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Let the WitchHuny Begin: "Wall St STILL Flying Corp Jets"--AP

Voice Of Reason

Reading Is Fundamental !
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Knew this was going to be coming for a while now--


"AP IMPACT: Wall Street still flying corporate jets

By STEVENSON JACOBS, AP Business Writer Stevenson Jacobs, Ap Business Writer 13 mins ago
NEW YORK – Crisscrossing the country in corporate jets may no longer fly in Detroit after car executives got a dressing down from Congress. But on Wall Street, the coveted executive perk has hardly been grounded.
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, according to an Associated Press review.
The jets serve as airborne offices, time-savers for executives for whom time is money — lots of money. And some firms are cutting back, either by selling the planes or leasing them.
Still, Wall Street's reliance of the rarified mode of travel has largely escaped the scorn poured on the Big Three automakers.
Insurance giant American International Group Inc., which has received about $150 billion in bailout money, has one of the largest fleets among bailout recipients, with seven planes, according to a review of Federal Aviation Administration records.
"Our aircraft are being used very sparingly right now," AIG spokesman Nicholas J. Ashooh said. "I'm not saying there's no use, but there's very minimal use."
To cut costs, AIG sold two jets earlier this year and is selling or canceling orders for four others.
Five other financial companies that got a combined $120 billion in government cash injections — Citigroup Inc., Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley — all own aircraft for executive travel, according to regulatory filings earlier this year and interviews.
A cross-country trip in a mid-sized jet costs about $20,000 for fuel. Maintenance, storage and pilot fees put the cost far higher.
Many U.S. companies are giving up the perk. The inventory of used private jets was up 52 percent as of September, according to recent JPMorgan data on the health of the private aircraft industry.
A few big U.S. companies have shunned jet ownership. Chip maker Intel Corp., for example, requires executives and employees to fly commercial. Intel occasionally charters jets for executives on overseas trips for security reasons, though.
For automakers, the public relations nightmare exploded last month when the chief executives of Ford, GM and Chrysler were criticized for flying on corporate jets to Washington to ask Congress for federal bailout money.
"Couldn't you all have downgraded to first class or jet-pooled, or something, to get here?" Rep. Gary Ackerman, D-N.Y., asked the CEOs.
When the executives went back to Capitol Hill two weeks later for a second round of hearings, they traveled by car.
So why were Wall Street executives spared from the corporate-jet backlash? One reason is that they didn't have to go before Congress to request bailout money, so no one asked how they traveled to Washington.
But an AP review of Securities and Exchange Commission filings and FAA records offers a glimpse of Wall Street firms' ownership and use of private aircraft. Among the findings:
• CITIGROUP: Has a wholly owned subsidiary, Citiflight Inc., that handles air travel for executives. Citi spokeswoman Shannon Bell refused to comment on the size of the firm's fleet but said it has been reduced by two-thirds over the past eight years. FAA records show four jets and a helicopter registered to the company.

