The Economics of Private Jets

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  • Published: 16 July 2019
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    Select footage courtesy the AP Archive

    References:
    [1] https://www.census.gov/quickfacts/fact/table/US/SEX255218; http://newflightcharters.com/private_jet_charter_flight_pricing.htm; https://www.charterhub.com/listings/aircraft/for-charter/list/?Mdltxt=G550&Manu=GULFSTREAM&mdlx=exact; https://www.privatefly.com/us/private-jets/longrange-jet-hire/Gulfstream-G550
    [2] https://hbr.org/2018/07/the-leaders-calendar#what-do-ceos-actually-do
    [3] https://www.epi.org/files/pdf/130354.pdf
    [4] https://www.bloomberg.com/opinion/articles/2017-10-31/in-defense-of-corporate-aircraft-no-really
    [5] https://www.linkedin.com/pulse/tesco-wal-mart-private-jets-fabrizio-poli/
    [6] https://uk.flightaware.com/resources/registration/N455DG
    [7] http://www.corporatejetsolutions.com/PDF/Aircraft%20Comparisons/Citation%20VII%20vs.%20Hawker%20700%20vs.%20Lear%2045.pdf; https://awin.aviationweek.com/portals/awin/pdfs/BCAOpPlanningGuide/2012_Production.pdf; https://www.aopa.org/news-and-media/all-news/2015/november/16/hourly-operating-costs-of-45-jets-compared
    [8] https://www.symmetry.com/resources/payroll-news/2017/11/13/how-many-working-days-are-in-a-year
    [9] https://corporate.walmart.com/media-library/document/2019-environmental-social-governance-report/_proxyDocument?id=0000016a-9485-d766-abfb-fd8d84300000&mod=article_inline
    [10] https://www.stratosjets.com/private-jets/bombardier-7500/; https://www.trilogyaviationgroup.com/jet/Global-7500; https://www.privatefly.com/us/private-jets/longrange-jet-hire/bombardier-global-7500
    [11] https://www.economist.com/business/2012/04/14/winging-it
    [12] https://www.eia.gov/environment/emissions/co2_vol_mass.php; https://data.worldbank.org/indicator/en.atm.co2e.pc
    [13] https://www.economist.com/business/2017/02/16/why-bosses-are-flying-more-for-play-not-work
    [14] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=529822

Comments • 3 177

  • Wendover Productions
    Wendover Productions   4 months back

    If you missed all the different announcements, I started a new podcast called Extremities about a month ago. It's all about how and why the world's most isolated human settlements exist, with the first season being on Pitcairn--the 50 person British territory in the South Pacific.
    You can listen to the podcast here: http://ExtremitiesPodcast.com

    • matt jakob
      matt jakob  1 months back

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    • Ferdinand
      Ferdinand  3 months back

      @Tiogshi Laj 
      Right? I miss the old voice. This sounds like he's talking through a thick blanket.

    • Kristian Canoy
      Kristian Canoy  4 months back

      Hi Wendover!! I want to request a video about how airline alliances work. (Star Alliance, SkyTeam and Oneworld)

    • Wubbalubba dubdub
      Wubbalubba dubdub  4 months back

      you could also make a video/podcast about tahiti. our company is shipping a package there from europe for 7€ with dhl, even though it's on the other side of the world from us. the french goverment seems to subsidise shipping cost to french polynesia.

    • Scooters Videos
      Scooters Videos  4 months back

      what this proves is that the rich are @$$raping us and that not paying at least $15 an hour is an outrage deserving of tar and feathers.

  • Bob
    Bob  11 hours back

    You've neglected to mention that the CEO who makes thousands per hour can work in the back of the company jet or hold meetings while enroute. Or the fact that some wealthy individuals use the a/c for a mixture of business and pleasure... because they can! Not a bad video but somewhat short of facts!

    • raykirkland555
      raykirkland555  2 days back

      well i was with him up until he started the global warming shit.

      • Richard
        Richard  3 days back

        In the corporate world time is money, when opportunity knocks or need arrises the early bird gets the deal done, they can always get/earn more money but they can never get time back, Bill Lear understood this. Cost of operation-fuel, maintenance, ownership etc. is written off on taxes to a large extent the rest is just the cost of doing business or of being competitive.

        • theboredbrowser
          theboredbrowser  3 days back

          9:00 is that Matt Guthmiller?

          • George
            George  3 days back

            You forgot the most important savings companies have by flying private. Taxes! The amount of write offs are more then worth it for companies to fly private. These are write offs you can’t have if you fly commercial.

            • James Matthews
              James Matthews  3 days back

              During his time at HSBC in the 90’s, a family friend was involved in evaluating the business case for the company’s corporate jet.
              He told me that the most important factor in his evaluation was not the economics, but rather the effect on his career if he’d have nixed it!

