Detroit 3 JetGate fallout puts hurt on private jet industry
Many insiders in the general aviation industry are pondering whether the fateful trip of three CEOs from Detroit to Washington late last year will sound the death knell for private jet travel. Jim Schuster, chief executive of Hawker Beechcraft, says in regards to that trip, "I sat back in my chair and put my hands over my eyes and said, 'Oh, why did they do that? It was terrible, terrible judgment on their part, but I don't think they stopped to think for a minute that people were going to react this way."
Even before the public outrage directed towards Rick Wagoner, Bob Nardelli and Alan Mulally and their flight to visit Congress hoping for a bailout, the sinking global economy was hurting the sales of business aicraft; but afterwards, the industry really tanked, which is a shame. There really are instances when business jet travel makes plenty of sense, such as when traveling to a small market that's not served by commercial airlines or when shuttling dozens of people at a time. The trick, apparently, is knowing when to use private jets and when to leave them docked at the airport – a trick that some execs had obviously failed to learn.
[Source: New York Times]
Reader Comments (Page 1 of 3)
why not the LS2LS7? 4:34PM (2/17/2009)
Wow, it's sure in vogue to blame others for one's own problems now.
Can't take that your market is shrinking due to the economy? Blame it on Detroit.
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matt 10:40AM (2/18/2009)
Is it vogue to pretend like you know what you're talking about? Is it in vogue to use the word 'vogue'? Odds are you don't know a thing about the aviaiton industry. You think all that talk about them flying in their jets made companies want to go out and buy one for themselves? Yeah bud, that publicity definitely made things worse.
why not the LS2LS7? 5:30PM (2/17/2009)
My expectation is the CEOs don't give a crap. They didn't get to the level of considering a private jet by going all soft when someone else criticized them.
If the companies could afford private planes, they'd get them. With the economy down, they can't all afford them anymore.
the vegas style guy 6:59PM (2/17/2009)
I am almost as a big a fanatic about planes as I am about cars, so, this is sad.
However, the last few years obsession with "Bling" and "VIP Bottle Service" have finally met their natural match, bad time backlash.
For too long, the average person has had their noses rubbed in while people bragged about what they had when others were losing their jobs and being reduced to part time work
Regardless of ones politics, there's more than a little schadenfraude in the air right now. Look at Vegas. We have been pushing the high life (notice my screen name) and now, we're biting it because we are seen as an example of all that has been wrong with our money consumed culture the last few years.
Private jets are the ultimate symbol of the times that are past.
Clay Garland 10:31AM (2/18/2009)
I have a sneaking suspicion that no one is busting Nancy Pelosi or Harry Ried's balls for using their government funded jets for air travel.
Tagg 4:44PM (2/17/2009)
I still think this is funny in a sad way that flying in private planes caused such an uproar and then became part of the bailout agreement for GM and Chrysler. Meanwhile, Air Force One flies to Denver from D.C. to sign a bill that was written in Washington D.C. without a peep from the "watchdogs" of congress or our esteemed media.
Kind of silly if you ask me.
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BLS 4:47PM (2/17/2009)
I can only assume that the executive TARP restrictions will apply to government officials because the government is trillions of dollars in the hole. (worse than the banks)
Will 4:59PM (2/17/2009)
The controversy was that the CEOs had to defense for their actions. They showed up with the hands out and not much of a plan or explanation. The showed up in Washington going through the motions and got caught out.
If they had said "We are CEOs of international companies and our time is of the utmost value to our company (just look at our pay for justification of that statement). NOT flying here would have wasted time and further risked the jobs of our employees and the town that depend on them," then the panel would have just gone on to the next question. Nobody questions CEOs flying around in private jets as long as those CEOs are earning that sort of perk.
Polly Prissy Pants 5:24PM (2/17/2009)
"We are CEOs of international companies and our time is of the utmost value to our company (just look at our pay for justification of that statement)"
Heh, I'm not sure if you were trying to make a joke but that's a good one either way. I'm not sure citing an example of your own personal executive compensation abuse is the best way to defend taking a private jet everywhere you go.
why not the LS2LS7? 5:36PM (2/17/2009)
Oh, the media didn't cover it? And you found out how? You just happened to be there when the plane landed? I'm guessing you found out about it from the media coverage you say didn't exist.
Here's some of it right now.
http://abcnews.go.com/Politics/Economy/story?id=6894750&page=1
Only little known, hard news outlets like USA Today got the scoop.
http://www.usatoday.com/news/washington/2009-02-14-obama-denver-stimulus_N.htm
It's funny how the people who get their opinions from the media the most also like to complain the media coverage the most too.
Tagg 7:46PM (2/17/2009)
why not the LS2LS7?
You should change your name to "why am I so angry?". Seriously, every one of your posts is angry and an attack another post.
Anyways, you seem to miss my point. Media covered the signing sure but they didn't make a peep about how much it cost or how absurd it is to fly across the country to sign a bill conceived and written just minutes from the White House. When Mullaly, Wagoner, and Nardelli flew to D.C. you heard about it for days on end.
