The corporate jet was always a sign that fat cat CEOs were getting special treatment. Some companies even let management fly to vacation spots. Others said their CEOs were at risk for being kidnapped or tarred and feathered. The private plane is a way to avoid that.
Ever since the chiefs of The Big Three flew to Washington, the image of company jets has gotten worse. Why waste shareholder money when executive can fly commercial?
According to the AP, "Six financial firms that received billions in bailout dollars still own and operate fleets of jets to carry executives to company events and sometimes personal trips." That does look pretty bad, but is it?
A new Gulfstream jet, the Rolls Royce of private aircraft, costs around $50 million. That is if there are not gold plated bathroom fixtures. Operating the plane for longer trips costs tens of thousand of dollars–fuel, pilots, the stewardess who eventually marries the CEO.
But, selling corporate jets may actually be worse for shareholders than holding on to them. The market for expensive planes is going away as Middle East and Russian billionaires lose money on falling oil and the extraordinarily rich find most of their Madoff money gone.
Keep the jet or sell it for a $30 million loss?
Keep the jet.
Douglas A. McIntyre