The Corporate Jet Under Pressure

A great example of supply and demand + sources of finance, all rolled-into one…

The Guardian reports how US businesses are under pressure to abandon the use of corporate jets as part of cost and cash-saving measures in the downturn. For some, such as the cash-strapped automotive companies like Ford, the disposal of the fleet of corporate jets is a condition of receiving the state bail-out.

Prices of used corporate jets have fallen by around 15% in recent months. Whereas previously there was excess demand in the market, the forced or “firesale” of many jets has created excess supply in the market.

The use of corporate jets by senior executives has traditionally been justified on two grounds:

- Productivity (management can stay focused on running the business rather than queuing with the rest of us at Gate 46
- Safety

It looks like the departure gates might soon be a little busier as we all jostle for a chair and an internet connection awaiting the flight…