"Bizjet" perceptions

gismo

gismo

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This comment from someone (hopefully not a pilot) appeared on AvWeb today:

Bizjet Excesses


Your picture in the Jan. 29 issue of hundreds of bizjets at the last Super Bowl site demonstrates why the public and many GA pilots object to them. All too often they are used for non-business uses and, I suspect, written off as a business expense to avoid taxes.

Just check the Aspen and Eagle, Colorado airports. That's not business going on there — it's skiing. With teleconferencing now an easy way to communicate these days, business travel is becoming less and less necessary for the corporate biggies. Their excesses have gotten the USA into this economic mess, and now we who actually work hard for a dollar are saying, "Enough is enough!"

Gary Justus
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Now I can't say for certain, but I suspect that most if not all of the jet's Gary is referring to (at Tampa and the Ski resort airports) were flown on someone's personal nickel, not corporate funds. I suppose there might be some companies using their flight departments for junkets disguised as promotional ventures but I thought most of that kind of thing has become tough to sell to the IRS.


For those of you with corporate jet piloting experience, what is the likelihood that many of the jets flown into Tampa for the game were operated with corparate funds vs personal ones?
 
Marketing is a legit business purpose.

I see no difference between buying a current or potential business partner a meal while you talk business, or taking them to the superbowl in your bizjet while you talk business. As in any other marketing effort the question is simple. Does the result you're expecting justify the cost you're incurring?

I think that all corporations should turn off the bizjet services they provide to the congress and their staffs, too.
 
I would say pretty high. But so what? Does Mr. Gary Justus think Bruce Springsteen hitchhiked to Tampa or had NBC pay for a jet? If a company brings in a multimillion dollar customer in its plane, is that an "excess" or good business sense? Good grief, it's ok to spend $2 million on one ad.
 
Lance F said:
I would say pretty high. But so what? Does Mr. Gary Justus think Bruce Springsteen hitchhiked to Tampa or had NBC pay for a jet? If a company brings in a multimillion dollar customer in its plane, is that an "excess" or good business sense? Good grief, it's ok to spend $2 million on one ad.
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Yeah, I agree that using a jet as a business tool has many different aspects. I guess I was wondering how often "the boss" (not Bruce S) just commandeers the company jet for personal use.

As to the absolutely stupid notion that companies taking government handouts should sell off their business tools because a large number of folks think they are just expensive toys for the rich, I think that any regulation aimed at curbing wasted bailout money should be a bit less specific.
 
lancefisher said:
For those of you with corporate jet piloting experience, what is the likelihood that many of the jets flown into Tampa for the game were operated with corparate funds vs personal ones?
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I think we need to differentiate between private companies and public ones. The line between personal funds and corporate funds is a pretty hard line to draw with privately held companies, especially from the perspective of an outsider. Once a company goes public there is a lot more answering to do. I am not involved in nor do I think about the money trail very often, especially with the charter customers. The company whose airplane I am assigned to fly right now is very reponsible about its use, more so than I have seen with other companies but I think that is part of the company culture. They were that way even before all the brouhaha.
 
Interesting side-effect of this mentality:

I know of one publicly-traded company that had a flight department that consisted of two Citations. The company expanded by buying out smaller manufacturing companies and adding them to their product line. It just so happens that a lot of these small manufacturing companies were located in areas only served by small out-of-the-way airports within ~500 miles of the 'home base'. It turns out that the company would actually be best served by selling one of the Citations and investing in a King Air type of a/c for the shorter hops only carrying 4-6 pax. The company never followed through with this because, as profits began to narrow, any investment in the flight department would be deemed as a misuse of funds by shareholders, even though a reduction in operating costs would benefit them in the long run. Perception has a tendency to outweigh facts in the world of the ignorant.

As an extra side note to the story... The company has recently sold both Citations and is using a NetJets type of service for their corporate flying. Now the company owns two empty Citation-sized hangars at the local po-dunk airport. It just so happens that two of the CxO's in the company own private aircraft. These two individuals would be well served to be able to partner together and rent one of the hangars from the company. BUT, if two CxO's were to rent a hangar from the company for their private use - even if all ducks were in a row and it was perfectly legit - the public's perception would not be favorable. As such, the two CxO's are still putting their private a/c in cold, leaky tin-shed hangars while the company continues to pay for their oversized EMPTY hangars.
 
