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NetJets places record order for Bombardier planes

The agreement consists of 50 firm orders and 70 options, valued at more than $6.7 billion. NetJets says it anticipates a rebound in luxury business travel.

March 02, 2011|Bloomberg News

NetJets Inc., the business jet operator owned by Warren Buffett's Berkshire Hathaway Inc., said it placed a record order for as many as 120 Bombardier Inc. planes in anticipation of a rebound in luxury travel.

The agreement, worth more than $6.7 billion at list prices, comprises 50 firm orders and 70 options, NetJets said Wednesday. Bombardier said it's the largest business aircraft sale in the company's history.

How much Columbus, Ohio-based NetJets will pay for the aircraft, which will be delivered starting in the fourth quarter of 2012, wasn't disclosed.

NetJets, which also ordered 125 Embraer jets in October, said it expected the planes' arrival to help meet increasing demand after what will probably be a "difficult" 2011. The unit made a profit last year after David Sokol, named by Buffett to lead a turnaround in 2009, fired employees and wrote down plane values.

"NetJets is probably positioning themselves for a pickup in demand next year," said Julius Yeo, a Singapore-based aerospace consultant at Frost & Sullivan Inc. "The business jet market in the U.S. still hasn't really picked up yet."

The firm orders include 30 of Montreal-based Bombardier's Global 5000 Vision and Global Express XRS Vision aircraft, which will be delivered starting next year. The deal also includes 20 firm orders for Bombardier's new Global 7000 and Global 8000 jets, which will be handed over starting in 2017.

NetJets has a fleet of more than 800 business jets, including ones made by Dassault Aviation, Textron Inc.'s Cessna Aircraft Co. and General Dynamics Co.'s Gulfstream Aerospace Corp. The company operates a fractional ownership model that lets customers buy flight hours across a fleet of jets.

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