When NetJets started seeing increasing service to Europe recently, they realized that there were just some airports that were not so accessible. Frankfurt was a big problem for them, and they have a lot of customers who want to go there. So they just bought an airport in the Frankfurt area, Eglesbach. The airport is a tiny private field, with the longest runway of only 4600 feet, so it isn’t going to be pulling in lots of big planes anytime soon, but it is only ~10 miles or so from Frankfurt-Main (FRA), so it is really rather convenient for their customers.
“When our customers want to go there, we have a success rate of perhaps 30-40 percent of getting access to Frankfurt,” forcing NetJets to fly to Frankfurt-Hahn airport about 100 kilometers to the west, Kelly said. The Egelsbach purchase will allow better connections to the city of Frankfurt, which is home to “lots of high-net-worth individuals,” he said. The transaction is a “huge opportunity to grow our German market.”
Egelsbach airport doesn’t serve scheduled airlines. Its vendors had to invest about 500,000 euros last year to keep the unprofitable operation in business.
“We don’t expect to be profitable at the airport until 2015- 2016,” Kelly said. Making the airport profitable “is not our No. 1 priority,” as the main goal is to “get more customers into NetJets.”
The economics seem pretty insane to me, but I guess they make sense to someone. And Warren Buffett is generally not a moron financially, so I guess it is a good deal for them.
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