You seem more interested in trying to tear down my post than looking at the real story.
Oh, by the way. There is a second 747 that flies with Air Force One as a decoy and as a backup in case of mechanical failure. There are also 3 "Marine One" helicopters too that fly together and play the shell game in flight. Only one has the President and only the pilots know which one.
Pelosi does have a plane to use but it's a C-40B or also known as a Boeing 737.
why not the LS2LS7? 8:50PM (2/17/2009)
The real story? The real story is some company that makes luxury items is hit hard by the recession. It's not 747s, it's not Pelosi. It's not even Detroit.
Yes, we heard about the flights for days on end. We also hear about Exxon's enormous profits ($45B in a quarter and rising!) I do not believe CEOs are influenced any more away from private jets by the press coverage than Exxon is influenced away from making big profits by their press coverage.
There's no decoy 747. 747s cannot play a "shell game" in flight. There are a lot of planes in the flight group, but none is designated as a decoy. And Obama was in Chicago before he flew to Colorado, saying he "flew across the country" to sign it is a bit of an exaggeration, especially when you add the "minutes away" part.
As a West coast person, I'm glad to see Obama out and about. D.C. is not in the center of our country geographically or culturally, and he has to represent us all. Serving the entire country without leaving D.C. isn't much more practical than trying to get elected without leaving D.C.
BLS 4:41PM (2/17/2009)
Why is it that when there is a scandal you can just put the suffix -gate on a descriptive word for the scandal? Watergate was the name of the Hotel.
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Todd 4:44PM (2/17/2009)
"There really are instances when business jet travel makes plenty of sense, such as when traveling to a small market that's not served by commercial airlines or when shuttling dozens of people at a time."
That's the most ridiculous I have ever read. Flying coach on commercial airlines is 1/1000th the annual cost of a private jet.
Only out of touch, over paid, possibly treasonous executives would ever use a non-logical statement like that to justify such obscene waste.
"Let them eat cake!" indeed.
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Skye 6:38PM (2/17/2009)
It's not always practical to fly commercial. I'm not saying companies shouldn't use commercial airlines more often but there are often times when someone needs to fly somewhere RIGHT NOW and can't afford to either risk a commercial aircraft delay or layover. It's also very possible a commercial flight isn't available immediately.
Most upper-echelon private jets fly above the commercial-aircraft ceiling, enabling them to get from A to B directly rather than being forced to follow a less-linear flight path.
Private jets may be openly abused by the higher-ups of corporate America, but they do serve a purpose.
Polly Prissy Pants 5:15PM (2/17/2009)
There are rare occasions where a private flight is beneficial, corporate America just abused the practice and now they're suffering the backlash. Just as with the backlash against general executive compensation, the was bound to happen.
It's not a black and white situation and if these aviation companies only see a 20% decrease then I'd say they're probably doing pretty well considering how much this was being abused.
I'll also add that justifying corporate abuse with the argument that politicians do it too really isn't much of an argument. While politicians abuse this perk as well, it's really not relevant when discussing whether it's right or wrong within corporate America.
BLS 4:44PM (2/17/2009)
Blame shouldn't be on Detroit however it does personify the current state of affairs in this country that the rich are bad and should be put in their place. Consopicuous consumption is out; shame is in.
If I were rich I would watch out for guillotines being assembled in public places.
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Jake 4:51PM (2/17/2009)
This is offset by the booming spa and resort industry in Virginia and both Democratic and Republican congressional delegations have pleasure outings before voting us another $Trillion$ in debt.
When are foreign investors going to stop purchase US T-Bonds that are approaching junk status?
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the vegas style guy 8:01PM (2/17/2009)
OMG DID YOU READ WHAT I JUST POSTED LAST NIGHT ON MY BLOG? LOL!
That little Virginia trip really cheesed me off!
http://dereksbigfatdemocraticadventure.blogspot.com/
BoxerFanatic 4:51PM (2/17/2009)
Funny, considering Obama flies a 747 to colorado to sign the stimulus bill in front of solar panels. And there is always the secondary 747 that files also as a decoy, and a cargo plane with his up-armored humvee-turned-caddy inside.
Pelosi flies a private flight government 757 back and forth to california, to avoid a layover for fuel in Kansas, which a smaller jet would require.
All sorts of government people fly private airforce flights all over the world, all of the time... but private industry is vilified for it.
Government contracts are the largest demand for light aircraft.
The government wants to tell everyone they have to put the screws to their travel budgets, give up aircraft that are in the pipeline, at huge costs in contract cancellations, put people at a time disadvantage, and put aerospace workers in danger of losing their jobs.
But government pay, and government travel are both rising.
If Companies have to be FORCED to cut back by accepting taxpayer dollars, exactly who pays for every last dime of the federal government, including their aircraft fleets and private travel accomidations?
THE TAXPAYERS. Some of which the government is putting OUT of work with avalanches of new regulations in the anti-stimulus pro-socialist bill that just cost more in terms of jet fuel for Obama to sign than a normal household will use in any sort of fuel for 30 years.
Sickening.
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