NBAA Reacts to USA Today Article on Business Aircraft Use

National Business Aviation Association (NBAA) President and CEO Ed Bolen has issued the following statement in response to an April 26, 2005, article, published in USA Today, which focused on business aircraft use. NBAA also has sent a letter to the editor of the newspaper concerning the matter.

What USA Today Didn't Say About Business Aircraft Use

A statement from Ed Bolen, President and CEO, National Business Aviation Association

It seems that every year or so, a journalist recycles a story about the annual filings of publicly traded companies to write a condemning account of corporate officials' use of company aircraft. So it was with a recent USA Today story focusing on use of company planes for personal executive travel (“The corporate jet: Necessity or ultimate executive toy?” 4/26/05).

Unfortunately, this sensationalist approach conveys the impression that business aviation is simply a perk of the corporate elite, when the facts document a very different, American entrepreneurial story.

About 15,000 business aircraft are registered in the United States, only 3 percent of which are flown by Fortune 500 companies. The vast majority, 97 percent, are flown by a diverse group of operators in every state – government, schools and universities, farms, foundations and other charitable organizations, religious institutions and an array of small and medium-size businesses.

Passenger surveys indicate that the majority of business aviation flyers, 86 percent, are not top management, but mid-level, professional or technical staff heading to a remote location or making more efficient use of business time.

Surveys also show that business aviation passengers who make decisions about whether or not to use company aircraft are cost sensitive; their use drops by half if the cost of that business flight increases by $300 per takeoff and landing.

And, contrary to claims made in USA Today, studies have shown that companies operating business aircraft earn over 140 percent more in cumulative shareholder returns than companies without business aircraft.

So what about the minority of corporate executives whose compensation includes personal travel privileges on company planes, which USA Today chose to focus on instead of the more than 10,000 American companies using business aircraft?

There are many reasons why an executive might use aircraft for purposes other than business travel. Some company directors require top executives to use company planes for all their travel based on the outstanding safety and security of business aviation. In a post-9/11 world, security for many companies has become a higher priority, and a company plane features pilots, crew and passengers who all know each other, in contrast to the passenger airlines. Other company directors cite the importance of making the best use of their top executives' time, and prefer the greater efficiency of a company plane to commercial aviation. In some instances, top executives have negotiated personal use of company planes as part of their compensation packages.

Corporate boards of directors develop travel policies including personal use of corporate planes in full compliance with federal tax laws and Securities and Exchange Commission rules. These decisions are based on what is deemed best for running the business and retaining top management talent. In sum, on what is best for the bottom line.

The fact is, America's business aviation travelers are many thousands of professionals, managers, owners and technicians flying to conduct business safely and efficiently. It's unfortunate that USA Today tried to portray this community in an unfavorable light.

FMI: www.nbaa.org