              • Ryan McGowan
                Ryan McGowan  3 days back

                It isn't about the wages of the executive. It's about the profit that the CEO brings to the company. If an executive is only manages increases of $1,000,000 a year, they'd probably be fired. If they can cause just one new store to open, it paid for all the trips that year. Also, you're not including the entire team of people that are on the private jet. There is likely 3 or 4 people on that plane, so divide all those numbers by at least 2.

                • Mark Seifried
                  Mark Seifried  4 days back

                  Your comments and education for the masses is super and accurate. But; you had to ad the fact about toxic emissions. The US is the greatest country in the world. (It sounds like you want us to use horseback for travel because there will be much less pollution.) General aviation is absolutely necessary and worthwhile, even if you have a one person company. A small four passenger propeller driven aircraft can make that manager or salesman a super employee. Why would you do this? America is many times larger than it was 50 years ago and there are millions of more autos. Why not talk about these polluters in another video. Why not talk about people who want less pollution leaving their room a/c's on 68 and many of their lights and TV on for 12 hours while they are away for business all day. This wastes energy and pollutes the environment. Private aviation is a billion dollar industry in the US and around the world. So, you want to shut it down because the jet pollutes the environment. Are you going to talk about cows next? On another note; I wish that I was there when congress grilled the Detroit auto industry about their use of jets when they were asking for bailouts. I would have defended them with great conviction. (Did you know Janet Polosi has a Boeing 757 as her private jet? A much smaller jet would carry her to the west coast but this is what she uses. ) I am in the aviation idustry for 35 years.

                  • Cavaleer Mountaineer
                    Cavaleer Mountaineer  4 days back

                    Nice, intelligent video until you just had to stick your foot in your mouth and talk about CARBON FOOTPRINT. Guess what? ALL THE JETS IN THE WORLD COMBINED OVER THEIR ENTIRE LIFESPAN DON'T LEAVE A "CARBON FOOTPRINT" AS BIG AS ONE SEASON OF LEAVES FALLING FROM TREES, YOU FUKIN IDIOT. How do normally intelligent people FALL FOR THIS STUPIDITY? All animals create more CO2 in one day than all jets and cars in a year. TF is wrong with yall?

                    • James Godfrey
                      James Godfrey  5 days back

                      I used to work at walmart, a buddy (and 10 other employees) got fired for eating a 0.98$ taquito from the deli that was going to be thrown away. The execs flew in to Marquette Mi in their private jets to fire them. He had to write a cheque for .98$ or get charged with larceny.

                      • SuperVt100
                        SuperVt100  1 weeks back

                        Think you nailed it with the first part of your comment. Having an executive back in the same day keep then from burnout.

                        • Anas Iqbal
                          Anas Iqbal  1 weeks back

                          Great video. Awesome voice

                          • J B Campbell
                            J B Campbell  1 weeks back

                            STHU about Carbon footprints. Idiots. Natural Gas pockets around the world spew Millions Of Times the Easter into the air naturally every day than humans do in a year. Great video until the environmental Religious bS’ers showed up.

                            • Das Wars
                              Das Wars  1 weeks back

                              Talking 10 mins doubtful things, while 1 sentence in the comments explains it perfectly. That’s America! 😂😂😂

                              • Liam
                                Liam  1 weeks back

                                As soon as this wendover cuck mentioned climate change I left this comment and never came back.. even if anyone replies I’ll never return

                                • Kamil Grzeszczak
                                  Kamil Grzeszczak  2 weeks back

                                  Haven't these companies heard of Skype and other teleconference software?
                                  It would save them even more time and milions of dollars (if we assume that time of management people is worth the same as their salary, which I doubt).

                                  • lulu mink
                                    lulu mink  2 weeks back

                                    But why can't the TOP executives not simply do a video conference call for almost free??

                                    • sherpaderp dingo
                                      sherpaderp dingo  5 days back

                                      I know a few mid level execs and they say the in person meetings are far more impactful and you get a better picture of what's going on (I.e a store manager will have a harder time hiding something from you if that's their prerogative

                                  • Chuck Tomney
                                    Chuck Tomney  2 weeks back

                                    just got a model of Lear 90

                                    • Stella of the Lake
                                      Stella of the Lake  2 weeks back

                                      Amazing explanation on how everything works!

                                      • B L
                                        B L  2 weeks back

                                        It's too bad Walmart don't value their frontline staff's time as much.

                                        • heavyduty187
                                          heavyduty187  2 weeks back

                                          What if I’m rich and just don’t wanna sit on a plane with a crying kid or stinky people? Maybe I just don’t wanna sit with poor people

                                          • BritAmerica Ball
                                            BritAmerica Ball  2 weeks back

                                            Correction, a Bentonville to Manila can only have a stopover in LA or SFO and take a Philippine Airlines 777 or A350 down to Manila.

                                            Which can only take at most, 20 hour trip plus time change

                                            • Raymond Licon
                                              Raymond Licon  3 weeks back

                                              The only thing I learned is that Walmart pays their management too much.

                                              • Gamerboy360
                                                Gamerboy360  3 weeks back

                                                1:36 A Gulfstream can fly a little bit faster than commercial...

