Buffett makes it pricey to fly to Omaha

As investors make plans to attend the event that Berkshires chairman,Warren Buffett,calls the Woodstock for capitalists,airlines,including Continental and Delta,have been raising prices for that weekend. Theyre asking four times the normal rate for round-trip tickets,meaning New Yorkers will pay more to visit Omaha for the May 1 meeting than London,Rome or Barcelona.

Continental has added one flight from the New York area on April 29 and three on April 30,said Mary Clark,a spokeswoman for the airline. Attendees who bought tickets earlier paid less for their seats,she said. Now,the company is demanding a premium for the spots that remain.

There does appear to have been high demand, Clark said. Since many of those fares have already been sold and there are very few seats left,the seats that are left are at the higher fares.

Last year,despite the threat of swine flu,a record 35,000 people flooded Omahas Eppley Airfield,packed the hotels and swarmed the city of 4,39,000. Three days of events this year start with a reception at the Berkshire-owned Borsheims jewellery store on April 30 and conclude with waves of diners at Gorats and Piccolo Petes,two eateries where Buffett pledged to appear on May 2.

Visitors to Paris that weekend could watch the May Day parade or see the Mona Lisa. Berkshire investors in Nebraska will listen to Buffett,the Oracle of Omaha,as he takes questions from the audience on investing,politics and the economy for more than six hours. Extracurricular visits could include Gerald Fords birthsite,the Freedom Park Navy Museum,and the worlds largest indoor desert.

Paris and London,all those cities are so boring, said Mohnish Pabrai,the founder of Pabrai Investment Funds,who has attended every meeting since 1998. Omaha is where all the action is. Why would you ever want to be in Paris on May 1? Nothing compares to Omaha.

Any event that draws additional demand from our customers is good for business, said Kent Landers,a spokesman for Delta. Whenever possible,we will add seats to make sure we can accommodate as many customers who choose to fly Delta as possible. Still,Delta hasnt added flights for the annual meeting because passengers can book trips that include stopovers in other cities,Landers said.

Rick Seaney,chief executive officer of Farecompare.com,said airline ticketing systems raise prices automatically based on the need for seats and employees can review the demand and increase prices further. If the company added flights,it would incur extra costs while driving down the cost of the tickets,he said.

Its probably easier for them to charge $1,200 or $1,500 for that round-trip than it is to bring another plane in and charge $600,because they end up making the same amount of money, Seaney said. When the computer detects that seats are selling out,it raises the price to the highest level of a price ladder, he said.

Last year,Berkshire shareholders flew to Omaha from across the US and about 40 foreign countries. If you sit down on the airplane,on both sides of you there are going to be Berkshire-holics next to you, said Pabrai,a Berkshire shareholder. The passengers headed to the meeting have their Berkshire Hathaway annual reports open as if they are cramming for an exam.

Buffett,79,built Berkshire into a $200 billion company over four decades by transforming a failing maker of mens suit linings into an enterprise with businesses ranging from ice cream and underwear to power plants and rail transport. The shares traded at about $15 when he took control in 1965; the Class A stock closed yesterday at $122,459.

Warren Buffett is a limited resource, said Guy Spier,a principal at Aquamarine Funds who has attended the annual meeting for about 15 years. Every year that goes by,his premium value goes up.

Spier,who will fly to Omaha from Zurich,said he typically depends on being a member of Hilton Hotels customer loyalty programme to book rooms when he travels,but the membership has little value during the Berkshire weekend.

By the end of the meeting we will be 100% sold-out for the next year, said Robert Watson,general manager of Hilton Omaha. The impact for Omaha is really incredible. Its a big deal for the surrounding businesses. Its probably a 30-40% increase for hospitality businesses around the surrounding community.

Watson said rates typically increase during major conventions and declined to say how much the hotel is charging during the Berkshire meeting.

Marriott Omaha charges $269 a night during the meeting,23% more than its normal rates,said Paul Tunakan,the hotels director of sales and marketing. We sell out for the next year four days after the event is over.

The entire hotel is a whos who all these hedge fund managers and well-known investors,authors, said Pabrai,whos staying at the Marriott. Just sit in the lobby for a couple of hours. Its like being at the Oscars.