"Air-oholic..."
Let's do the quick math.
Approximately 275 sold whole aircraft equivalents in shares with approximately 385 registered aircraft.
Approximately 40 whole aircraft equivalents in sold cards with approximately 58 registered aircraft.
Won't bother with Europe for the purposes of this exercise but its Europe is a net negative with approximately 100 sold whole aircraft equivalents in shares and cards with just under 150 registered aircraft.
More than 100 aircraft "disposed of" from the US fleet.
Revenue flight demand is down double digits year over year.
Operational efficiency (Utility) is trending the historical low range.
Fleet availability (aircraft airworthiness) is trending the historical low range.
Number of employees per sold aircraft equivalent is trending historical high range.
Approximates are used because different technical issues can change specific numbers but the round numbers and trends are clear. In addition, it makes it clear this is all publicly available data that the industry, industry associations (such as GAMA, NBAA, NATA) and government agencies (such as FAA, NTSB, BLS) use and not an internal bookkeeping shell game.
Therefore, Top Line revenue is down dramatically YOY during the past three years (if you don't included the unprecedented disposal of assets, that Berkshire booked an unprecedented write-off with in 2009). Why? Sales, average sale price, and sales margins are in a steady state of decline (gross number of whole aircraft equivalent card and share sales remain at all time lows and new vs used aircraft values and margins are on the historical low end of the range). Number of total sold aircraft equivalents and aggregate Monthly Management Fees are in a steady state of decline. Total number of aircraft and the aggregate number of revenue flight hours are in a steady state of decline. Operational efficiency (Utility) is trending the historical low range.
When any conglomerate says X company made X dollars and doesn't list where or how, always ask where or how. More importantly, ask yourself if a company didn't make real money (cash), why is any CEO unnecessarily posting a profit only to pay taxes on said "earnings" against the shareholders interests.
I don't think history will be as kind to Warren once he's gone as it has while he is alive. He knows this. There are many stories that will surface when he no longer has some much influence over the national and business press. His failures in corporate governance and hypocrisy when it comes to corporate transparency will unfortunately be his last chapter. What is clear is that its all impacting the Berkshire shareholder today. Berkshire has never traded lower and with a company that doesn't pay dividends stock price is everything.
What does it all mean for the average Joe? Not a damn thing. But if you truly believe any fractional company is making cash while in a steady state of decline, and I mean real cash, you probably shouldn't be in a cockpit.
Eventually, years possibly or decades from now, some ceo will have to breakup Berkshire Hathaway. The bottom line is today Berkshire is not as valuable as a whole as it is in pieces. To maximize shareholder value it must be broken up. Sadly, this is where history won't be kind to Buffett. And where Buffett originally missed it, that's where DLS would have taken it. Buffett finally figured that out.
Until that day, I guess you can bank on the below... and let the make believe numbers make Buffett feel just a little bit better.
http://www.berkshirehathaway.com/letters/2011ltr.pdf
"Berkshire’s newer shareholders may be puzzled over our decision to hold on to my mistakes. After all, their earnings can never be consequential to Berkshire’s valuation, and problem companies require more managerial time than winners. Any management consultant or Wall Street advisor would look at our laggards and say “dump them.”
That won’t happen. For 29 years, we have regularly laid out Berkshire’s economic principles in these reports (pages 93-98) and Number 11 describes our general reluctance to sell poor performers (which, in most cases, lag because of industry factors rather than managerial shortcomings). Our approach is far from Darwinian, and many of you may disapprove of it. I can understand your position. However, we have made – and continue to make – a commitment to the sellers of businesses we buy that we will retain those businesses through thick and thin. So far, the dollar cost of that commitment has not been substantial and may well be offset by the goodwill it builds among prospective sellers looking for the right permanent home for their treasured business and loyal associates. These owners know that what they get with us can’t be delivered by others and that our commitments will be good for many decades to come.
Please understand, however, that Charlie and I are neither masochists nor Pollyannas. If either of the failings we set forth in Rule 11 is present – if the business will likely be a cash drain over the longer term, or if labor strife is endemic – we will take prompt and decisive action. Such a situation has happened only a couple of times in our 47-year history, and none of the businesses we now own is in straits requiring us to consider disposing of it."
All said it's just one more person's opinion. Time will tell.
