitment to reducing the environmental footprint of the brand and its Owners. As the leader in private aviation with more than 750 aircraft worldwide, NetJets’ position in the market comes with the responsibility to drive awareness and action for important issues industry-wide. As such, the brand is developing a multi-tiered program to address sustainability and continuing to examine all aspects of its business with environmental impact in mind.

NetJets’ Global Sustainability Program focuses on:

• Sustainable Fuel
o NetJets is purchasing enough sustainable aviation fuel (SAF) to account for all flights out of San Francisco, California, where the fuel supply is located, and its home base of Columbus, Ohio, in partnership with Signature Flight Support.
 This totals up to 3 million gallons of SAF produced by Neste, the largest provider of renewable jet fuel and diesel globally, and the world’s third most sustainable company according to Corporate Knights’ 2020 ranking.
 This commitment amounts to an unprecedented volume of sustainable fuel in the private aviation space and supports the continued industry availability of SAF, which can reduce greenhouse gas emissions by up to 80% compared to conventional jet fuel.
o NetJets is continuing to explore additional SAF purchase opportunities in both the U.S. and Europe.
• Corporate Responsibility
o NetJets Europe has been carbon neutral since 2012, going above and beyond European Union regulations to participate in the Emissions Trading System, which imposes a cap and cost on emissions but does not necessitate carbon neutrality.
o NetJets will offset its administrative and training flights in the U.S. beginning in 2021, amounting to approximately 1,600 flights annually.
• Consumer Participation
o The NetJets Blue Skies program encourages Owners worldwide to take responsibility for the environmental impact of their flight by seamlessly purchasing the equivalent amount of carbon credits to ensure their flight activity is carbon neutral.
 NetJets partners with ClimateCare to offset emissions through projects that protect forests, capture and destroy landfill gas and scale up renewable energy distribution, supporting several UN Sustainable Development Goals. All projects adhere to the highest leading global verification standards.
 As of October 2020, NetJets Owners in the U.S. have offset 75,000 metric tons of carbon. In Europe, Owners have offset over 1 million metric tons.

By nature of its fractional ownership model, NetJets facilitates a sharing economy that eliminates the need to reposition flights to a home base and makes full-time ownership of an aircraft unnecessary, ultimately leading to more efficiencies and less surplus time in the sky.

“As the largest and most experienced company in the private aviation space worldwide, NetJets’ promise of exceptional safety and service to Owners and employees must extend to the larger global community we impact as well,” said Brad Ferrell, Executive Vice President of Administrative Services. “Our Sustainable Aviation Fuel purchase is crucial for the continued availability of the product in the market, and we’re excited to help create that opportunity, as well as to announce the next phase of our Global Sustainability Program. There remains more to be done in the sustainable aviation space, and we look forward to being on the cutting-edge of those innovations and evolving this program in our ongoing efforts to address sustainability in the air, on the ground and with our team members.”

In order to remain accountable, NetJets will track a number of metrics, including percentage decrease in carbon emissions and miles offset to carbon neutral, to share in bi-annual updates with Owners, employees and the larger aviation community. A subsidiary of Berkshire Hathaway, NetJets’ Global Sustainability Program aligns with the holding company’s commitment to the U.N. Sustainable Development Goals.

© 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 a 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.

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.

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.

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.

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.