In 2007, then-CEO Charles Prince used company aircraft for personal trips for security reasons. Those trips cost the company $170,972 for that year. Current CEO Vikram Pandit began reimbursing the company for all personal travel on company planes since being appointed in November 2007.
Use of Citigroup's aircraft currently is confined to a "limited number of executives," Bell said. "Executives are encouraged to fly commercial whenever possible to reduce expenses."
• MORGAN STANLEY: Has reduced its executive jet fleet size from three planes to two since 2005, company spokesman Mark Lake said. FAA records show two Gulfstream G-Vs as registered to the company.
In 2007, CEO John Mack's personal use of company aircraft totaled $355,882, according to a February proxy filing. Mack is required to use company aircraft for personal trips for security reasons.
• JPMORGAN: Registered as the owner of four Gulfstream jets, including a 2007 ultra-long range flagship G550 model, FAA records show. A G550 ordered for delivery that year would have cost roughly $47.5 million.
CEO Jamie Dimon is required to use company aircraft for personal trips; In 2007, his personal use of company jets totaled $211,182, according to a May filing with the SEC. Company spokesman Joe Evangelisti refused to comment on whether the bank has changed its policy on corporate aircraft use since accepting $25 billion in TARP money.
• BANK OF AMERICA: Registered as the owner of nine planes, including four Gulfstreams, FAA records show. Company spokesman Scott Silvestri refused to say whether the company has changed its policy on corporate aircraft use since taking $15 billion in bailout money.
CEO Kenneth Lewis, also required to use company aircraft for personal trips, racked up $127,643 in such travel last year, according to a March filing with the SEC.
• WELLS FARGO: Owns a single jet that "is strictly for business purposes under appropriate circumstances," spokeswoman Julia Tunis Bernard said. "No (government) funds will be used for corporate jet travel," she added.
SEC rules require publicly held companies to disclose executives' personal use of corporate aircraft. But there's "a lot of gray area" in how they do it, said David Yermack, a finance professor at the Stern School of Business at New York University who has studied the matter.
"If you use the plane for a personal trip but make one business call, should you report it?" he said. "Or if you're playing golf with potential business partners, does a company report that as business or personal?"
As mounting losses force companies to cut costs, some are becoming stingier about personal use of the company plane. Merrill Lynch & Co., for example, has banned such trips, according to company filings.
Experts say other companies that took bailout money will probably follow suit.
"The personal use of these planes is virtually indefensible at this point," said Patrick McGurn, special counsel at shareholder advisory firm RiskMetrics Group. "Once you're on the federal dole, the pressure is going to become immense on these firms to cut these costs."
Private jet manufacturers say the debate over executive travel has been overblown.
"What people don't understand is that business jets are mobile offices," said Robert N. Baugniet, Gulfstream's director of corporate communications. "If time has any value to you, then you'll understand why people use business jets."
He said the dustup hasn't hurt orders for new planes.
Still, some firms have avoided corporate jet ownership. Goldman Sachs Group, whose executives in past years have been among the highest-paid in the industry, has never owned its own aircraft since going public in 1999, spokesman Michael DuVally said.
The company does make private planes available to some executives through a fractional jet agreement, a timeshare-style arrangement, according to filings. Duvally refused to say how much the company spends on its fractional agreement.
Wary of being perceived as opulent, most companies fly in unmarked jets. Aviation buffs can usually track planes over the Internet using aircraft tail numbers. But many companies, including AIG and Citigroup, have blocked the public's ability to do so for security reasons.
Some corporate chieftains make no excuses for flying the private skies. After years of railing against such costs, billionaire investor and Berkshire Hathaway Inc. CEO Warren Buffet broke down in 1989 and bought a Gulfstream IV-SP using $9.7 million in company funds. He named the aircraft "The Indefensible."
Copyright © 2008 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press. "
 

Freedom

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A Boom for Fractional and Charter....

If anybody thinks these Execs are going to go back to flying Commercially, even in First Class, after experiencing travel via Corporate Jet, I've got a bridge to sell you.

I believe this will bring a TON of new business for NetJets.

Some of the better charter companies may also see benefits from such a move.

Pretty amazing when you think about it. Gigs that were once considered to be the very top of corporate flying are evaporating.

Just goes to prove, unless you have a highly reliable crystal ball, nothing in aviation is ever predictable.

Freedom is Not Free
 

SIG600

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Lets not talk at all about the politicians that fly around in private jets as well, yet flame all these CEO's.
 

Diesel

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also required to use company aircraft for personal trips, racked up $127,643 in such travel last year, according to a March filing with the SEC.

60hrs at 2k an hour. Jeeze that isn't much at all.
 

amaineiac

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After years of railing against such costs, billionaire investor and Berkshire Hathaway Inc. CEO Warren Buffet broke down in 1989 and bought a Gulfstream IV-SP using $9.7 million in company funds. He named the aircraft "The Indefensible."

