Private jets in the industry
Those with experience,
I’m in the process of writing an introductory paper for a doctoral management course. A sub-section of the paper pertains to corporate air travel. Through research I’ve found almost all of what I’m looking for; still there seems to be a paucity of information concerning air travel in the investment banking industry.
To those who wish to help, I will pose a series of questions, to which I hope you can accurately respond. The responses garnered will not be used in my paper; nevertheless they will send me down on the proper path from which additional research can be gathered.
- Are you aware if any investment banks (US, European, Asian, [MM, BB, Boutique]) that own, lease, or charter private planes?
- If yes, which employees travel on these planes (C-levels, MD levels…)?
- Are you aware of any employees who use private planes to travel on their own time and/or at their own expense?
Thanks for your time. Also, feel free to elaborate or include anything that you think maybe of use.
Greenhill.
My bank neither owns nor leases private planes, but our London office recently entertained the idea and had a sitting with NetJets I believe. I doubt they will go through with it, but it was interesting to me that they would consider that.
If it's a roadshow, the entire deal team goes. My bank is not a BB so even the Analyst can come pending the MD's approval.
I think it's common for wealthy people of any industry to eschew commercial airlines if they can afford it and the same goes especially for BSDs. I was on a pitch where we drove down in a rental car, but the MD/Director/VP took an "air-taxi" back to our city. I was stuck driving the car back by my lonesome, but that's how it goes sometimes, haha.
sounds like a really profound and meaningful topic to write a paper on for your "doctoral management" course. education in america has reached new heights!
http://www.drmarkklein.blogspot.com/
[quote=mark klein MD]sounds like a really profound and meaningful topic to write a paper on for your "doctoral management" course. education in america has reached new heights!
http://www.drmarkklein.blogspot.com/[/quote]
Thank you all for your contributions. And for the poster above, it is an introductory paper; classes commence in a few weeks, not in America but in Britian, at Oxford's Said.
fu
Private Jet Travel Becoming More Affordable (Originally Posted: 02/19/2014)
This is one trend I can really get behind. Those of you who've read my stuff on travel know that the thing I hate most in life is commercial air travel. I largely blame the knee-jerk reaction of the US to September 11 for most of the added misery, but the airlines are pretty awful in their own right for putting people on top of one another and refusing to take off before every plane is bursting at the seams. So I'm very encouraged to see the price of private jet travel coming way down. The following trip to Switzerland for my family would cost $2,000 commercially, so to think I could eliminate all the misery for only $6,000 more makes it really tempting. I wonder what all the poor people on RyanAir think of this:
Lol, only 6K more? Or you can suck it up and deal with it. It's really not that bad.
So it's only three times the cost? Yeah I'll take sitting next to the shitting baby if it saves me six grand to lose at the casino.
Even though they're hiring more people, Air Traffic Control being unable to keep up with volume and technology advances is a big reason flying is so miserable. Also, our utter lack of investment in new airports and restrictions on foreign airlines aren't helping.
Actually if you read Eddie's post it is 2k vs 8k. But in reality a flight from Paris to Switzerland is a bit more than you would pay in the states for the same length of flight if you charter a plane. However what you have to watch out for is the carry costs associated with an extended stay. Putting the pilots up, hangar fees, flight time loss expenses. That 8k could easily jump to 15k or more.
I am generally not in a position to be flying privately. I've also always been a little cheap, but even moreso now that I have a kid. That being said, if I could get on a private (or semi-private) plane with a small group of friends for our random Vegas weekends at $1k each roundtrip from chicago instead of the $250 each we usually spend on commercial flights I would be all over it.
THIS. And this is absolutely the trend. Private air travel has been coming down in cost for years.
just wait til a terrorist can afford this and spoil it for everyone
WalMart - I don't get it - do you think someone is going to charter a flight with a terrorist?
Also, kind of a f'ed up point..
