I am sure by now most of you have read the article put out last week about the Big three Automakers flying their corporate aircraft to Washington D.C. to make their plea for a twenty five billion dollar bail-out package. If not, you can see the story and some video at the following link:
The video throws out a lot of pretty ugly numbers that sound shocking to most people out there. They claim that the round trip flight for the executives at GM to fly from Detroit to D.C. cost an estimated $20,000 on their G-450. They also claim that the same trip would cost $288 on the airlines flying coach or $837 first class. The video does not say where they came up with their $20,000 estimate for the flight, but that number is not reflective of reality. The latest Conklin & De decker figures show fuel burn for a 450 to be 502 gallons per hour. Assuming $6.50 per gallon (these are old numbers, fuel has come down fast lately) the G-450 would cost about $3,263 per hour to fly. The round trip should take about two hours or $6,526. Even if you threw in all direct operating costs (maintenance & engine reserves, landing fees, crew expenses, catering, etc.), you would be looking at no more than $8,500 for the trip. But, because the media was unwilling to obtain real data for that part of the story, they were able to significantly exaggerate the cost difference. Plus the fact that the cost of flying coach on the airlines is for one person and I am sure that GM took several people on the aircraft for that meeting. So, depending on how many people GM brought on their trip, it very well might have been cheaper for GM to bring their 450.
I remember when we had the Enron aircraft for sale during their meltdown. There was a camera truck parked across the street from the hangar for weeks just hoping to catch a glimpse of the executives flying the airplane. Strict orders were issued that the airplane was not to be used for any reason. I think it is somewhat telling that Enron was able to see the circling clouds that surrounded them at the time, but the executives at AIG and the Big 3 do not seem to understand. These stories are all about public perception and the executives at the Big 3 should have been prepared with a proper response to the questions they were asked about the use of their corporate aircraft.
I follow the NBAA Airmail threads and noticed the following from GM’s Director of Aviation on Friday. “And what the media will never point out is the amount of times that I have flown cancer victims via the Corporate Angel Network, the numerous medical relief flights for the victims of Katrina, or the blood drives and money donated to San Francisco after the 1989 earthquake, and since 1999 our charter flight revenue that came off our bottom line, which incidentally is close to 2000 hours for 2008. (Total that one up Good Morning America, how many millions?)”
A few talking points like that would have been very handy to throw at the media when asked about the operation of their aircraft. I think we should all be prepared in this bizarre economic environment to defend the use of corporate aircraft at any time. It is not just the auto industry that is under fire right now, but any corporation that is perceived to be over spending on luxuries. If you don’t have a list of bullet points to throw at anyone who asks, I suggest you do a little research quickly. This story just moved this topic of conversation from the board room to the dinner table.
Toby J. Smith
JBA Aviation, Inc.