Convenient how they forgot to mention that after Mr. Buffet used the jet for a while, he reamed it "The Indispensable"
 

Sandhawk

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A few big U.S. companies have shunned jet ownership. Chip maker Intel Corp., for example, requires executives and employees to fly commercial. Intel occasionally charters jets for executives on overseas trips for security reasons, though.

I guess Intel forgot to mention the 6 Embraer 135ERs and a single Beech 1900D they own that fly 5 days a week..........

:confused:
 

Diesel

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A few big U.S. companies have shunned jet ownership. Chip maker Intel Corp., for example, requires executives and employees to fly commercial. Intel occasionally charters jets for executives on overseas trips for security reasons, though.

I guess Intel forgot to mention the 6 Embraer 135ERs and a single Beech 1900D they own that fly 5 days a week..........

Thats what they call commercial. :)
 

mabelkitty

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Where are the fractional PR mouthpieces talking about how beneficial the industry is by providing jobs and providing a service the commercial industry can't deliver? Get your execs out there to tell your story before it is framed and told for you.
 

Hogprint

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Where are the fractional PR mouthpieces talking about how beneficial the industry is by providing jobs and providing a service the commercial industry can't deliver? Get your execs out there to tell your story before it is framed and told for you.

This story is mostly for the unwashed that read the US Coloring book and rags of the like. This is just eye wash/quasi aviation hit piece to make people think that "the man" is getting stuck finally in these hard economic times.

Rest assured our PR dep is getting the message to the RIGHT folks. Heck, Marquis sales haven't even dropped off.

If we're going to start taking steps backward, lets begin with all departments going back to typewriters instead of computers and instead of PDA's lets get back to sticky notes and pencils.
 

GooseHZ

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....

Free,

"I believe this will bring a TON of new business for NetJets."..

Not just NJ..... ALL fracs will get a boost from this.

Fly safe!
 

skiandsurf

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The economy is in the gutter. Pres Bush has an approval rating in the 20s%, congress lower in the 10s%, but Congress gives themselves a $4700/yr pay raise.

And they're worried about how these CEOs get around.
 

Pervis

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The economy is in the gutter. Pres Bush has an approval rating in the 20s%, congress lower in the 10s%, but Congress gives themselves a $4700/yr pay raise.

And they're worried about how these CEOs get around.

Yea. And if they save that raise for 5 years they'll be able to afford a one trip trip from BOS to TEB on a 400XP> Oooooooh.
 

doh

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Anyone who sells a card and has a decent product is going to see some growth in 25 and 50 hour cards. The boys are not going back to the airschytes. They have tasted freedom.:beer:
 

siucavflight

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I would like to see these corporations inform the public of how many of our Senators, and Congressmen have used their companies corporate jets.
I know where I am at there are a few of our elected officials in D.C. that accept use of our Gulfstream for getting around. And they just have to pay us back the cost of what an airline ticket would have cost them.
 

o2bflyn

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I would like to see these corporations inform the public of how many of our Senators, and Congressmen have used their companies corporate jets.
I know where I am at there are a few of our elected officials in D.C. that accept use of our Gulfstream for getting around. And they just have to pay us back the cost of what an airline ticket would have cost them.

Add on to that....I am sure that the Big Three have loaned their jets out to politicians in the past.....pretty ironic.
 

brokeflyer

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"we actully have a more efficent business model than the fractionals"

I about blew water out my nose laughin at that one. I think he's trying to turn charter into an airline, that outta turn out well considering his record at usair.
 

B19 Flyer

....
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Anyone who sells a card and has a decent product is going to see some growth in 25 and 50 hour cards. The boys are not going back to the airschytes. They have tasted freedom.:beer:

If they are purchasing shares to actually travel, this may be true. Many purchase for the tax benefits however, and those clients fly only when they really need to, writing off the rest as a business expense through depreciation. Those types of customers are bread and butter to fracs. As the economy worsens, the concept of spending money to make money will not be quite the same. Card purchases will be used by a smaller pct of clients, but new aircraft sales are what a fractional needs to sustain growth and economic viability.
 
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