I actually think private jet travel will come under more and more pressure as airlines get better and better at making coach feel like business.
I doubt we'll have the width of a 1st class or business class seat any time soon, but some airlines have followed JetBlue's lead and provide decent movies / entertainment.
I don't get why you'd pay 3-10x coach because on about 60% of flights I pass out anyways...you could put me in between a screaming baby and a crazy person and I woudl still go coach (ear plugs would help or I would just read). That being said, it takes lot to set me off and I am pretty calm.
Maybe if I had an insane amount of wealth, sure, would be great to have the convenience of shorter security lines, leaving when you want, etc...but I feel like there are other ways to accomplish this that aren't as pricey.
Don't disagree, but at 6'4 and a finicky lower back space is definitely at a premium for me. Also, I'd pay at least $100 roundtrip just to avoid o'hare.
I am never going to be chartering my own plane, but especially for 3 day weekend trips I am willing to pay some premium for convenience and comfort.
3 $3,000 vacations > 1 $9,000 vacation
This...you should be spending money on where it counts (to maximize your new experiences from your time of leisure), not dropping a huge chunk on just getting there.
If you have this kind of dough to throw around then yeah it's great, otherwise it's pretty unnecessary. Besides if the flight is under say 5 hours it's really not a huge deal to get through (worst case scenario take a sleeping pill / sedative), it's only when you start getting those 14+ hour flights that all those miseries become grossly magnified.
Y'all were really complaining a few months ago about people like me who bring kids on planes, surprised this isnt more tempting. I'd pay it if I could afford it, even the thought of getting my family past TSA screeners makes me anxious.
This is horrible. Soon, plebes everywhere will be crowding the small airports, diminishing the value of private air travel for me.
Just have your secretary book every ticket on every plane so no one has a reason to come to the airport. Don't be afraid to spend a little of that lehman money.
Lets compare a 9 AM flight to Vegas.
Commercial : Wake up at 5 am Rush to the Airport to get there before 7 am Wait in line to be groped by a TSA agent. sit around for an hour at the gate waiting to board sit on the plane for 30 min while the group of 90 year old ladies slowly walk down the plane. 3 hour flight from DFW to Vegas take 30 min to get off the plane wait upto an hour for a cab or get a black car.
Private Wake up at 8 go to airport get right on the plane. Wheels up by 9 2.5 hour flight to Vegas complimentary black car to hotel.
Yea I'll stick with private.
Don't think anyone is arguing that private is MUCH better - just think the price differential is still too high to justify it.
For shorter weekend trips, if it was only 2x as expensive, I think it would be much more compelling and demand would go much higher...
What 3rd world country are you in where you wait an hour for taxi? I've never been felt up by an agent. Waiting by the gate does suck as well as delays, but i'd hardly be willing to shell out that much just to get their quicker (aka my time is not that valuable yet lol). with about 1k worth of gadgets i would be happy to wait around all day for a flight. food, movies, games, music, etc. waiting isn't what it used to be.
I'll be flying steerage, tyvm. That's a thing in planes right? Or maybe in the baggage sector.
Or you could just get a private pilots license and this:
http://en.m.wikipedia.org/wiki/Cessna_182
A Cessna 182RG gets 15 mpg, does ~170, and costs about $8k/year to maintain. You can drive to the airport at the drop of the hat and be in the air within 30 minutes, assuming the weather is cooperative.
170 is plebe speeds.
I took my oral and practical exam (for my A&P license) on a Cessna P-210. Beautiful, functional airplane. That said, it really is the bottom end of what you'd want to own. 172s, 182s (or, God forbid, 152s) just have too many limitations. Add to that I've always been a Piper man, and the Cherokee 6 wins every time (just something about having the wings under me where I can see 'em).
You're oversimplifying/stating the best case scenario.
