It's been a long, tough haul for Mr. Top Executive. He's spent decades scrambling up the corporate ladder but he's finally made it - he now has the three most coveted letters in business attached to his name: CEO.
When he travels, he flies first class, which is nice, but the trouble is, his best buddy, the one he plays squash with every Wednesday morning and golf at the country club on Saturdays, has his own private jet!Until Mr. T.E. can pick up the phone and tell his administrative assistant to alert the pilots (you need two) to warm up the Lear (or Gulfstream, Citation, Falcon, among others), he's still one rung short of the pinnacle.
Time to do some serious schmoozing with the board of directors, he decides. He's just gotta have his own airplane.
That scenario sums up the way many people view corporate aviation. In their minds, it's all about status and perks for the people in the executive suite.
But it's a bum rap, say those whose companies actually use private planes on the job. Business aviation, they contend, is not about executive junkets. It's about leveraging management time, shuttling employees between company facilities, bringing in customers, staging sales and marketing blitzes, doing charitable work and public relations.
Whatever the motivation, the lure of the company airplane, particularly a jet, is taking off. After spending the 1980s and early '90s in the doldrums, the business jet market is currently enjoying a growth spurt.
According to Aviation Weekly, 337 business jets were sold in the United States in 1995. That figure moved up to 352 in '96, more than 400 in '97 and is expected to reach 420 jets worth $5.4 billion this year.
Utah is getting its share of that action, assures Barry Banks, aviation planner for the Wasatch Front Regional Council.
"I think aviation growth in Utah is right about on par with the national growth rates," said Banks, who covers the 13 Wasatch Front airports, including Salt Lake International, which account for about 80 percent of the active private planes in the state.
At a little less than 1 percent a year, the growth of business aviation in Utah is currently below the state's population and economic growth numbers, but Banks expects it to move up a bit by 2002, to around 1.5 percent a year.
According to a 1994 census of civil aircraft, there were a total of 1,975 general aviation aircraft in Utah of which 41 were two-engine jets and 23 were three-engine or more. Banks believes there are now 47 business jets based at Salt Lake International alone, but the number is not cast in concrete.
"Part of the problem in counting jets accurately is they tend to move around a lot," he said. "Owners are constantly buying, selling and trading and they are often in and out of service. It's hard to pin down, but I'd say we're pushing 100 corporate jets statewide."
If turboprop planes (jet engines turning propellers) are included, that jibes with figures published in December by the National Business Aviation Association.
According to the NBAA based in Washington, D.C., there are 93 turbine-powered business aircraft based in Utah of which 28 are classified as "heavy" jets (such as the Gulfstream IV); 16 are "medium" (such as the Cessna Citation III); and 28 are "light" (such as the Learjet 35A).
Of the turboprops, the NBAA says Utah has one heavy (such as the Gulfstream I); 16 medium (such as the King Air 200); and 28 light (such as the TBM-700). There are also 52 twin-turbine and 72 single-engine helicopters.
The growth of corporate jets in Utah tends to be uneven, said Monte Yeager, state aeronautical planner for the 45 airports outside the Wasatch Front.
"For example, two years ago there were no corporate jets based in Logan and now there are five and a sixth coming in this summer," said Yeager, who also is executive director of the Utah Air Travel Commission.
Is the growth in corporate aviation really about fueling executive egos? Yeager doesn't think so.
"To these business people, time is money, and having your own jet means you don't waste a lot of time at airports. For those who can afford them, they have the versatility to save a lot of time."
Salt Lake-based Huntsman Corp. has two corporate jets, a Gulfstream III and Gulfstream IV. Don Olson, spokesman for the privately held chemical company, said the planes have little to do with status but a lot to do with efficiently operating the company.
"The G-3 is used almost exclusively for humanitarian and charitable work, helping support the institutions we believe in, and the G-4 is used almost exclusively for business purposes," said Olson.
"It would be impossible to run this business without the plane. They don't build petrochemical plants in metro areas. Our facilities are extremely hard to get to."
Kevin Christopherson, chief pilot for Midstate Consultants Inc., a telecommunications engineering firm based in Nephi, agrees with Olson. He says Midstate views their Sabreliner corporate jet as a valuable business tool that boosts the bottom line, not executive egos.
Like Huntsman's chemical plants, most of Midstate's clients are located in rural areas not accessed by commercial airlines. Before buying the plane, said Christopherson, Midstate's sales and engineering staff would spend three days in air travel, driving to airports and job sites and then staying overnight just to hold a two-hour meeting with a customer. Now they can do that in a single day.
Before buying their own plane, Midstate was spending $350,000 a year on commercial airline tickets, said Christopherson. That sounds like a lot, but the private jet costs more. Still, he says, you have to look beyond the raw numbers to assess whether it's worth it to your company.
In addition to the cost of buying the plane and paying the pilots salaries, aircraft need service and maintenance almost on a weekly basis. The key, he said, is to figure in the added production of em-ploy-ees.
"When you add up the costs of people being able to do in one day what it used to take three, it starts getting pretty close" to the cost of traveling via commercial airliner.
The initial outlay for a corporate jet is the biggest hit, of course. Banks says the cheapest new jet he knows of is Raytheon's Premier One, a largely composite plane that holds seven people and is due to be priced at $3.9 million when it becomes available later this year.
From there, prices move up fast. A Gulfstream IV will cost in excess of $20 million, depending on options and avionics, but even that is reasonable compared to the top-line Airbus and Boeing business jets now in development that will seat 100-plus depending on their configuration.
Those corporate behemoths won't be much different than small airliners (the Boeing business jet is a 737 derivative), and have the multimillion-dollar price tags to match. The Airbus is scheduled to come into service by spring, 1999, and the Boeing will be certified later this year.
There is a less expensive way to corporate jetdom, of course, buy a used plane. Midstate Consultants owned a 1965 Hawker before they sold it and bought the Sabreliner in November, a 1969 model.
That may sound like buying trouble to people who would never dream of buying a used car, but airplanes are not cars, notes Christopherson. Planes are constantly maintained and updated.
"There's hardly any difference between a '69 and the newest models," he said.
According to the NBAA, the average business jet is 15 years old; the average turboprop is 17 years old, and the average helicopter is 18 years old. Planned obsolescence has apparently not hit business aviation.
Is safety an issue for corporate aviation? The NBAA says turbine (jet) powered aircraft flown by two-person professional crews have a safety record "comparable to or better" than scheduled airlines.