Impact of recession on bizjet utilisation
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Biz Av
So you don't think the people in back feel like they're paying for it directly and hence their behavior? That's actually a pretty damned interesting thought.
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Hi
You know that French private corporate jet worth $50 million that Citibank said it must buy cos they committed to it many years ago? And which is to be paid with our $45 billion in bail out money?
Well, Barack told Citi to "fix it' and Citi had to dump the plan.
gee.. this Barack guy must mean business.
I don't know how he will be able to fight Congress on the new fiscal plan he has but wow.. he means business huh ? 
Regards.
You know that French private corporate jet worth $50 million that Citibank said it must buy cos they committed to it many years ago? And which is to be paid with our $45 billion in bail out money?
Well, Barack told Citi to "fix it' and Citi had to dump the plan.
gee.. this Barack guy must mean business.
I don't know how he will be able to fight Congress on the new fiscal plan he has but wow.. he means business huh ? Regards.
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You can thank the greedy , self rightous , self important , self serving , megalomaniac Capitalists on Wall St. and throughout Corporate America for the upcoming jump off the cliff that WAS Biz AV in the USA.
The days of Corporate greed , profit at any cost , growth through acquisition , hostile takeover , etc. days are over , and good riddance. Share price , P/E Ratios , Dividends , CEO pay 1000 times that of the average worker , well ... you people brought this all on yourselves.
We ( the rest of the world ) have been saved from the next big " War " , simply because as a result of this ( "ahem" ) CRISIS , you can`t bomb yourselves , now can you ???
The days of Corporate greed , profit at any cost , growth through acquisition , hostile takeover , etc. days are over , and good riddance. Share price , P/E Ratios , Dividends , CEO pay 1000 times that of the average worker , well ... you people brought this all on yourselves.
We ( the rest of the world ) have been saved from the next big " War " , simply because as a result of this ( "ahem" ) CRISIS , you can`t bomb yourselves , now can you ???
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6000PIC:
The US is a heck of a lot more frugal than the rest of the world when it comes to business aviation. The US has become a secondary market in the last decade when it comes to selling airplanes, the Europeans, Russians, Middle Easterners and Asians have taken over.
Maybe this had more to do with the Russians bombing Georgia????
The US is a heck of a lot more frugal than the rest of the world when it comes to business aviation. The US has become a secondary market in the last decade when it comes to selling airplanes, the Europeans, Russians, Middle Easterners and Asians have taken over.
Maybe this had more to do with the Russians bombing Georgia????
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Getting back to Jetwhine's question regarding the secrecy culture of business aviation, I think it is important to be educated in what Biz Av brings to the table.
Trying to explain the rationale of using a business aircraft to the layman means the users must understand it themselves. The CEO's of the automakers did not respond to the questions about those aircraft by explaining the inefficiency of using scheduled service, or the work that can be done privately during the en route portion of the flight. They did not say that towns where products are manufactured sometimes do not have airline service, nor did they say security and worldwide travel require these jets. THEY SAID "NO COMMENT", then promptly closed the departments.
This only made it look like we in corporate aviation are actually exploiting the businesses by buying these jets. Sure there are circumstances that are an abuse to the investors and public trust and that is what is focused on by the press. The President flies around on the biggest private jet in the country for the same reason executives do. Why doesn't Obama fly on US Air next time he needs to visit a foriegn country? The USA is certainly in worst shape financially than any of these companies that Obama is critisizing.
Trying to explain the rationale of using a business aircraft to the layman means the users must understand it themselves. The CEO's of the automakers did not respond to the questions about those aircraft by explaining the inefficiency of using scheduled service, or the work that can be done privately during the en route portion of the flight. They did not say that towns where products are manufactured sometimes do not have airline service, nor did they say security and worldwide travel require these jets. THEY SAID "NO COMMENT", then promptly closed the departments.
This only made it look like we in corporate aviation are actually exploiting the businesses by buying these jets. Sure there are circumstances that are an abuse to the investors and public trust and that is what is focused on by the press. The President flies around on the biggest private jet in the country for the same reason executives do. Why doesn't Obama fly on US Air next time he needs to visit a foriegn country? The USA is certainly in worst shape financially than any of these companies that Obama is critisizing.
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The US is a heck of a lot more frugal than the rest of the world when it comes to business aviation. The US has become a secondary market in the last decade when it comes to selling airplanes, the Europeans, Russians, Middle Easterners and Asians have taken over.
