KEY POINTS:
Roll up, roll up. It is the great company-jet fire sale. Everything must go - and quickly. For the credit-crunched giants of corporate America, living on the generosity of the taxpayer, it ill behoves executives to fly luxury class, and a string of expensive aircraft are finding their
way on to the market.
The bosses of the big three Detroit carmakers were making a self-flagellating road trip yesterday from Motor City to Washington, where they will plead today for a US$34 billion (NZD$64 billion) Government handout, a fortnight after being ridiculed for turning up at their last meeting on US$20,000-a-flight corporate jets.
And Citigroup, which just 10 days ago palmed off up to US$306 billion in potential losses onto the US Government, was reported to be selling two of its fleet of aircraft.
The sales threaten an era of penury for a cadre of executives who are used to flying on the company jet not just for business trips but also on holiday. For the American public, bitter at forking out more than US$1 trillion so far during the credit crisis to bail out Wall St banks and other companies, it offers one small signal that boom-time corporate excess is being curbed.
A small Maryland broker is hawking two Dassault Falcon jets understood to belong to Citigroup, the banking giant brought to the brink of bankruptcy last month by billions of dollars of losses on sub-prime mortgages. The Government has already put in US$45 billion from the bailout fund and promised more.
Meanwhile, the brochures open a window on the luxury on offer to travelling executives, showing the plush, carpeted interiors with space for 12 passengers, split into three cabins.
The company is only slimming down its fleet, not selling all its planes, and although it is cagey about how many it will be left with, it justifies their use even as it promises to be careful with them in future.
"Executives are encouraged to fly commercial whenever possible to reduce expenses," a spokesman said. "Over the past eight years and to support this objective, Citi has reduced its number of aircraft by two-thirds."
Corporate jets have long been a source of public relations trouble for the executive class, particularly during economic downturns or when the company runs into trouble. Citigroup's former wealth management division boss Todd Thomson was forced to quit after complaints about his profligate use of company expenses, including one occasion when he kicked fellow executives off the company jet to travel alone with CNBC television presenter Maria Bartiromo, nicknamed the Money Honey.
Their use can also land an executive in court, as jailed former Daily Telegraph proprietor Conrad Black found. Accused of using his Hollinger media empire as a personal piggybank, to the detriment of fellow shareholders, Black was charged with fraud for using 23 hours of flight time on the company jet, at a cost of US$539,000, to go on a holiday with his wife to Tahiti in 2001. (It was not one of the charges he was convicted on, however.)
Ed Bolen, president of the National Business Aviation Association in the US, says people do not fully appreciate the security reasons that justify a company jet. Many companies, fearful of kidnapping, tell top executives not to always drive the same route home. And there is the problem of industrial espionage, he adds.
"People carrying corporate paperwork and travelling through public places always have to ask: Who is capable of swiping a bag, who is reading over my shoulder?"
Plane speaking: Just how the other half fly ...
Roman Abramovich
Boeing 767 (33 seats) A Boeing 767 normally holds 180 passengers, but his costs about 56 million ($156 million) and is not for plebs. He has spent millions more customising it; under the sleek external paint job is an interior of walnut, mahogany and gold, with plasma screens and plush bathrooms.
Donald Trump
Boeing 727 (23 seats) His 1968-vintage Boeing 727-100-series has been altered to hold 23 in luxury:
leather armchairs, gold-plated seatbelt buckles, oil paintings and crystal lamps. The "Trump" logo on the craft's side is 9m and made of 23-carat gold leaf. The plane is valued at about US$50 million ($94 million).
The Sultan of Brunei
Boeing 747 (430 seats) Costing US$100 million, his jet has been fitted with washbasins of solid gold and Lalique crystal at an additional cost of US$120 million. The 747-400 is his largest aircraft. He owns two Airbus A340s and a 767.
Tom Cruise
Dubbed "emissions impossible", the Top Gun star, a licensed pilot, owns three jets - including a recent 10 million purchase for his wife, Katie Holmes. He owns five planes, including a US$14 million Lear Jet. There's a story, not denied by Cruise, that he sent a jet to pick up groceries for Katie - at least the veg was organic.
- INDEPENDENT