I REALLY looked into getting a pilot's license. I actually still want to. I was actually thinking about using it to commute daily (actually would have worked) and go to my in-laws lake house in Michigan. What I found:
I took an intro lesson and it was awesome, but there was no way that I could justify that. It would need to be a passion of yours AND you'd need to travel a lot to justify it.
There are options to own shares of airplanes or belong to clubs, but your use can be limited and you're still paying a pretty good amount per the usage that you get.
I recently flew private for the first time (SFO to LHR) and the price increase was well worth it in my opinion (I'm comparing a past flight of similar length that I traveled first class). At least for extremely long or international flights. I don't really see flying private being worth the extra money for a normal 3 hour or less flight time. I'm pretty low maintenance / easy going, though.
A full Cessna costs less than flying coach. And there's a lot less brain damage than flying commercial or driving.
Just sayin.
If you split with someone who lives in Chicago, the storage costs get cut in half, the maintenance costs get cut by 35%, and the capital cost is cut in half. You do have to figure out who gets it when, but that's easier to work out.
It is very tempting for me to split a Mooney with someone.
You're NY/NJ right? I think a Mooney is out of my range though anyways.
You're right, if you find the right partner splitting is probably the way to go.
I've got a buddy in Dallas who owns a Bonanza. Every time we get together (and he flies the shit out of this thing for business) he tries to justify the cost. It's not even in the ballpark. Practicality isn't even part of the equation when you consider plane ownership.
I just flew to Italy and back, no problem. I really think the ills of flying are brought on by unprepared people and people who don't fly a lot and bitch way too much. To each their own I suppose.
If you are flying regularly where these issues really become a pain then you should be part of a loyalty program. Pay or get upgraded to business class, web check in, sign up for global entry, get some Bose noise canceling head phones and pop an ambian. No problems what so ever.
I literally was groped in Brussels 3 times because I didn't take my shoes off and the metal buckle set the scanner off. Literally zero issue. I spend a good chunk of my life trying to get a girl to grope me so I really don't care if some security guard lightly molests me. I get more contact in an elevator trying to get to work.
They should put strippers on airplanes...maybe airports too.
Verbier, so hot right now
All these people talking about the economics of buying a plane, whatever happened to "if it flies, floats, or f*cks, you're better off renting it"?
Private jet travel sounds like an awesome experience, and can be a very beneficial solution if your time is incredibly tight. Personally, I think you have to be in another stratosphere of wealth to justify taking a private jet over a 1st class/business seat. The longer the distance, the more that theory applies.
@"heister" you fly private?
He said "sub-section."
Do finance executives fly via private jets ? (Originally Posted: 09/07/2017)
Just wondering. My dad used to work for an airports operator industrialist back in my nation of origin. Most of the CEOs and corp finance/senior management of steel companies, mining companies, big industrial groups travel via private jet.
In the US, do finance execs fly private ? I keep seeing the Wall Street Journal and they have ads for the nicest business planes, one wonders who's who when you see all those snazzy Gulfstreams and Bombardiers and Dassaults lined up at Davos and how many are tied to finance bigwigs.
"Exec" is a broad term.
High level execs in every company fly on them, sure.
What you'll see more often is mandatory first class in an employment contract.
The costs of owning and operating a second-hand jet is like a drop in the bucket for most multi-billion dollar companies. You buy a jet for $3MM-$15MM, then spend $750k-$1.5MM operating it.
Let's do some quick math:
Let's assume that you have to fly out somewhere (and back) 3 times a week, that's 6 flights a week. Or 300 flights in 50 weeks.
Let's further assume that you're not flying alone, but have at minimum 2 colleagues with you, but sometimes more. So in one year, that amounts to 900 flights a year - or regular first class tickets, if you were to buy for the whole entourage.