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lancefisher said:
Yeah, I agree that using a jet as a business tool has many different aspects. I guess I was wondering how often "the boss" (not Bruce S) just commandeers the company jet for personal use.
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IRS regulations are very specific about how the costs of personal flights or entertainment flights are to be accounted for, even going into the family relationships of pax to "control employees." It's a complex matrix of calculations that basically boil down to the fact that the cost of the flights is counted as income to the execs.
 
If the trip passes the accounting departments tax tests then the flight is a legitimate business expense. There are tax people on retainer that are consulted for any trips where the purpose even looks questionable. However, if the trip does not pass the test then the expense of the trip goes on the principal that is dispatching the flight. That means they personally have to pay all costs for the entire trip.
 
lancefisher said:
Yeah, I agree that using a jet as a business tool has many different aspects. I guess I was wondering how often "the boss" (not Bruce S) just commandeers the company jet for personal use....
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"The boss" may be prohibited from flying any other way than the comany jet by the board of directors. I know. Briar patch.

"The boss" does pay or recognize as income when the jet is used personally.

At the Super Bowl "the boss" and employees or clients are using the corporate box and tickets for promotional, PR, or marketing purposes. The NFL may very well give them tickets when they sponsor ads.
 
I've not understood why people object to the use of business jets and private planes. It seems to me that letter is well off the mark, at least as far as the opinion of most GA pilots (I can't speak for the general public, but I know most of the ones I come across are very positive about my flying and plane purchase). I would say that a number of us pilots may look at these planes with envy and wish that we could afford the kind of flying some of these people do. That's reasonable. No reason to be nasty and hateful about it.

I've had the good fortune to get to fly in some planes that I don't expect to ever be able to afford, and so I just am thankful that I get to ride in them as a passenger, and maybe one day will have the opportunity to fly them.

It seems to me that most of the time the people who respond so negatively to these things are just the folks who let jealousy get the better of them. It's much easier on the soul if you just look at the shiny planes and admire them for what they are. The positive sort of attitude is certainly much more likely to get you a ride or the opportunity to step inside and admire the plane some.
 
In another non-aviation forum the other day somebody was having a hissy about Executive use of corporate jets. Many people don't seem to understand that personal use of the corporate jet by executives is often part of the executive's negotiated compensation package. Example, the new CEO of a local fortune 200 company has either 12 or 13 flights per year to anywhere in the lower 48. This was disclosed to the share holders and general public.
 
I think it's because a lot of people don't think their own thoughts- they recycle what the media feeds them. They only know that on TV and in movies, GA jets are a symbol of wretched excess and huge ego... a "blingy" lifestyle accessory. Only heartless plutocrats and super-criminals have them on TV and in movies.

Although sometimes the regular-guy hero gets to use or own one, as part of some come-uppance. :D

These people probably also have no idea that there are airports other than the Class Bs. They often move into houses under the pattern of regional or municipal airports that have been there since before they were born, then are shocked to discover all these crazy rich "amateur" pilots buzzing their house constantly...:D
 
I wonder when it became so widespread. I remember as a kid reading about rich people and wanting to be one, but not blaming them that we were poor.

I keep thinking back to "The American President", and that line about politicians not being interested in solving your problems - it's all about making you afraid of something, and telling you someone else is to blame for it. That goes for power-seekers of all types, in my book.
 
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You know, a company can do whatever it wants with its money. Its decisions my be wise or they may be foolish. It may flourish, or it may fail. All fair play. But when that company starts begging for MY MONEY it had better start thinking about perceptions, and does it really NEED luxury bizjets, billion dollar bonuses, junkets to Las Vegas, etc.

