““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
An Urgent Message from BJT's Managing Director
The cover story in this issue addresses one of the most serious events ever to hit our industry: the negative publicity that private aviation continues to receive because of the public relations fiasco that resulted when Detroit's Big Three auto CEOs traveled to Washington by business jet to plead for bailout money. That negative publicity has debased and now dogs private aviation.
Business aviation has suddenly become the whipping boy for many populist causes. The general media and many members of Congress are having a field day with this issue. They have succeeded in completely misrepresenting the value of business aircraft.
These aircraft, which are legitimate and often indispensable business tools, have become synonymous with fat cats and excessive luxury. Never mind that congressmen and other government personnel use private lift every day. Never mind that the presidential candidates could not have conducted their campaigns without private aircraft. Never mind that members of the general press corps-which has played a huge role in distorting the industry's image-regularly fly on business jets themselves.
What to do. I realize that you have your own companies to run and are facing critical decisions on a daily basis. These are perilous times and it would be easy to say that concerns about the image of corporate airplanes are low priority. But they shouldn't be-not if you want to avoid becoming former business jet travelers.
A Call to Arms
To keep that from happening you must defend your use of corporate aircraft. Many of you run complex businesses and you must be able to travel to cities and countries without the time constraints of airline schedules. You need safety, security and privacy to efficiently conduct your affairs while traveling.
If you run a publicly held company, bring up your use of business aviation directly with your stockholders. Don't shy away from the subject-meet it head on. Defend the utility of your aircraft. Explain why it is mandatory that you have private air transportation at your disposal.
This is a serious matter that should be addressed directly or indirectly by every single person reading this publication. The business aviation community is currently fighting issues in Washington that could adversely impact your ability to use aircraft effectively. In addition to user fees, there is a proposal from the Transportation Security Administration that will encumber your ability to operate any aircraft larger than a light jet by imposing manifest and cargo restrictions on every flight. Congress-a component of which has been blatantly taking advantage of the negative image of corporate airplanes-will decide the outcome of most of these issues in the year ahead.
In addition, we need your help to deliver the message that the business aviation industry contributes significantly to our country's economic health. America invented the business aircraft in the aftermath of World War II. Today, corporate aviation is a vibrant, thriving business sector. Annual new-jet sales have been in the $20 billion range during the past few years; adding in fuel, maintenance, charter and other related activities puts the entire corporate aviation industry well over $100 billion per year.
What's more, American companies dominate the business, both in the U.S. and internationally. Yes, there are worthy competitors from Brazil (Embraer), Canada (Bombardier) and Europe (Airbus and Dassault), but U.S.-based Boeing Business Jets, Cessna, Gulfstream and Hawker Beechcraft are household names with huge market shares. All of these companies had record sales in 2008; what's more, even the "international" business jet manufacturers have massive service and maintenance facilities in the U.S. employing tens of thousands of American workers.
This industry is the envy of the world and an invaluable tool for American companies. Let's make sure our employees, shareholders, representatives and fellow citizens understand why. Let's not allow misguided groups to cripple it.
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