With a few exceptions, American companies that own corporate airplanes actually need them, from a cost/benefit point of view.
As I was, at one time, a corporate aviation department manager some years ago, we did a detailed analysis, and found that the corporate aeronautical barge actually made a profit.
Surprise, surprise.
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You know that French private corporate jet worth $50 million that Citibank said it must buy cos they committed to it many years ago? And which is to be paid with our $45 billion in bail out money?
The 'French private corporate jet' is a Dassault Falcon 7X that cost $47 million USD, not 50. If you don't think that $3,000,000.00 USD is not worth counting fine, why don't you give me 3 millions bucks and I'll let the matter drop.
As I have purchased three Dassault Falcons brand new from the factory, not me personally, but companies I was the chief pilot for, let me inform you on how one pays for these new aircraft. You don't pick up the phone and call Dassault or Gulfstream and say, "Send me one of them there new jet planes and I'll send you a check." (Well at least up to five months ago you couldn't, a little different now.) No, up front, at least 4 years before this Falcon 7X was built you pay at least a 10% down payment. Then when your aircraft starts to be built you pay at least 20% of the cost of the aircraft. By the time your aircraft is ready to be delivered you will have paid at least 60 to 70% of the total price of the aircraft.
This is the case of the Citi Group Falcon 7X. They had already paid for 60 to 70% of the 47 million USD the aircraft cost, before the so called bail out money.
So now, because of the stupid media, stupid attention hungry whore politicians and others in aviation who should know better it will end up costing the US Tax Payer more money for Citi Group to turn the aircraft back to Dassault.
Why, because the corporate aircraft market is in the cellar. The only way Citi Group will get their money back is if Dassault finds a buyer for the full asking price, which is very doubtful today.
For those of you here that don't believe that companies and individuals should not be allowed to own private jet aircraft, move to Cuba or North Korea.
6000PIC
Quite right, DA50driver. All the OEMs have been selling something north of 60% of their planes outside of the US for the last 3 years. Sales in the US market have been difficult due to SARBOX, inflated prices, and long backlogs. Any company, forced to unload a jet in today's market, will take, at least, a 30%-40% price hit on the sale. As C-P said, the taxpayers will foot the bill for canceling the deal, pay for company officers to sit in airline terminals unproductively and pay for the people put out of work at the company and at the OEM and its suppliers. Let's not forget the domestic content on these planes is about 50% US, even at Dassault. Pretty poor financial deal there!
C-P, evidently, Dassault is less aggressive on progress payments than some OEMs.
Now, is a good time to "move up" a delivery, if prepared to pay. Unfortunately, I know several guys out of work due to the layoffs at Citigroup. I guess unemployment of pilots, mechanics and everyone everywhere in the aviation community is not a concern for our government and its handmaidens, the media.
Having been in a number of Presidential airlift missions for Clinton and Bush and looking at the costs of Presidential travel, not to mention Ms. Pelosi's demands for Air Force travel via B757, it is a bit rich of them to complain about business use of jets. The estimate for Bill Clinton's trip to Australia was in the range of $100 million. The India trip must have exceeded that. I won't go into the costs of CODELs flying congressional junkets.
GF
the Europeans, Russians, Middle Easterners and Asians have taken over.
C-P, evidently, Dassault is less aggressive on progress payments than some OEMs.
Now, is a good time to "move up" a delivery, if prepared to pay. Unfortunately, I know several guys out of work due to the layoffs at Citigroup. I guess unemployment of pilots, mechanics and everyone everywhere in the aviation community is not a concern for our government and its handmaidens, the media.Having been in a number of Presidential airlift missions for Clinton and Bush and looking at the costs of Presidential travel, not to mention Ms. Pelosi's demands for Air Force travel via B757, it is a bit rich of them to complain about business use of jets. The estimate for Bill Clinton's trip to Australia was in the range of $100 million. The India trip must have exceeded that. I won't go into the costs of CODELs flying congressional junkets.
GF
Last edited by galaxy flyer; 1st Feb 2009 at 03:03.
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Tri-Motor
Citigroup has big offices all over the world. . Did the Falcon's third motor have anything to do with its selection over a G-V or Bombardier?
There were possibly other financial entanglements between Citi and Dassault that affected the decision.
Legislation is being introduced to limit executive pay in any company receiving US government aid to $400K, the same as the President of the US. It should have been done sooner, but Bu$h would never have approved it. This will have the side benefit of limiting the number of companies asking for aid, as it will hit the fat wallets of the fat cats.