I'm not jealous of rich people. I'm freaking pi$$ed off as all get out because they've wrecked the country with their naked greed and are now sucking madly at the public teat, all the while behaving like dollar drugged teenagers on a weekend binge courtesy of Dad's credit card.
 
steingar said:
You know, a company can do whatever it wants with its money. Its decisions my be wise or they may be foolish. It may flourish, or it may fail. All fair play. But when that company starts begging for MY MONEY it had better start thinking about perceptions, and does it really NEED luxury bizjets, billion dollar bonuses, junkets to Las Vegas, etc.

I'm not jealous of rich people. I'm freaking pi$$ed off as all get out because they've wrecked the country with their naked greed and are now sucking madly at the public teat, all the while behaving like dollar drugged teenagers on a weekend binge courtesy of Dad's credit card.
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Eh, ther are a whole lot of not so rich types overextending their credit cards, buying into mortgages they knew they couldn't afford, and buying SUVs that they can't afford the gas for that helped out. Plenty of blame to go around.
 
true, but so far at least none of them are getting tax dollars. And even though some are supposed to be getting tax dollars indirectly in the form of refinancing and renegotiation of their loans, it's not happening the way it was expected.
 
steingar said:
You know, a company can do whatever it wants with its money. Its decisions my be wise or they may be foolish. It may flourish, or it may fail. All fair play. But when that company starts begging for MY MONEY it had better start thinking about perceptions, and does it really NEED luxury bizjets, billion dollar bonuses, junkets to Las Vegas, etc.

I'm not jealous of rich people. I'm freaking pi$$ed off as all get out because they've wrecked the country with their naked greed and are now sucking madly at the public teat, all the while behaving like dollar drugged teenagers on a weekend binge courtesy of Dad's credit card.
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Im pretty sure the PotUS has the nations most expensive "corporate jet" And we all are paying for it.

If, as a taxpayer, im going to invest in a publicly held company, then in my opinion, the CEO of the compnay ought to be able to do his job, and if they need to fly somewhere to do it, so be it. But i guess thats just me.
 
steingar said:
But when that company starts begging for MY MONEY it had better start thinking about perceptions, and does it really NEED luxury bizjets, billion dollar bonuses, junkets to Las Vegas, etc.
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Here's the latest example of company tone-deafness. I think the article is pretty balanced, but if anyone thinks that wealth envy does not exist they should read the many comments. I don't think I've ever seen an article with so many comments. I'm interested if anyone here is less quick to defend Wells Fargo because the subject is not airplanes and they don't feel the need to protect the aviation business.

Edit: I just realized this might be getting close to SZ material, but I'm curious how much of our defensiveness about the bizjet issue comes from the fact that we are pilots.
 
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Everskyward said:
Here's the latest example of company tone-deafness. I think the article is pretty balanced, but if anyone thinks that wealth envy does not exist they should read the many comments. I don't think I've ever seen an article with so many comments. I'm interested if anyone here is less quick to defend Wells Fargo because the subject is not airplanes and they don't feel the need to protect the aviation business.

Edit: I just realized this might be getting close to SZ material, but I'm curious how much of our defensiveness about the bizjet issue comes from the fact that we are pilots.
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Interesting question, Mari.
I'm trying to see the business interests that are served by that sort of get-together, and comparing them with the business interests served by GA.
They both serve as incentive to the employee.
They both imbue a sense of self-worth or importance.
They both reward the employee for past work.
Only GA helps with confidentiality.
Only GA is helping make deals.
Only GA is providing transportation close to where the deals need to be made.

Not saying that providing perqs to the top salespeople doesn't have some business benefit, but when your competitors are in the same financial boat that you are, and everyone should be trying to minimize unnecessary expenses, I find it a little hard to defend an expensive junket. It's not like company A is serving chopped liver and company B is serving filet mignon!

Hold the event in the same city as headquarters to cut down on travel. Hire a local band, not a national headliner. I remember one company I worked for, the Christmas bonus was a canned ham! Yes, when times were flush, the companies feted their key employees. And when the times were lean, those same companies were bought out and ultimately declared bankruptancy. Good employees realize that their benefits are controlled by the health of the company, and good companies treat their key employees well when they can afford to. If they need to come to the public trough for financing, then they can't afford to.
 