Over a 5 year period(4500 "tickets"), that would amount to:
(Cheapest case) Cost of jet: $3MM 5 year maintenance: $3.75MM Total: $6.75MM
Cost pr. passenger / ticket: $6.75MM / 4500 = $1500
(Expensive case)
Cost of jet: $15MM 5 year maintenance: $7.5MM Total: $22.5MM
Cost pr. passenger / ticket: $22.5MM / 4500 = $11666
So for the cheap case that doesn't look too bad, considering the freedom and options you have. For the expensive case, that's obviously much more money. But you get a larger jet / space, more luxury, and the whole nine yards.
I mean, how much do you think it would cost to buy first class tickets on a days / hours notice?
I tried American Airlines first class, round trip from NYC to Dubai (Departing Friday, returning on Sunday) - Total cost? Almost $15k for the cheapest seats. $22k for the next option.
I then tried domestic flights, let's say NYC to LA tomorrow: Turned out to be around $7k - Much cheaper than the international short-notice flight, but still damn expensive.
So there you have a super simplified version. If the company regularly flies out their C-suites and entourage on very short notice, both national and international, sure, it could actually be cheaper with a private jet. Or at least cost the same. (I have to admit, I did not calculate in factors like frequent flying points, rebates, or other premium perks).
The third option would be a private jet club membership.
15+7.5= 22.5?
Only twice for business and once on a business/vacation trip.
BTW @Wolfofgeorgestreet" 15+7.5==22.5
Model make ? Is the hype justified ?
I always figured most people in this position flew first class, and those with private jets were either celebrities, Russian billionaires, or part of organized crime.
i have my own aeroplane k
Do you get to travel on private jets often in IB? (Originally Posted: 08/13/2016)
This may sound like a really stupid question, but I'm curious. I know traveling often is required for "roadshows" and a private jet would seem to be the most convenient way to go to 20 different locations in a week. So, does anyone have any stories?
Fly Delta
Ah. Do you travel often at the analyst stage?
Private jets are very popular for roadshows. When flying on a private jet, you leave on your own schedule, so there is less buffer time for check-in and flight delays which leads to more time for meetings. In addition, time in the air is more productive. You can freely talk about the deal in the air, versus on a commercial jet you need to be careful because other people can overhear.
With an entire deal team flying on the same schedule, the cost differential between private jet and commercial becomes negliable. The team will be paying full fare for the commercial flight to accomodate last minute schedule changes (and most of this will be billable to the client). In addition, if schedules do change, you may not be able to get enough seats on the next flight for the entire team (think of how full today's planes are), let alone be able to sit with the client and build the relationship.
Levels who travel: C-level, MDs on roadshows, and the deal team, could include a role as junior as an analyst. (who's job it is to babysit the deal team)
Don't know of anyone in my group that takes private jets around at their own expense. Most still fly commercial, espeically in this economy. Most senior bankers get paid mostly in stock, financial stocks aren't doing great, you can do the math...
Air Travel in America, continues to sink to new lows. Similar to the domestic auto industry burdened with huge unionized health care costs, high cost of oil and a weakening consumer, the airline industry is in need of a dramatic reorganization.
HF Private Jet (Originally Posted: 04/04/2014)
I have to shop a private jet for the boss.
New / used? How many passengers? G550's are pretty sick and can be found under $30m (my buddy's fund picked two up last year)
If this is the first jet for the bossman I would recommend joining a jet share club for a few months so he can "test drive" several different brands and sizes before purchase. Then he will have a much better idea of the type of jet he really wants as well as a better idea of the best configuration for him.
Also, don't be afraid of used jets. Interiors can be redone to suit the new owner, and he can save a ton of money.
Ahahah great.
cool
787 - but not one with too many miles on it, ew.
Jet noob. Hours not miles.
Nice questions you have here - things I did not think about.
How would you go about reselling it - without landing it somewhere in Africa, I mean.
I heard there is a Boeing 777 floating somewhere in the Indian Ocean right now. If you find it you can probably keep it.
LOLLL
Just pulled the Plane Fax on that one. OP probably did a stint in a maritime coverage group, but he'd be way in over his head with that one.
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