Maybe Warren Buffett should have stuck with railroads.

He once declared after an ill-fated bet on US Airways that he would resist any further urges to invest in airlines. But he ventured anyway into a high-end business that is an airline competitor of sorts — NetJets.

Right about now, he may wish that he had simply bought more of the railways he has accumulated over the years.

At NetJets, the returns have been disappointing — and lately the losses severe. Through his investment company, Berkshire Hathaway, he bought the private jet travel business, which caters to the affluent, for $725 million in 1998. Even though Berkshire does not provide detailed results for this small piece of its empire, insiders confirm that Buffett has yet to recover his investment.

With problems mounting at the unit — heavy losses and allegations of business improprieties — Buffett dispatched David Sokol to straighten out NetJets in July.

Sokol’s effort to turn the company around is being watched closely, in part because it provides a glimpse into the management style of a man considered a possible heir apparent to Buffett at Berkshire.

Sokol, who previously ran a utility company, has his work cut out for him. NetJets is a luxury business, but its revenue is shrinking, its management is in upheaval and its problems include accusations of improper workplace behavior.

While some former NetJets executives describe his management approach as overly aggressive, Sokol counters that he merely has “high expectations” for planning and execution, and conveys them to employees.

Sokol describes his mission succinctly. “We are instilling a culture of cost discipline and planning.” In an e-mail message to the staff, he wrote that he had never seen a company of NetJets’ size that operated “without an integrated business plan” and with a budget that was “often ignored.”

Within a week of his arrival in July, Richard Santulli, the founder and chief executive of NetJets, resigned. According to several people close to the company, Santulli was unhappy that a Berkshire executive was brought in to provide oversight.

Santulli, who declined to comment for this article, is widely considered a visionary for creating a time-share business model for air travel, and a number of current and former executives fondly describe how he treated employees as family, perhaps a shortcoming when the business turned sour and cuts were called for. Initially, Sokol, 53, had been looking into allegations of excess spending and a consultant who was paid by both NetJets and a supplier. Those issues had been described in several letters to Berkshire from company employees, although the company has not identified the writers.

In a recent phone interview, Sokol said he had “documented the issues and gotten them fixed.”

After Santulli resigned, Sokol became chairman and chief executive, this time with a mandate to rein in costs. That decision was interpreted as a strong Buffett endorsement of Sokol, who had no previous experience in airlines or luxury goods.

At MidAmerican Energy Holdings Co., Sokol turned a small energy company into a leading utility company supplying electricity and natural gas. From his post at the utility, now a subsidiary of Berkshire Hathaway, which acquired the company in 2000, he notably supported the idea of lowering greenhouse gas emissions but rejected a complicated cap and trade system to achieve the goal. The Iowa company, where he still serves as chairman, posted $13.9 billion in revenue last year.

But if Sokol is to succeed at NetJets, a company a fraction the size of MidAmerican, he needs to lower its costs while maintaining a luxury image.

Delivering a pleasant experience is crucial to the company’s marketing efforts. None other than Buffett has said so. A NetJets user, he has posed with his pal Bill Gates in NetJets ads and endorsed private jet travel as a life enhancer. By owning stakes in jets that they share with other owners, customers get private flights for far less than the cost of owning their own plane.

The recession has taken a toll on the business, though. NetJets lost $531 million in the first nine months of 2009, and revenue fell 42 percent from a year earlier, to $2 billion. And that was not its first loss. Although NetJets had pretax profits between 2006 and 2008 of more than $550 million, according to one person knowledgeable about the company who spoke only under condition of anonymity, its record has been spotty.

“I call it the Scooby-Doo profitability rationale,” said Robert Aboulafia, an aviation consultant with the Teal Group, a consulting firm. “They were always close to achieving profitability, but there was always one thing that stood in the way, and it was usually related to expansion.”