Thursday, June 30, 2011

Business Jet Politics: Time to Round Up the Usual Suspects?

President Obama mentioned the "corporate jet tax break" several times in his comments about tax loopholes for the rich this week.

Beating up on private jets is always good for scoring political points. People who don't fly in them hate corporate jets. (Personally, I am quoted in the current issue of Business Jet Traveler magazine as saying that the very first thing I would do if I acquired an extremely large sum of money is "order a G-650." But I would also not squawk about paying a fair tax on it, either, as I headed to the Cannes Film Festival with my entourage. Hell, I'd be rich.)

Anyway, as usual, the private jet industry responds to an attack by huffing and puffing -- and missing the opportunity to deliberately argue the sensible case for business aviation.

Incidentally, how significant is the "corporate jet tax break" in the overall context of potential revenue for the federal government?

Negligible, is the answer.

But instead of making a reasoned case based on this, the industry and its assembled amen choruses are wasting their breath insulting the president and sending what they risibly describe as "strongly worded" letters to the White House.

As the old joke-telegram went: "F--- you. Strong letter follows."

Business aviation needs to smarten its head as we brace for hitting the economic wall in tax policy. And that collision will be followed quickly by the presidential election season.

Trust me, no one in politics will be standing up to defend some hump of a CEO taking the corporate jet to Nantucket with the wife, kids, nanny, and poodle all aboard. And thanks to some hump CEOs, that is what the public sees when they think of corporate jets.

Why is it so easy to pick on the corporate jet? Well, I'd merely refer you to recent stories in the Wall Street Journal, which has been hammering away at the business aviation world. I've always thought of the Journal as being like the wise old veteran sheriff trying to maintain law and order in an invincibly crooked town. Once in a while, the sheriff and his deputies have to ride around town with six-shooters drawn, raiding the whore houses and rousting some of the girls. Commotion ensues, but in a few days the girls are all out of jail and all returns to normal for a long spell. It's all a matter of optics, you see.

(I was an editor and reporter at the Journal for about seven years, incidentally, and I say the above with a degree of insight).

Anyway, the Journal has been doing bang-up work on corporate jets, with a serious focus on abuses. The best argument for business aviation is that a private jet is a very sensible business tool whose utility goes right to the bottom line as a plus, given that business needs to get done and our commercial air-travel system makes it very difficult to get quickly from Point A to Point B, without stops at Points C-D and sometimes E along the way.

But as the Journal has been pointing out, at many companies, the CEO has first dibs on the company plane or planes, and treats them like glorified limousines, including using them for personal trips. Hilariously, the Journal has reported on some CEOs who claim they need to travel on a heavy-metal luxury Gulfstream because of "security." That is, some pant-load of a CEO at some company claims, ridiculously, that he or she is such a great world personage that there is a need to avoid the public -- who overwhelmingly have never ever heard of this person or in many cases even the company.

In ignoring these clowns, the business-aviation industry whistles past the graveyard when these abuses are discussed in public, as they increasingly are. Every time the public outrage about business jets rises, as it has begun to rise once again, the opportunity is lost to make the viable case for business aviation, if the stance is to ignore the obvious abuses and send a message of support to the CEO with the poodle.

David Kashdan, a Journal reader, wrote a letter to the editor recently that made some very good points.

"Your article nicely details management abuse of corporate jets, at significant cost to shareholders," he wrote. "This abuse also causes corporate jets to be less available for use by middle managers who do much of the company's business. Twenty years ago it was common for a broad spectrum of managers to use corporate jets, but now the "privilege" is reserved largely for the top echelon, who view the plane as a personal perk rather than a corporate asset. ..."

The public back in row 18 on that 737 senses this. Public disdain for the fat-cat abusing the company jet will grow.

The crowds in Paris sensed that there was nothing in the Bastille except some lunatics and some lightly guarded ammunition stores.

They stormed the hell out of it anyway. The anniversary, by the way, is coming up.



1 comment:

Jack Riepe said...

Dear Mr. Sharkey:

I used to follow the snake trails through the business travel world fairly closely, but since I was involuntarily liberated last October, I find less and less pleasure in it.

However, your most recent blog episode strikes a blow for the common man in refreshingly referring to CEOs as "humps," and a "pant-load." The abuse of business jets is yet one more way in which corporate America is distancing itself from the economic reality of middle-class America.

These CEO humps will some day face an accounting to all the laid-off middle-level managers, or the dismissed R&D teams, or long-gone assemblyline personell, when it is discovered that just one or two abused flights are a worker's salary for the year.

Few of these corporations owe their success — if many are indeed really in the chips — to the pampered "hump" at the top.

Fondest regards,
Jack Riepe
West Chester, Pa