Berkshire Highlights ‘Oligopoly’ of Aerospace in Letter to SEC

Berkshire Hathaway Inc., which bet on aerospace this year in one of Chairman Warren Buffett’s largest deals, offered a succinct description of the market for aircraft components: It’s an “oligopoly.”

Building aerospace and industrial gas turbine parts “requires a sizable investment in inventory, workforce, and property, plant, and equipment, and there are few competitors,” Berkshire Chief Financial Officer Marc Hamburg said in an Oct. 6 letter to the Securities and Exchange Commission that was released Nov. 21. “The aerospace industry is highly regulated and has unique certification requirements that create significant barriers to entry for new competitors.”

Hamburg’s letter responded ...