GB
There were possibly other financial entanglements between Citi and Dassault that affected the decision.
Legislation is being introduced to limit executive pay in any company receiving US government aid to $400K, the same as the President of the US. It should have been done sooner, but Bu$h would never have approved it. This will have the side benefit of limiting the number of companies asking for aid, as it will hit the fat wallets of the fat cats.
GB
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I once asked a senior executive of a Canadian telecoms company, once joked as being the 'Canadian Airforce' for the size of their fleet, why they needed corporate jets.
The answer was short, and to the point. You can't have two CEO's, their time (excluding the cost of their salaries) is limited, and needed to be efficient. If you look at the Travel itinerary's of many of these folk, they would get a 1/4* at best of the travel they get in with commercial aviation. (Excluding the fact that they can get business done, or suitable rest, in private aircraft)
For Obama (PBUH) to tell Citi to cancel their aircraft order (let alone for the valid reasons pointed out by con-pilot), is a bit rich when he feels he needs 23 helicopters, to fly in 3 x USD 600m helicopters at a time, and have a fleet waiting for him at each location, let alone the rest of the Presidential flight detail excess.
So much so I have written to my Senator. (And I would encourage the rest of you who reside in the US, to do so too).
Citi is a Global company, and there are valid reasons for them to have their own aircraft... probably more now than ever, where executives need to rally the troupes and run their Global offices.
I think the transparency issues come when these executives use these aircraft on personal trips, paid for or subsidized by the company, which is often the case.
Con's other point about Nanci Pelosi is another classic. Aside from the controvesy over the aircraft choice, and the ridiculous notion of 'her security' during a refuel whilst her weekly start and end points are well known, why she needs to fly to California ever week-end when her job is in Washington, is beyond.
There is so much missing the forest for the tree's going on it's ridiculous, but no one is going to do anything about it, lest the politicians start bringing some common sense into the equation, but we know that will never happened
In summary, I agree with the original point, and unfortunately we live in a world where politicians are never incentivized to look at the micro picture, in the context of the macro picture, and without using cheap shots to promote their self-fulfilling agendas. (insert your applicable country here)
*my random assumption partly based upon personal experience
The answer was short, and to the point. You can't have two CEO's, their time (excluding the cost of their salaries) is limited, and needed to be efficient. If you look at the Travel itinerary's of many of these folk, they would get a 1/4* at best of the travel they get in with commercial aviation. (Excluding the fact that they can get business done, or suitable rest, in private aircraft)
For Obama (PBUH) to tell Citi to cancel their aircraft order (let alone for the valid reasons pointed out by con-pilot), is a bit rich when he feels he needs 23 helicopters, to fly in 3 x USD 600m helicopters at a time, and have a fleet waiting for him at each location, let alone the rest of the Presidential flight detail excess.
So much so I have written to my Senator. (And I would encourage the rest of you who reside in the US, to do so too).
Citi is a Global company, and there are valid reasons for them to have their own aircraft... probably more now than ever, where executives need to rally the troupes and run their Global offices.
I think the transparency issues come when these executives use these aircraft on personal trips, paid for or subsidized by the company, which is often the case.
Con's other point about Nanci Pelosi is another classic. Aside from the controvesy over the aircraft choice, and the ridiculous notion of 'her security' during a refuel whilst her weekly start and end points are well known, why she needs to fly to California ever week-end when her job is in Washington, is beyond.
There is so much missing the forest for the tree's going on it's ridiculous, but no one is going to do anything about it, lest the politicians start bringing some common sense into the equation, but we know that will never happened
In summary, I agree with the original point, and unfortunately we live in a world where politicians are never incentivized to look at the micro picture, in the context of the macro picture, and without using cheap shots to promote their self-fulfilling agendas. (insert your applicable country here)
*my random assumption partly based upon personal experience
Last edited by birrddog; 1st Feb 2009 at 04:27. Reason: spelung
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There are 3100 buisness jet and turboprop aircraft listed for sale on a well known industry site. Allowing for a number of duplications i'd say 3000 would be fairly accurate.
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Richard Nixon
Obama selling the two "Air Force One" machines...?
I do not think he will go that far...
But this remnds me of something many years ago. Some of you will remember.
xxx
Late 1973. Fuel crisis nš 1, the "October War" Israel and Egypt/Syria.
Tricky Dick, also known as President Richard Nixon had 2 VC-137s (707s).
One night, he flew back to California (his home) with Mrs Nixon.
From IAD to LAX, on a commercial scheduled UAL 747 flight.
