““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 ”
Call for action after Brazilian midair
In the late afternoon of Friday, September 29, an airliner and a business jet-both at 37,000 feet and approaching each other at a combined closing speed of some 1,000 mph-collided over Brazil. Tragically, the pilots of the airliner, a Boeing 737-800, were unable to keep it flying after the collision because of damage to the leading edge of the airplane's left wing. The jet, operated by Brazilian carrier Gol Linhas Aéreas Inteligentes, crashed into the Amazon jungle, killing all of its 154 occupants.
Oddly, the much smaller Embraer Legacy 600 business jet (49,604 pounds maximum weight compared with 174,200 pounds) was relatively lightly, though not insignificantly, damaged. Pilots Joseph Lepore and Jan Palladino-both employees of the airplane's operator, charter/ management company ExcelAire of Ronkonkoma, N.Y.-knew they had to get the airplane on the ground as soon as possible, which they did. According to the one person on board the Legacy who has spoken in public to date, the airplane's seven occupants did not know they had collided with another aircraft until more than three hours later.
That person is Joe Sharkey, a freelance writer whose business travel column, "On the Road," appears weekly in The New York Times. Sharkey has written for Business Jet Traveler and was, in fact, on assignment for this magazine when the accident occurred. ExcelAire had invited BJT executive editor Jeff Burger and me to join Sharkey in Brazil, where the company would take delivery of the Legacy from Embraer, but we needed to be in the office to finish our October/November issue and had to decline the offer.
Sharkey's first-person account of his experience during the hours and days after the midair begins on page 56 of this issue. Online, you can also watch an interview I did with Sharkey in his home in Glen Ridge, N.J., just four days after the accident. (Go to www.AINtv.com and click on "In the News: Reporter Recounts Midair Collision.")
Pilots Detained in Brazil
The Brazilian authorities allowed Sharkey and the other four passengers on the flight to return home, but not the pilots, who were forced to surrender their passports. As we go to press with this issue, captain Lepore and first officer Palladino are starting the third month of their involuntary, in-country detention. Although evidence released to date shows their innocence of any intentional wrongdoing, Brazilian authorities have refused to return their passports. After issuing a preliminary assessment of the accident in November, officials said completion of a final report could take at least another 10 months. In addition, two lawsuits have already been filed on behalf of passengers of the 737.
Several associations and at least one member of Congress, Rep. Peter King (R-N.Y.), have spoken out in support of the pilots. On November 20, Ed Bolen, president and CEO of the National Business Aviation Association, sent a letter to Brazilian President Luís Inácio Lula da Silva, calling for the immediate return of the pilots. Bolen wrote, "It is our understanding that the pilots and their attorneys have fully cooperated with investigators from your government. Yet, despite their cooperation, the pilots are being held in contravention of internationally accepted practices and with no date certain for their release."
The Aircraft Owners and Pilots Association's president, Phil Boyer, requested that U.S. Secretary of State Condoleezza Rice intervene in securing the release of the pilots. "These U.S. citizen pilots should be treated fairly under the law, and the U.S. State Department must take action to obtain their release and their return to the U.S.," Boyer wrote to Secretary Rice. "AOPA is not taking a position on the accident or the investigative process; however, it is critical that due process be followed." Rep. King sent a similar letter to Secretary Rice.
You Can Help
Over the last two months, a great deal of unsubstantiated information about the accident has circulated in the news media, especially the Brazilian press. Some of it has already been shown to be incorrect and much of the rest is no more than speculation. We've read the articles and the speculation and we have our own theories about the causes of the midair. But we here at Business Jet Traveler believe it is always better to wait for the final, official accident report than to report speculation about the causes of accidents from even the most learned of experts. "The NBAA," as Bolen stated in his letter, "supports a thorough, fair, accurate and transparent investigation into the accident. We expect nothing less." We fully agree.
We also believe that the Brazilian government has no valid reason for continuing to detain pilots Lepore and Palladino at this time. If you agree, we urge you to make Secretary Rice, your Senators and your Congressmen aware of your opinion immediately. You can do this easily via e-mail at