The Advisors' Blog

– Broc Romanek

Recently, I blogged about a 10-minute video about private jets. A member sent this reaction:

Interesting but flawed economic analysis on the private plane video. One needs not to evaluate private jet use by the amount paid to the executive but instead by the value to the company of the executive’s lost time. Presumably on an hourly basis that amount is a multiple of the amount paid to the executive (3x, 5x, 10x?).

In addition to the time lost with security, boarding, check-in, etc., an executive can freely work on a private jet and even conduct meetings while flying with those taken along. So, one needs to take the entire length of a trip from door to door flying commercial, subtract the hours spent flying privately when no work is done and multiply that difference by the value per hour of the executive’s time to the company. That amount should then be compared to the cost of operating the private plane. That said, IMHO private executive use ought to be taxed to the executive at the value of a comparable chartered plane.