Reply #27: It's not that at all... [View All]

[bdab1973]

Most medium and large corporations have corporate aircraft. They have them because it makes business sense to operate them. It's not just CEOs that travel on these aircraft, they are also used as "corporate shuttles", ferrying mid-level and sometimes lower-level management to meetings and appointments. Once you look at the scale of travel that most corporations engage in, it actually makes more sense to OWN an aircraft than to pay for airline tickets. Not only is it cheaper in the long run, but it's also much more flexible, allowing you to fly to locations that often aren't served by airlines, or fly into airports that are closer to a meeting site than a commercial air carrier will get you.

Often times if corporations rely soley on airlines, not only do they wind up paying more (essentially you're paying an airline to carry you for a profit...it makes sense if you're traveling in small numbers, but you wind up forking over lots of cash to airlines if you perform a lot of travel), but they also wind up having to fly into an airport, rent a car and drive the rest of the way.

Often corporate aviation is looked at through the stereotypical lens of celebrities and other famous people that really don't need a jet for their own personal transportation, but larger (and even smaller) corporations do well if they have an airplane they can use. I flew Learjets for three years (for the military) and I was around corporate aviation quite a bit, and I was surprised to often see an airplane pull up at the airport and unload about a dozen mid-level management types to go hammer out a business deal...and we were often at small airports where the nearest airline destination was several hours away by car. It would have probably cost thousands to buy tickets to some podunk airline destination, then rent several vehicles for the day, and since it would take so long, then you're talking about hotels, per diem, etc. All in all, had those folks flown on an airline, it would have cost more and would have taken more time (less productivity) and hassle. Instead they arrived at BFE airport in a couple hours after showing up for work, prepared and ready to do their meeting, then return home that afternoon, and the airplane's cost of fuel and operating expenses would be around the same or less than the cost of commercial travel arrangements.

I agree that many large corporations are NOT being managed well, and are being sold down the river by greedy execs. But operating a business jet or two isn't going to be the thing that kills a corporation. Most of these companies are BILLIONS in the red, and a typical biz jet costs a few million and takes a few million more a year to operate. Compare that with buying airline tickets, car rental and other travel arrangements for hundreds of employees each month, and the costs are fairly equal, minus the flexibility a biz jet gives you. But my point is, mentioning these jets is just grand-standing on the part of Congress, who often fly in military and civilian chartered aircraft ALL THE TIME (and last I checked, our country is TRILLIONS in the red). The jets really are just a tiny drop in the ocean, and it doesn't really matter if Ford sells it's biz jet fleet, it won't suddenly make them profitable. If anything, it'll be a loss, because they'll lose value on the jets, and they will still have to finance travel for their personnel to attend business meetings and deals, visit production facilities and other things that have to be accomplished.