Warren Buffett's private-jet timeshare business is laying off the equivalent of 300 full-time pilots or nearly a third of its flight crew.
The news shows the extent of the collapse in the private-jet market and will be an embarrassment for Buffett — reckoned to be the smartest investor on the planet.
NetJets Europe allows the rich and famous to buy flying time on its 168-strong fleet of Dassault Falcons and Hawkers — celebrity clients include tennis champion Roger Federer.
The swiftness of the global economic slump, however, appears to have caught NetJets by surprise.
Only last year it took on 341 new pilots taking its flight crew total to 1046 having hired 200 in 2007. Last year the business also took delivery of 30 new aircraft.
Sources reckon that 18 months ago NetJets' pilots were working at full throttle in charge of as many as six or seven flights every day. The average number of flights is reckoned now to be down to around one-and-a-half per day. The company's pilots have been told by NetJets' management that it is looking to reduce the payroll through a combination of redundancies and cutting working hours. Around a fifth of NetJets Europe's pilots are reckoned to be Britons.
“We have told our people that we have 60,000 excess duty days that we need to get rid of,” said Robert Dranitzke, NetJets' chief operating officer. NetJets is reckoned to have only turned profitable in Europe in 2006 after a decade of cumulative losses of more than $200 million (£122 million).
With the corporate and VIP travel market collapsing, it is understood that fees in the private-jet market — which have been around £85,000 for 25 hours flying time — are falling year-on-year by about 15%.
In the spring NetJets Europe claimed that it had recruited 270 new customers in the preceding year although the Evening Standard revealed that the new recruits came in the same year that the company had lost 268 of its old customers.
NetJets was founded in the Nineties by Dick Santulli who called the time-share concept “fractional ownership”. He subsequently sold the business to Buffett's Berkshire Hathaway investment empire.
Related LinksShare Investor Blog - Stockmarket & Business commentary
Share Investor New Zealand Business News- Get more business news
Discuss this topic @ Shareinvestor.net.nz
Share Investor's Daily Forex Updates
Recommended Amazon Reading
Warren Buffett and the Interpretation of Financial Statements: The Search for the Company with a Durable Competitive Advantage by Mary Buffett
Buy new: $16.47 / Used from: $13.47
Usually ships in 24 hours
No comments:
Post a Comment