Apparently, they occupied the upper deck.
Secret Service on board (and flight deck), extra security, etc...
Do not recall the exact details.
United operated their flight as "Air Force One" on R/T.
To the delight - and surprise - of the regular passengers...
xxx
Why not. With everyone lined-up at the gas pumps in the country...
A command decision, really.
Who knows, Obama might go home to ORD at times.
And decide to use the 757s they got in their fleet, rather than the 747s...
xxx
Happy contrails
I do not think he will go that far...
But this remnds me of something many years ago. Some of you will remember.
xxx
Late 1973. Fuel crisis nš 1, the "October War" Israel and Egypt/Syria.
Tricky Dick, also known as President Richard Nixon had 2 VC-137s (707s).
One night, he flew back to California (his home) with Mrs Nixon.
From IAD to LAX, on a commercial scheduled UAL 747 flight.
Apparently, they occupied the upper deck.
Secret Service on board (and flight deck), extra security, etc...
Do not recall the exact details.
United operated their flight as "Air Force One" on R/T.
To the delight - and surprise - of the regular passengers...
xxx
Why not. With everyone lined-up at the gas pumps in the country...
A command decision, really.
Who knows, Obama might go home to ORD at times.
And decide to use the 757s they got in their fleet, rather than the 747s...
xxx
Happy contrails
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Who's off to the Super Bowl in their Business Jet on Feb 1 at Tampa Bay?
Unfortunately, one of CBS's G-II's was there ...
(No, Mike's crew flew in commercially).
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Con
Good post and thank you. As a former NBAA & EBAA committee member, I have tried with some success to educate folks as to the worth of Corporate/Business Aviation. I explained the rational of the cost/benefit/time analysis that takes place, again with some success. Keep up the good work folks
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Quite possibly the benefits of these CEO's flying all around the world in business jets are being overstated a bit, perhaps if they'd stayed at home in the office and actually looked at figures instead of making them up to improve their bonuses then we would all be a bit better off now
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Quote:
Come on then Mr. Knowitall, give us the real figure!
If I were a knowitall, I obviously would not wander through the deep holes of aviation But in this case a little bit more knowledgeable than you apparently expect being one of the guys your database guys apparently call on a weekly basis.
You do really know more than me, granted!
In the interests of protecting young, impressionable children this post has been edited. Keep it nice please.
Duck
Come on then Mr. Knowitall, give us the real figure!
If I were a knowitall, I obviously would not wander through the deep holes of aviation But in this case a little bit more knowledgeable than you apparently expect being one of the guys your database guys apparently call on a weekly basis.
You do really know more than me, granted!
In the interests of protecting young, impressionable children this post has been edited. Keep it nice please.
Duck
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The problem here is not the Biz Jets. Biz Jets are good and in many cases very productive for it's companies. Even if in many cases they are used as a luxury or a perk, at the end of the day it's little money in comparison.
The big problem is the BIG bonuses that CEO's and other top execs are receiving. Even when the company is losing BIG money.
An average midsize bizjet costs about $ 2mill a year to operate. Many of these CEO's get 10 times that even if they run the company into the ground. Then you have all the other big shots salaries!
The problem is that top exec pay is too high!
The big problem is the BIG bonuses that CEO's and other top execs are receiving. Even when the company is losing BIG money.
An average midsize bizjet costs about $ 2mill a year to operate. Many of these CEO's get 10 times that even if they run the company into the ground. Then you have all the other big shots salaries!
The problem is that top exec pay is too high!
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Impact of global recession on utilisation of biz jets.
Returning to the thread, rather than talking about excessive corporate pay and bonuses, it is evident that there is already a marked downturn in corporate aviation in the US and Europe.
Some flight departments have closed, the frax companies are delaying their fleet enlargements, and even those aircraft still in corporate use are expecting to fly less hours this year.
However the requirement to fly has not gone away.....it just has to be more judiciously authorised and accountably justified.
The good times will be back and the purse strings relaxed, but until then we need to be extremely careful to exercise the same fiscal prudence that our companies need to succeed in the current economic climate.
Some flight departments have closed, the frax companies are delaying their fleet enlargements, and even those aircraft still in corporate use are expecting to fly less hours this year.
However the requirement to fly has not gone away.....it just has to be more judiciously authorised and accountably justified.
The good times will be back and the purse strings relaxed, but until then we need to be extremely careful to exercise the same fiscal prudence that our companies need to succeed in the current economic climate.