Everskyward said:
I'm curious how much of our defensiveness about the bizjet issue comes from the fact that we are pilots.
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I think the answer is, Alot. Knowledge comes from experience and pilots understand that "time savings" component of flying. Then again, sometimes driving is a better option but more than the avg person, pilots realize flying to be a viable option.

I love to explain how I could fly to some place in a fraction of the time it would take them to drive and I would arrive in comfort and not stressed. I love to see their faces as the light comes on, when they think they too could enjoy the same benefits. I've won over a few converts who now having experienced flying on even short hauls would hardly again consider driving. Arriving refreshed and with so much time now freed from the constraint of transport is a huge benefit.
 
steingar said:
I've always gone by the old adage if you're in a hurry, drive.
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You fly a Cherokee and don't have an instrument rating. That's not exactly air travel at its most rapid or reliable (reliable as defined by ability to plan and complete a trip without diversions). Especially in the winter, where even with an instrument rating there are a lot of times when you can't (or don't want to) go IFR.

I've done trips (even in the Archer) that simply would not have been possible by car due to time constraints. Going to 6Y9 would not have been doable for me by car. Even by commercial airline it's doubtful due to Williamsport not being a major hub of commercial air travel. Going to Tony's party in the Mooney might have been doable by commercial air (especially since I started from New York City), but certainly not by car.

That said, I drive to NYC because it takes the same amount of time as flying and costs a lot less.

It all depends on your start and end points, what you fly, and what your personal capabilities are.

When you get into business jet category of aircraft, the "If you're in a hurry, drive" adage is dead wrong.
 
Richard said:
I love to see their faces as the light comes on, when they think they too could enjoy the same benefits. I've won over a few converts who now having experienced flying on even short hauls would hardly again consider driving.
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I've heard it from many first-time passengers whose alternative is usually airlines, not driving. However, most of these people are not paying the bill personally. They are traveling on their company's or their friend's dime. I wonder how many would be able to justify the expense if they were shelling out for it themselves.
 
I understand the problems with public companies or those now public due to Government takeover...those aside...

For private companies, why the heck should ANYONE care if they fly or pave the road with gold and flowers before them?

If a company wastes money, they will go out of business.

If not, they won't.

Isn't that how it's supposed to work?
 
Everskyward said:
I wonder how many would be able to justify the expense if they were shelling out for it themselves.
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Well, most of us don't fly around in our own personal Citations, or even King Airs, so it would seem that for personal use the answer is no, we can't justify the expense. At a business level, though, the dollar figures change dramatically, because the value of your time is measured in what it costs the company, not how valuable you personally are.
 
Ted DuPuis said:
You fly a Cherokee and don't have an instrument rating. That's not exactly air travel at its most rapid or reliable (reliable as defined by ability to plan and complete a trip without diversions). Especially in the winter, where even with an instrument rating there are a lot of times when you can't (or don't want to) go IFR.

I've done trips (even in the Archer) that simply would not have been possible by car due to time constraints. Going to 6Y9 would not have been doable for me by car. Even by commercial airline it's doubtful due to Williamsport not being a major hub of commercial air travel. Going to Tony's party in the Mooney might have been doable by commercial air (especially since I started from New York City), but certainly not by car.
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I fly back and forth to Florida from Minnesota two or three times each year. Given all the stuff I usually bring along, flying commercially isn't a viable alternative (it takes about as long to) and driving like some of my friends do takes at least two days if you're not willing to drive for about 25 hrs straight. Even doing it in two days is pretty brutal. Flying myself takes a total of 8-9 hrs with 6.5-7.5 hrs in the air. That's a huge improvement[/quote]

That said, I drive to NYC because it takes the same amount of time as flying and costs a lot less.
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I've flown several trips that could be completed in the same or less time by car because flying is more fun (most of the time).
 