                                                • D Kahn
                                                  D Kahn  3 weeks back

                                                  Time to do one on Hollywood stars and all of their privates jets.... while they all complain about "global warming."

                                                  • Randy Rodabaugh
                                                    Randy Rodabaugh  3 weeks back

                                                    They aren't just saving time and/or money. By being back in the office sooner, it means that they need fewer executives for the same amount of territory. It also means that projects and other decisions aren't delayed by someones travel time. How can you put a price on that?

                                                    • T1Oracle
                                                      T1Oracle  3 weeks back

                                                      Have these people not heard of Skype? Have an employee walk around with a phone and show them everything.

                                                      • Matt Wallace
                                                        Matt Wallace  3 weeks back

                                                        ....also, it's an asset they can depreciate and take off their taxes.

                                                        • Nelson Neuberger
                                                          Nelson Neuberger  2 weeks back

                                                          Yes I can’t believe Wendover missed this. You can’t write off flight tickets but you can write off a jets depreciation.

                                                      • Jon Allen
                                                        Jon Allen  3 weeks back

                                                        Companies that own jets save huge on charter costs. It costs at the absolute most, a little under $6k an hour to run a business jet if it is owned. It is a business expense and therefore not taxed money. When talking about money that they can spend instead of paying taxes, it is almost always worth the expense. And then the time saved as well as ability to still be in conference calls, video conferences, etc...

                                                        • Ayden Lally
                                                          Ayden Lally  3 weeks back

                                                          6:41 a big corporation like Walmart would never fly 19 of there top executives in one private jet lol. Common now, u should know that.

                                                          • Michael Stark Investing

                                                            This video got a lot of assumptions very wrong.
                                                            1. CEOs work MUCH MORE than 2700h/year. Probably 2X
                                                            2. Cost savings are not 55k/3 hours, but (55k-10k)/3hours (the alternative is 1st class, not walking for free, I assume)
                                                            3. It is NOT CEOs who use private jets AT ALL. Rather, it's investors, entrepreneurs, and billionaires who ESSENTIALLY PAY FOR IT BY THEMSELVES anyway


                                                            Picking Walmart is probably the WORST POSSIBLE outlier you could pick for "representing all private jet riders", due to it's special location it the outskirts and specialty needs ;)

                                                            • Mahj
                                                              Mahj  3 weeks back

                                                              1:30 only if the CEO is the only person at the company actually doing something. I reckon that's not the case.

                                                              • I Created An Account For This

                                                                They are just really convenient.

                                                                • Mo biido
                                                                  Mo biido  3 weeks back

                                                                  Guess what Dj khalid works Walmart then 🤔

                                                                  • TMoD7007
                                                                    TMoD7007  3 weeks back

                                                                    You missed the probably most important thing: These jets are flying offices and provide confidential conference during flight.
                                                                    To a degree that even first class flights cannot deliver by far.

                                                                    • dayle
                                                                      dayle  3 weeks back

                                                                      Surely one if the biggest advantages of it would be the massive tax write-offs the company can make with the travel being for business purposes?

                                                                      • ComradeWinston
                                                                        ComradeWinston  3 weeks back

                                                                        another reason guillotines needs to be brought into fashion

                                                                        • sarcasmo57
                                                                          sarcasmo57  3 weeks back

                                                                          I never would have guessed they wee so expensive.

                                                                          • yaiirable
                                                                            yaiirable  4 weeks back

                                                                            Begs the question of why they don't move their office

                                                                            • pendu jatt
                                                                              pendu jatt  4 weeks back

                                                                              CEO is useless

                                                                              • David Sebastianelli
                                                                                David Sebastianelli  4 weeks back

                                                                                WOW which airport has the cool lights @ 1.42?

                                                                                • Daniel Bonner
                                                                                  Daniel Bonner  4 weeks back

                                                                                  Corporate is just an illusion 👊🏿👊🏿

                                                                                  • long business
                                                                                    long business  4 weeks back

                                                                                    Great video until the class warfare carbon foot print nonsense started.

                                                                                    • mike force
                                                                                      mike force  4 weeks back

                                                                                      private jets do not make sense in the modern world. what AMAZING help to the shareholder will occur in the magical 2hr store visit that can't be done with a livestream? or a moving robot with camera and interaction method, so they can go wherever they want in the building? it is no different than explaining why some people "deserve" a $400 steak...it is just the 1% expressing that they are special, and everyone else is dirt. oh, except the few people who find out secrets about company or "executives". they get a nice ride too.

                                                                                      • SuperMarway
                                                                                        SuperMarway  4 weeks back

                                                                                        Tax them down!

                                                                                        • marco brenni
                                                                                          marco brenni  4 weeks back

                                                                                          Boring enough !

                                                                                          • Ryan
                                                                                            Ryan  4 weeks back

                                                                                            I just found out today that my university owns a private jet. No wonder tuition is expensive.