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NetJets Earnings Soar 19% Despite Weaker Revenues

NetJets Earnings Soar 19% Despite Weaker Revenues

2017 04 04

2017 04 04

Revenues soared 19 percent last year at fractional provider NetJets, despite lower revenues stemming from a slight erosion in aircraft sales.

Despite slightly lower aircraft sales, fractional provider NetJets’ pre-tax earnings increased by 19 percent last year, “primarily due to lower subcontracting expense and a decline in losses from aircraft impairments and dispositions, partly offset by increases in depreciation and restructuring charges and reduced aircraft sale margins,” parent company Berkshire Hathaway said in its recently released 2016 results. In 2015 such earnings declined $46 million at NetJets as a surge in aircraft sales margins were more than offset by higher personnel, aircraft subcontracting and maintenance expenses. “A portion of the increase in personnel costs pertained to lump-sum payments made in connection with a collective-bargaining agreement reached with our pilots in the fourth quarter of 2015,” the company said.

Last year, revenues at NetJets slumped by 2 percent year-over-year due to lower aircraft sales. However, it wasn’t that bad of a year for sales, considering the significant gain from 2014 to 2015. Specifically, Berkshire noted that NetJets’ aircraft sales in 2015 climbed by 50 percent over 2014, so the 2 percent decline reflects that it retained most of that higher sales level last year.

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