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Buffett makes inroads into China's business jet market
Last Updated: 2014-04-25 10:49 | ce.cn/agencies
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NetJets, a wholly-owned subsidiary of Warren Buffett's Berkshire Hathaway, recently announced that it is recruiting workers in China and will enter the Chinese business jet market soon after receiving a permit from Chinese monitoring authorities, according to Chinese-language online magazine China Entrepreneur Network.

This is not the first time Buffett has invested in the aviation industry.

In 1989, the American business magnate and investor funded US Airways (called USAir at the time) with US$358 million. The expensive investment, which lasted for eight years, did not generate considerable rewards.

The 2008 global economic crisis hammered the business jet market. Taking the sector's leading business Bombardier as an example, the volume of its aircraft delivery dropped from 245 planes in 2008 to 182 in 2011.

The slowdown, however, was a business opportunity in the eyes of Buffett, who is known for his "inverse operations" in investment activities.

NetJets purchased 275 middle-type aircraft from Bombardier for US$7.3 billion in 2012, with the delivery set to begin in 2014.

With the airplane fleet, the next step for the world's leading private aviation services provider is to find a market, which is naturally China - a rising economy far removed from the influence of the global economic storm, the China Entrepreneur Network said.

Shanghai Airport Authority vice chairman Wang Jije said people in China regarded business jets as a luxury product or a toy for rich people in the past. However, business jets play an important role in the promotion of commercial activities and the development of a city with complete urban functions.

"If big passenger airplanes in the civil aviation services are seen as public buses in a city, business jets are the taxis," Wang said.

NetJets CEO Jordan Hansell said that China's airplane management market has the potential to expand on a scale larger than the American market. With many Chinese businesses are willing to rent or share the ownership of a business jet with others, the "sharing property model" is expected to gain more traction in China than in the United States, Hansell said.

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