Other Than Appearances, That Is

This Associated Press article about how Wall Street companies are still using corporate jets is a bit much.

Corporate jets, in truth, are — solely in business terms — very profitable.

First off is the cost: It's $20,000 in fuel to fly a private jet across the country, and figure to kick in $5,000 for maintenance and pilot, et cetera. Now, put 8 bank executives on that plane making a combined total of, say, $12 million per year. At 50 hours per week, that's $4,600 per hour in combined salaries. A 4½-hour commercial flight, plus a 30-minute check-in for a total of 5 hours is $23,000. Add to that the cost of 8 tickets, and you've got $25,000. On a private flight (you've seen it in the movies), it's right up to the plane in the limo, no check-in, and straight to flying. While up in the air, there is business being conducted, conference calls being made, and then upon landing, it's straight off to the meetings.

We'll add to that the scheduling: If you're a bank executive with 7 other people, imagine trying to find a flight that will get you from New York City to Dallas with exactly enough time to get to your company's scheduled meeting, and then another flight returning you all to New York City that leaves exactly when you are ready to go back to New York, without requiring you to wait around... and more importantly, a flight that will wait for you and your executive team when the meeting inevitably runs late.

Additionally, most Boards of Directors of major banks insist that their executives fly in private jets on all occasions because of security reasons, especially when they travel internationally. How much insurance do you think is taken out on a Wall Street billionaire? Do you really want to expose the senior managers of your trillion-dollar portfolio to the hustle and bustle of the airport in Amsterdam? Want to risk a kidnapping? (The ransom will certainly be much more than operating a private jet for any length of time.) Hell, executives like those getting the flu from the guy sitting next to them in First Class, and missing a week of work, would cost the same amount in lost productivity as a private jet costs per year.

In the end though, while it's fair to say that appearances matter, it still seems a bit punctilious for the Associated Press to be nitpicking on a bank's ten-million-dollar-per-year, debatedly-optional business expense because that bank received $150 billion (that's 15,000 years of private jet operations) from the government.