Corporate Aircraft

CEO's have been taking a beating lately about their private corporate aircraft.  These private jets just seem to be luxury perks paid at the expense of the shareholders.  Indeed, private jets are an expensive item to own with fuel, fees, pilots, and maintenance.  After all, even the airlines have a hard time making a dollar and corporations are not even looking charging for their flights.  The funny hypocrisy is that Congress has gotten into the issue berating the car manufacturing CEO's for flying private aircraft, when Congressmen often fly in private jets owned by publicly owned corporations.

However, executive aircraft do not need to be owned by a corporation to enjoy the benefits of corporate jets.  There are businesses that have charter programs for private jets, where the private jet owners share ownership in a single jet (fractional ownership).  But the real benefit is that the shareholders in the aircraft may use the entire fleet of jets in a program.  Thus the cost of ownership is transferred and the corporation is only charged for what they use.  These programs are financially sound enough that Warren Buffett holds an ownership stake in one – NetJets.  These programs could be a good answer to the critics of executive perks in travel.
Published December 12th, 2009

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