Corporate Aviation
In today’s business world corporate
aviation is relied on to move employees, sensitive cargo, etc. There are many critics in the world that believe
corporate aviation is unnecessary and a waste of money. There are many that
believe companies should send their executives and employees via commercial
aviation. What many do not realize is just how vital corporate aviation truly is
to a company. According to No Plane No Gain, “three percent of all commercial
aviation is cancelled and nearly one quarter is delayed.” This can hinder a
corporations schedule if an employee needs to be in another city without delay.
According to public perception, corporate jets only carry high paid executives
to destinations even when the company cannot afford it. However, according to
an NBAA survey, “72 percent of the passengers aboard corporate jets are not
executives.” Corporate aviation helps the entire company to succeed and strive
forward as long as the company uses it for the right reasons.
Corporate aviation also allows
companies to connect to cities that are unreachable by commercial aviation.
There are many companies that have built factories and headquarters in small
towns which are served by small airports and cannot be utilized by large
airplanes. There are many towns across the nation, that are dependent on these
factories to survive. If a company needs to send employees or special packages
fast, they would not be able to without a small jet. Without a corporate jet
they would have to fly into a major city and then have to take a car, sometimes
hours to reach their destination. The hours lost could potentially cause the
company business. Business aviation serves ten times the number of airports across
the U.S. than commercial aviation. Corporate aviation helps the economy by
connecting the corporate world to the five thousand plus airports/communities
that it serves in the United States.
Feeding the public’s negative perception
of corporate aviation, President Obama has stated that he does not believe that
business jet owners deserve a tax break. He stated that “people buying jets
should not deserve an extra tax break when ordinary people cannot afford the
same luxury.” In my opinion this tax
encourages the people who can afford jets the incentive to buy one. If this tax
break is taken away, there will be fewer jets bought which would affect the number
of jets built. This could once again threaten jobs and cause more unemployment.
The NBAA and GAMA have taken the other side and are trying to reinforce the
importance of personal and corporate jet ownership.
The corporate companies use
accelerated depreciation to write of these big purchases at an accelerated
speed. Allowing the company to write a
jet off faster would allow them to save taxes on money earned. This would in
turn possibly allow the company to make other purchase or put money back into
the company where needed. It is part of the stimulus package because it helps
the company and could also create more jobs if the company is able to grow.
All in all, I believe that
corporate jets are a vital part to aviation as well as the business world. As
long as companies do not abuse these luxuries, it will overall help the
economy. Hopefully the general public will one day start looking at the
positives effects instead of only focusing on the few negative cases of
corporate aviation.
References
"Warren Buffet and Business Aviation Facts | No Plane
No Gain." Warren Buffet And Business
Aviation Facts | No Plane No Gain.
N.p., n.d. Web. 13 Oct. 2013.
"Obama Defends Ending Corporate Jet Tax Break."
USA Today. Gannett, 21 Feb. 2013. Web. 13 Oct.
2013. http://www.usatoday.com/story/theoval/2013/02/21/obama-corporate-jets-tax-break-wichita/1935861/
"Accelerated Depreciation." Investopedia. N.p.,
n.d. Web. 13 Oct. 2013.
Kauffmann, Chris. "Aviation Firms Fighting Mad over
Corporate Aircraft Criticism." Widgets RSS. N
.p., n.d. Web. 13 Oct. 2013.
The public’s perception is negatively affecting this industry in no small way, as you pointed out. There is a minority of companies that are abusing their corporate assets and this is what draws everyone’s attention. The industry will need draw less attention to the rare, but publicized, abuse of corporate jets and shift focus to the many benefits this industry can provide. Only then can Obama justify and support tax breaks and accelerated depreciation to these companies.
ReplyDeleteI completely agree with you about how this tax encourages the people who can afford jets the incentive to buy one. Obama wants everyone to be equal but if people stop buying jets then the people who build the jets are out of a job, which is the exact opposite of what he wants. I think if a company can afford a private jet then they should have the freedom to buy one without being taxed to death just because they are more wealthy than the average American.
ReplyDeleteThe benefits you pointed out in your blog are very similar to what the rest of us found. It saves time and hassle, but something that I haven’t seen come up is many intangible benefits that business aviation has. I’ve found articles that talked about the use of jets to conducts business. In the point of a merger having a jet shows power and can help negotiate in your favor, on the same note, your guest cannot leave until something is decided on or you land. Having a jet allows you to hold classified business information meetings while on the go, something you could not do on an airline.
ReplyDelete