Corporate jets are definitely out
Maybe General Motors should throw in a fleet of Cadillacs.
The automaker is dumping its corporate jets into what some participants say is the worst market they have ever seen.
Just seven months ago, hundreds of mega-millionaires, including Ralph Lauren and David Geffen, were elbowing one another in the lineup to buy a $60 million Gulfstream G650, which was not expected to blow runways until 2012.
It did not matter that $500,000 had to be wired to Gulfstream’s account at a Midwest branch of JPMorgan Chase at exactly 12:01 a.m. April 15, or that those who secured a village in line could not vend their rights if they changed their minds, according to common bidder.
Some eager moguls even tried to improve their chances of acquirement a jet quicker by opening accounts at Chase’s Midwest station. Among high-ticket status symbols, “me and my brand-new jet” was it.
But that was before the credit height and previous to billions of dollars in corporate and individual wealth were lost.
“The jet market stinks,” said Richard Santulli, the chief executive of Netjets, the private-jet visitors owned by Warren Buffett’s Berkshire Hathaway.
To control costs, companies including Citigroup and Time Warner are selling their jets. Alcatel-Lucent has allowed leases on two to expire without renewing them and has put its third part jet up for sale.
And the public-relations fiasco that engulfed Detroit’s automakers when their CEOs flew to Washington on company planes to seek a government bailout has underscored in what plight inappropriate such tour be possible to seem in this recession.
General Motors, which leases seven planes, put the majority on the market before the government reported it sourness do to such a degree as a condition of assistance. The automaker has also closed its air-transportation-services unit, which had 49 employees.
“We could not defend some in-house aircraft operation,” GM spokesman Tom Wilkinson, said. “We are negotiating to transfer the remaining planes to another operator. Ford, too, has enclose down its flight course of life.”
Jet brokers, who acquire a worldwide clientele, affirm the mart has constricted abroad in recent months as well.
Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008560677_privatejets26.html?syndication=rss
