High Flyers and Soaring Inequality
by Robert Weissman / July 2nd, 2008

Private and corporate jet sales are taking off, reflecting an increase in
the extreme concentration of wealth in the United States and around the
world.

Worldwide sales of private jets have more than doubled since 2003, to $19.4
billion in 2007. The number of jets sold increased 28 percent between 2006
and 2007 alone, and sales are up sharply in the first quarter of 2008.
Corporate jet ownership has increased by about 70 percent since the early
1990s. Demand for private jets is so high that a used jet bought in 2006 can
now be sold at a handsome profit.

But where luxury items like a fancy bottle of wine or a Picasso painting are
simply a private extravagance, private jet use imposes real costs on
everyone who isn't a high flyer - and on the planet. The costs are
documented in "High Flyers: How Private Jet Travel is Straining the System,
Warming the Planet and Costing You Money," a new report issued today by the
Institute of Policy Studies and Essential Action (an organization I direct).

Soaring private jet use reflects and is emblematic of skyrocketing wealth
inequality, in the United States and globally. Private jet sales grew in
parallel with commercial air travel until 1997. Then as wealth inequality
began to ascend to stratospheric levels, so did private jet use.

The rise of a global billionaire class has globalized the private jet
market. The main manufacturers report that half or more of sales are coming
from outside of North America.

Private and corporate jets give the super-rich not just ease and comfort,
convenience and luxury - including an escape from the bothers of security
lines and flight delays - but a way to distinguish themselves from everyone
else. Private jet marketing explicitly emphasizes the elite status and
conspicuousness of this consumption.

And, because the ultra-rich are always eager to distinguish themselves from
the very rich, private jets are becoming more luxurious and expensive.
Boeing's largest business jet costs $67 million. Other companies sell
airplanes that are nearly as costly: Airbus's priciest plane goes for $55
million, while Gulfstream Aerospace's G550 sells for $46 million. A relative
handful of the high flyers set aside Learjets and the like as child toys,
and insist on owning their own personal jumbo jet - Boeing 757s and the
like.

Fueling the take-off in jet use is not just concentrating wealth, but
numerous subsidies. Amazingly, U.S. taxpayers subsidize private jet use and
ownership. Corporate CEOs flying on jets for vacation on personal use pay
personal income tax based on the value of the gifted flight - but the value
is calculated based on much lower commercial airfares. Most startlingly, the
2008 Economic Stimulus Act enables private jet buyers to take a "bonus
depreciation" - allowing them to take larger tax deductions in the first
year after purchase than they otherwise would.

Private jet use is subsidized as well by commercial air traffic. According
to the Federal Aviation Administration, general aviation - the segment of
the industry that includes corporate jets, charters, air taxis, and
recreational pilots - uses 16 percent of the FAA's services, but pays just 3
percent of the cost. Very substantial amounts of federal funds spent on
airport improvement between 2005 and 2007 - $2.2 billion of $7 billion
total - went to small airports that primarily serve private jets. These are
places like California's Napa Valley Airport.

Private jet use is further subsidized through corporate profligacy, at the
expense of workers, consumers and shareholders. Personal use of the company
jet is the most common perk for CEOs of large U.S. companies. The Corporate
Library has found that more than half of 215 companies surveyed allowed or
required - yes, required; it's supposedly a security precaution - executives
to use company aircraft on personal trips, with a median annual cost of
$182,929.56.

Perhaps the worst element of private jet use is the environmental damage.
Burning airplane fuel spews huge amounts of carbon into the atmosphere,
making air travel a significant contributor to global warming. Private jet
travel is far less efficient than commercial air flights, because so few
people are transported on each private jet flight.

Four passengers flying in a private Cessna Citation X from Los Angeles to
New York, for example, would each be responsible for more than five times as
much CO2 emitted by a commercial air passenger making the same trip.

And that's a very generous calculation, given estimates that 40 percent of
private jet flights are empty - as pilots return home rather than sit idle
waiting for a return trip.

At least some in the industry aren't very sensitive to these considerations.
Robert Baugniet, senior manager of corporate communications for Gulfstream
Aerospace told my colleague Jennifer Wedekind that concerns about the
private jet contribution to global warming are "fallacious."

"So if you go in a bus and pump out a whole bunch of CO2 into the
environment, but because you've got 40 passengers on board it's OK?" he
queries. (Answer: Not OK, but a whole lot better.) In the aggregate, says
Baugniet, air travel is a relatively small contributor to global warming,
and private jet travel is a small part of that. So, what's the big deal?

To the extent that private jets are symbols of an economic system gone awry,
remedying the problem will require big picture policy changes - steep wealth
and income taxes and other measures to redress inequality, and comprehensive
policies to address global warming.

But soaring private jet use also demands its own response. Tax breaks for
buying and flying private jets should be ended. Private jets should pay, at
least, their fair share of FAA costs. And a hefty luxury tax should be
imposed on private jet sales and flying.

We shouldn't be supporting the High Flyers in their luxury indulgence. If
such heavy-polluting opulence is to be permitted at all, the super-rich
should pay a stiff price for the privilege.

Robert Weissman is editor of the Washington, D.C.-based Multinational
Monitor, and director of Essential Action. Copyright