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NBAA Letter to NPR Regarding Marketplace Interview "How to Hide a Corporate Jet"
June 18, 2014
Your recently published opinion piece on business aviation (“How corporate jets fly under shareholder radar”) appears uninformed about the widespread practice of leasing business equipment and the common reporting rules regardless of equipment type – including aircraft – and equally misinformed about federal rules that govern reporting of equipment and services provided to key personnel. Tens of thousands of American companies use general aviation aircraft for business, and many lease aircraft for the same reasons these companies lease other equipment. As for the assumption in the opinion piece of any lack of transparency, it is worth noting that aircraft leases are gathered and reported by the Federal Aviation Administration.
Leasing of aircraft to accomplish business goals is widely practiced – even by commercial airlines – because it often makes economic sense as it 1) frees up capital to provide flexibility for other business investments; 2) can provide end-of-lease terms allowing the company to return the aircraft to the lessor, in order to lease a more efficient aircraft that takes advantage of newer technology; and 3) allows companies to obtain the proven benefits of business aviation on financial terms that may be attractive to the company and its investors.
As for the implication in the opinion piece that leasing a business aircraft somehow skirts federal reporting rules, the Securities and Exchange Commission requires publically traded companies to report personal use of aircraft, and other equipment, including vehicles, proxy statements when specific thresholds are met.
But, perhaps most importantly, the opinion writer looked right past the many good reasons companies rely on an airplane. A business airplane allows employees to turn travel time into productive work time, as people can conduct business en route. The aircraft is also an efficiency tool, that can make multiple stops in a day, reach a community with little or no scheduled airline service, or help an employee reach a client in need of quick response. And the aircraft can help workers pursue an opportunity on a moment’s notice, keeping a company nimble in a fiercely competitive global marketplace.
Regardless of whether a company leases, owns or otherwise uses an aircraft, the federal reporting rules are clear, businesses have an excellent record of compliance and business aircraft are key to success for companies of all sizes, all across the U.S.
President and CEO
National Business Aviation Association