In Defense of the Corporate Jet

If you're in the market for a private jet, now might be a good time to buy.

Many companies, especially those receiving federal bailout bucks, are dumping the expensive toys amid public relations gaffes and depleted bottom lines.

Starbucks (SBUX) plans to sell 2 of its 3 corporate jets, including a Gulfstream 500 acquired in December for about $45 million. The announcement follows the company's decision to close about 300 poorly performing stores, including 100 outside the US, after same-store sales fell 9% in the final 3 months of 2008. Starbucks put its plans for world domination on hold last summer when it revealed plans to close 600 stores.

Citigroup (C) needed a kick in the pants before dropping plans for a $50 million private jet. The company's stock price is about $4.06 a share and it accepted $45 billion in taxpayer funds to stay afloat. You'd think the low stock price would be enough to force Citigroup to rethink its plans to acquire a new private jet, but it took yowls about the federal bailout to convince the company to dump the deal.

The classic bonehead play goes to the CEOs of General Motors (GM), Ford (F) and Chrysler who forgot to brush up on their poor-boy act and flew to Washington in private jets to beg Congress for a $25 billion federal bailout.

All this has given the corporate jet a bad name. Never mind that private companies used private funds to buy the fancy planes when times were good.

The reality is, time is money. This creates a plausible explanation for the corporate jet: It saves travel time and reduces the hassle for top executives. This will drive egalitarians nuts, but a company's Top Dogs are more important to its long-term success than the grunts and it therefore may be important to avoid the routine delays common in commercial aviation.

A private jet also creates a relaxed place to conduct business while proclaiming the company's success and power. Assuming Uncle Sam doesn't suck up all the capital in the universe, dynamic companies will expand in the future and their CEOs will again be in a hurry to survey their domain and close deals. Crank up the Gulfstream!

Finally, when the economy does rebound, they'll have an incomparable status symbol, one that's sure to wow secretaries as they jet off for an illicit weekend in the Virgin Islands.

You don't have to be Siggy Freud to figure out the link between status and, you know, sex.