Warren Buffett's NetJets Just Made a Record Purchase
The company's order is valued at $9.6 billion with NetJets set to buy as many as 425 jets from Bombardier and Textron's Cessna unit. NetJets CEO Jordan Hansell said that he is looking to bolster his company's jet fleet ahead of strengthening of US and European economies which will "ultimately come back to a much stronger position."
The deliveries of the jets could begin in as soon as two years. Currently, NetJets fleet has more than 700 planes. The order is for as many as 275 Bombardier Challenger aircraft and up to 150 Cessna Citation Latitude jets. "It's prudent to take a stand now and make a decision now to be sure that we're well positioned to compete over the longer term," Hansell said on a conference call.
NetJets said that the purchase announced today is the largest order ever for business jets, more than NetJets' March 2011 order for as many as 120 Bombardier planes. The deal is seen as a boon for the global business jet sector which has been hit hard in the wake of the financial crisis.
"All the manufacturers want to make a deal today," explained Janine Iannarelli, president of Houston-based plane broker Par Avion.
"You wield a lot of power when you go in and place an order like that," she continued.
The order from NetJets is an aggressive move as the company is making a big bet on rising future demand in the face of slumping economies. CEO Hansell, however, is optimistic about a cycle upturn and is focusing on being ahead of the curve for his customers.
"By increasing the range and endurance of our fleet, we will allow our owners to get to even more destinations worldwide," Hansell said.
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