Corporations have been shedding their private aircraft since well before the three automakers made the idiotic decision to go to Washington, hats in hand, on their private jets. Unfortunately, the event has reignited the debate about corporate jet perks as being a luxury companies can no longer afford.
Last week saw major coverage in USA Today indicating AT&T, Citigroup, Chrysler, Ford, General Motors, McClatchy newspapers, Gannett and a Colorado-based mining company are all shedding their corporate aircraf and relating it to the automaker's goof. In addition, the publication reported that research organizations are showing significant declines in usage that has more to do with the economy than in any pr problem the automakers made.
In October, flights by private jets plunged 19 percent year-over-year, and flights are down 10 percent this year, UBS Research analyst David Strauss told USA Today. UBS also reported that 16 percent of all biz jets worldwide are for sale, doubling the amount of only a year ago.
But it was also a missed opportunity for the industry to explain the corporate jet’s productivity role and that was made clear by last week’s Aviation Today webinar in which speakers roundly criticized the CEOs for not defending the use of the private jet.
That was a bit mistake,” said InterFlight Consulting CEO Oscar Garcia. “In fact it was the biggest fiasco in PR, not because they flew on their private jets but because they did not defend private jets as a tool for productivity and a tool for their efficiency that they have been using. If they were really honest they would have said ‘absolutely we flew on a private jet and we are going to show you how these private jets help us to make more for an ailing industry.’”
While that last statement may seem a little counter-intuitive since the industry is ailing so dramatically, it is accurate to say that increased executive productivity goes right to the bottom line, especially with the salaries these guys are bringing down.
“Every board room now across the world is going to flight departments and saying the moment these guys were challenged the first thing they did was sell the flight departments and now they are questioning whether [in having their own flight department] they are doing the right thing," said Garcia. “They should have defended that, strongly, because they do know these are productivity tools. If you measure the practical costs elements of those flight departments, you easily come to that conclusion and, publicly, it would have been great PR to say they use them and they know they are making money with them. They have measured and have no problem showing how those jets allow them to get back to work to make more money.”
Jack Demeis, CEO of Continuum Applied Technologies concured. "It shows their state of mind," he said. "They completely lost total track of the corporate jet as a productivity tool, which, as a practical matter, is key for them, and under this much pressure they just folded."
One can understand why the CEOs opted not to defend their use. After all, they have bigger things on their agenda that hawking for the corporate jet industry. But, more importantly from a strategic PR point of view, it is far easier to say mea culpa than defend what Main Street little understands. As for the automakers, it was observed by Aviation Today Publisher John Persinos, that the CEOs pulled off the neat trick of not only hurting their industry but managing to hurt the business jet industry as well.
But what of the National Business Aircraft Association which also opted not to put a dog in that hunt preferring to stay relatively mum in the face of the obvious firestorm? It has ready access to the productivity arguments on its web site. I’ve used them often in my reporting. So, it should have had that arrow in its quiver, ready to fly, if for no other reason than to educate reporters for the next time.
There has been no commentary on the productivity such equipment contributes to the bottom line. Related Story Nor have there been any reports of how many non-CEO travelers have abandoned commercial transport in favor of private air transportation. Related Story The only thing coming out of corporate PR suites was limp messages about private aircraft being required for security, which grew even weaker with the number of aircraft being put on the market.
It is more than likely that this was a PR battle that was impossible to win when viewers and readers have the attention span of a sound bite. Even so, it was a missed opportunity, one that has been long in coming and it is a shame the industry did not interject the productivity and efficiency arguments, which are growing in importance as the economy weakens. After all, industry has long understood these facts which have, in recent years, changed forever the role of the business jet in commerce. Unfortunately, this kerfuffle has put us back a decade in the public understanding of business aircraft.