Big 3 auto execs did disservice to private jets

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Gregory CohenExecutives of the Big Three automakers suffered a public relations disaster when members of Congress criticized them for flying separately to Washington on corporate jets to plead for a bailout.

But while the private jets became a lightning bolt for many taxpayers, there are some very valid business and economic reasons why private aircraft travel has been rapidly expanding, especially over the past four or five years.

In 2001, there were 1,463 private jets registered in the U.S. Today there are more than 17,000, a 1,300% increase, due largely to new tax laws that have encouraged entrepreneurs, companies and the affluent to buy, own and operate aircraft.

The growing stress associated with flying commercial airlines has also contributed to the increase.

Many executives and celebrities wish to avoid protracted, dehumanizing procedures at airports and on public flights, whether the issue is long waits, having one's baggage searched, removing one's shoes or being confined to a small seat in a crowded cabin for hours at a time.

Comfort and efficiency are much greater at private terminals and airports. There are only about 500 commercial airports in the U.S., compared with 5,000 private airports. When traveling anywhere other than to a hub city, flying private aircraft into a convenient facility can mean significant time savings.

Moreover, commercial airlines are restricted as to where and when they can take off and land in inclement weather, while private aircraft have much greater flexibility.

In addition, commercial airlines have made it difficult and costly to reserve tickets within a tight time frame. If more than one executive is taking the trip, issues like ticket availability, schedule changes or refunds become time-consuming. Thus, the practicality of private aircraft increases with the number of passengers making the same trip.

Most importantly, the lack of on-time dependability resulting from delayed or canceled commercial flights can cause executives to miss meetings or events, which can result in serious opportunity costs for their companies.

The combination of private aircraft ownership and Internet technology has engendered a whole new cottage industry: the charter private aircraft broker.

These small businesses usually do not own aircraft. Instead, they match private aircraft owners who put their planes up for charter with travelers who want to fly private. Brokers also provide a variety of related services, such as scheduling, catering, ground travel and hotel reservations.

To avoid damaging their credibility, the Big Three executives might have been more judicious in their use of private aircraft. They could have flown together instead of separately. They could have chosen smaller, more appropriate aircraft that would have cost much less to fly than the planes they used.

During this time of austerity, they should either sell their aircraft or eliminate any leasing arrangements, relying instead on competitive, private-charter aircraft brokers on those occasions when it makes economic sense for them to fly private.

Despite the public pummeling that private jets have received recently, industry trends suggest that private aircraft ownership and use will continue to accelerate at least for the next several years.

Gregory Cohen is the founder and CEO of Halcyon Jets, (www.halcyonjets.com), a charter aircraft broker with offices in New York; Boca Raton, Fla.; and Beverly Hills, Calif.

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