My point is relatively simple. A private jet is about the most expensive way to travel imaginable, unless you start talking about the space shuttle. If I take my airplane somewhere I realize that I am not taking it to save money, I am taking it so I can fly. There have been a couple trips where it was actually cost effective, but only a couple. But that's fine. Its my money, and if I want to spend more so I can fly myself its my business. When someone has their hand out and is spending taxpayer money they shouldn't do the most expensive thing. Why is the time of all these CEOs worth so much? So they can loose more money?
 
You still have economies of scale. a private jet for one person - yes, very expensive. operating a jet for a full load - less expensive.

You can have situations where the ability to "be right there" means you win a contract where the profit off the contract is more than the total cost of the jet. The ability to have your sales team put the final polish on their pitch enroute to the customer rather than have to sit with the public (where they can't review company sensitive data) can be the difference between winning and losing.

No company operates a flight department or charters a jet unless they believe it to be a worthwhile expense. We can argue about the judgment of the folks making these decisions all day long.
 
steingar said:
My point is relatively simple. A private jet is about the most expensive way to travel imaginable, unless you start talking about the space shuttle. If I take my airplane somewhere I realize that I am not taking it to save money, I am taking it so I can fly. There have been a couple trips where it was actually cost effective, but only a couple. But that's fine. Its my money, and if I want to spend more so I can fly myself its my business. When someone has their hand out and is spending taxpayer money they shouldn't do the most expensive thing. Why is the time of all these CEOs worth so much? So they can loose more money?
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That's a blanket statement that isn't always true.

One time we were considering a biz jet from Millville, NJ to Orlando FL. We had a large contigent from the office going to a trade show and we would have saved money over flying commercial (purchasing tickets in advance). We also would have saved time (3 hours minimum) by avoiding the drive to PHL and the TSA lines. We didn't charter the jet only because of the perception to the parent company.

From Lincoln, NE to almost anywhere (exceptions are Denver, Chicago, and Minneapolis)- you need to connect someplace (through one of those afore mentioned cities). Depending on the distance, even a small plane can match the airlines on time without the TSA hassles and the convenience of working on your own schedule. I fly with my wife- we aren't more expensive than two airline tickets bought ahead of time. Last minute ticket prices- we are way ahead.

Business jets are appropriate in many circumstances if you have more than one person traveling, plans subject to change, and trips made on short notice.
 
Not so much that a financial firm busily loosing money needs one on its beck and call at all times. Like I said, they'd probably be doing themselves a favor by driving so the CEOs can't spend as much time loosing money.
 
Everskyward said:
I've heard it from many first-time passengers whose alternative is usually airlines, not driving. However, most of these people are not paying the bill personally. They are traveling on their company's or their friend's dime. I wonder how many would be able to justify the expense if they were shelling out for it themselves.
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Those shelling out the coin from their own pocket were exactly who I had in mind when I wrote what I wrote. Arriving in less time and in better composure is worth a lot.
 
steingar said:
Not so much that a financial firm busily loosing money needs one on its beck and call at all times. Like I said, they'd probably be doing themselves a favor by driving so the CEOs can't spend as much time loosing money.
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If the CEOs are so ineffective at their jobs that they're best off locked in a room where they can't do any more damage, then you have another problem that needs to be addressed independently.
 
Richard said:
Those shelling out the coin from their own pocket were exactly who I had in mind when I wrote what I wrote. Arriving in less time and in better composure is worth a lot.
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To some people...

Funny you should post this now. I just found out my airline flight was canceled. I had a choice of going on another airline an hour late or sticking with the same airline, going 6 hours late, and getting a $150 voucher. I chose the voucher. It's not like I need the $150 but I can kill time here at the airport as well as I can kill time at home. After all, I have POA! :)

Don't get me wrong. I can understand why some people feel the need to be there now, depending on the situation. If I was going to miss work or something I would've taken the earlier flight. I also know how easy business jet travel can be, especially for the passengers and I know many people can justify the expense, not just businesspeople. But I'm pretty cheap, especially when it comes to my own convenience. I've never been able to justify buying an airplane for travel. If I had one, it would just be a toy.
 
I just don't have the initiative to jump into this thread (but I sure have opinions).
 
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