In defense of corporate planes

Bloomberg.com

Private jets have long been stand-ins for corporate indulgence, said Joe Nocera. “Nothing looks more excessive and more plutocratic” than a CEO jetting around on a company plane—which means aircraft are “easy targets” when firms want to show shareholders they are cutting costs. Take General Electric. The Wall Street Journal recently exposed former CEO Jeff Immelt’s practice of traveling with a “backup jet” in case something happened to the corporate plane he was using. New CEO John Flannery, eager to contrast himself with his “free-spending” predecessor, has embarked on a company-wide cost-cutting spree, and in addition to jettisoning the backup plane, he’s eliminated the entire corporate fleet. If you ask me, “this is

the cost-cutting equivalent of cutting off your nose to spite your face.” Yes, Immelt’s practice of flying with an extra jet was excessive. But “when you run a big company, a corporate jet really isn’t an indulgence. Rather, it’s a tool.” When Warren Buffett reluctantly bought a private plane in the 1990s, he christened it “The Indefensible.” Within a few years, he renamed it “The Indispensable.” He understood that when someone “has far more to do than there are hours in the day, flying commercial is counterproductive and costly.” Flying private may look like an indulgence. But it’s often “the most efficient, most productive way for a busy executive to get from Point A to Point B. Shareholders should want that.”