Corporate Jet Business Struggles With Bad Image

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On a recent weekday afternoon, a business jet landed at one of two private air terminals in Washington's Dulles International Airport. About half a dozen passengers climbed out, two of them talking on cell phones, and proceeded to the terminal.

John Meehan, general manager of Landmark Aviation, which operates the terminal, watched.

"We've been here, what, about two minutes? Now the bags are loaded. They're walking through. They're going to be in their cars and gone in about five minutes," Meehan said.

That efficiency illustrates the exact point of having a business jet. But the industry is hurting, in many ways worse than ever before.

"People are genuinely afraid for their jobs," Meehan says.

Meehan has had to lay off workers, and says he has friends in the industry who have also been laid off.

Business aviation goes through cycles. An analysis by JPMorgan says that corporate profits peaked in 2006, and corporate jet deliveries peaked in 2008 — right on schedule.

Then the recession dried up the credit needed to buy new planes, as well as the commerce to justify so much business travel.

But Meehan and others say a third factor is involved.

Landmark at Dulles gets a lot of travelers heading to Capitol Hill or federal offices downtown. Meehan says traffic is off by 25 percent from one year ago.

"We're hearing stories that people are very concerned about flying to Washington, because of the potential for being targeted by the media and the politicians," Meehan says, referring to the spotlight on auto executives who were faulted for flying to Washington on corporate jets to ask for government funds.

When the government rescued GM and Chrysler, the companies had to close their aviation departments. Congress almost took the airplanes away from Wall Street and the banks in the TARP bailout. The White House pushed Citigroup into canceling a new jet.

Even companies that don't get a penny from Washington are dumping their planes, contributing to a glut of used corporate jets on the market.

Mike Boyd, a well-known — and plain-spoken — aviation industry consultant, says his industry is suffering a "congressional and government jihad."

"[I would] call up Congressman Snort and say, 'Stop denigrating my industry and stop lying about it. These are not tools of the devil, these are not tools of evil. Business jets are a very important asset for my company,' " Boyd says.

But that's not the way things work in Washington, where the business aviation industry has two lobbying groups: The General Aviation Manufacturers Association (GAMA) for companies that make planes, and the National Business Aviation Association (NBAA) for those who use them.

Ed Bolen, NBAA president, says auto executives should have defended their use of corporate jets.

"The fact that they didn't explain it left a lot of people to think there must not have been a good explanation," Bolen says.

Bolen says a private jet lets a CEO keep working. The jet has a secure phone and computer, and allows that CEO to do maybe three meetings in three cities in one day.

He says that in this political climate, companies are canceling the jets out of fear.

"If business aviation makes sense — and it clearly did when they ordered the airplanes — then it makes sense to move forward and keep those planes," Bolen says.

All of the industry's flagship companies — Gulfstream, Hawker Beechcraft, Dassault and Cessna — have cut production and jobs.

"Just among the GAMA members, we have about 144,000 [U.S.] employees represented. We've already lost about 12,000 jobs over the past six months," says Paul Feldman, who oversees lobbying for GAMA.

So the two associations tackled the problem the Washington way: with an image fix. The "No Plane No Gain" campaign includes an ad tailor-made for the Sunday talk shows.

"What if one industry could generate millions of manufacturing and service jobs right here in America, one industry offering hope & economic opportunity to small towns?" the ad asks.

But on Capitol Hill, nobody is embracing the image that corporate jets have right now. Rep. James Oberstar (D-MN), chair of the House Committee on Transportation, says too many planes have been misused.

"[When] corporate executives use the company aircraft for personal business, I think that rubs the public the wrong way," Oberstar says.

And Oberstar is one of business aviation's best friends in Washington.

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