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WASHINGTON - Crusaders against inequality are accusing the private jet set of flying high at the expense of the environment, the national air traffic system, and lower-class taxpayers.
"The private jet is one of the most powerful symbols of extreme inequality," research and advocacy groups Institute for Policy Studies and Essential Action say in a new report denounced by the business aviation industry as a "political screed" riddled with inaccuracy.
The super-rich breeze through congested airports and luxuriate in their own aircraft while the general public contend with long queues, degrading security procedures, and increasingly costly and uncomfortable flights, say the authors of the report, "High Flyers".
"This sharp division is not merely a symbolic matter," they say.
Ordinary taxpayers and commercial airline passengers subsidise the booming private aviation industry, they add.
As evidence of the boom, they note that the number of private jets plying U.S. skies increased tenfold from 1,000 in 1970 to 10,000 in 2006 and that the figure is set to double again by 2017. These figures suggest the rate of growth is moderating but the report says private jets continue to outrace growth in airline travel.
Even as they take off in increasing numbers, it adds, "Private jet travelers don't pay their fair share of the costs associated with air traffic safety." An airliner flying from New York to Miami would pay 2,015 dollars in taxes but a private jet flying nearly the same route would pay only 236 dollars while incurring similar air traffic control costs.
The authors, citing Federal Aviation Administration (FAA) figures, say that commercial aviation pays 95 percent of total air traffic control costs although it uses only 73 percent of the FAA's services.
In contrast, "general aviation -- the segment of the industry that includes corporate jets, charters, air taxis, and recreational pilots -- uses 16 percent of the services but pays just three percent of the cost," says the report released Tuesday.
The groups also are irritated that elite vacation destinations -- California's Napa Valley, for example, and Colorado's mountain resort of Aspen -- have consumed what they see as disproportionate amounts of federal funding for airport improvement.
In 2005-2007, these and other remote airstrips garnered 2.2 billion dollars of 7 billion dollars in taxpayer money earmarked for such purposes, says their report. The authors provide no details of where previous rounds of funding were spent.
Adding to the tax bill, the economic stimulus package passed by Congress and signed by President George W. Bush earlier this year hands private jet owners the option of claiming an enhanced portion of the cost of each new jet in the first year of ownership. This is known as "accelerated depreciation" and remains a controversial plank in the administration's recovery platform, with many experts assailing its effectiveness in stimulating job creation through business expansion.
Then there is the environmental cost. The report says that each of four passengers flying a Cessna Citation X business jet between Los Angeles and New York emits about five times as much carbon dioxide as one of an unspecified number of passengers on an unspecified type of commercial airplane on the same route. Scientists say carbon dioxide is a major culprit in global warming.
The report acknowledges that private jets often provide the only link to remote communities beyond the reach of the woefully limited hub-and-spoke routes flown by major commercial carriers. It suggests, however, that high-speed rail would constitute an environmentally prudent alternative that even ordinary travelers might be able to afford.
The authors further recommend heavier taxes on the ownership and use of private jets, and measures to charge private jet users for the carbon dioxide they spew into the atmosphere.
The report echoes criticisms made by commercial carriers who have lost premium passengers to rivals in the business aviation industry. For this reason, says the National Business Aviation Association (NBAA), it should be dismissed.
"This report is 30 pages of nothing but outrageous claims and the warmed-over rhetoric used by the nation's big airlines," says Ed Bolen, the NBAA president. "It is unfortunate that at a time when businesses are struggling and communities are losing air service, we see political screed masquerading as a policy report."
Bolen highlights "inaccuracies and distortions" in the document.
Industry flight hours have remained roughly constant despite the report's claim that travel has expanded dramatically, he says.
All significant capital equipment, regardless of industry, is eligible for accelerated depreciation, contrary to the report's inference that private jets won an exclusive tax break under this year's economic stimulus package, Bolen adds.
And closer inspection of the FAA data on which the report bases its claim that U.S. passenger airlines pay 95 percent of all air traffic control costs reveals this to be untrue, according to the NBAA.
The numbers in the report conflate data for U.S. and foreign carriers of passengers and cargo, the trade group says. Were the figure limited to U.S. passenger carriers -- a more direct and realistic comparison, it says -- then this would show commercial carriers actually foot 77 percent of the bill.
The details appear destined for further debate. The commercial and business aviation industries are lobbying to influence legislation pending in Congress.
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). (See: https://ips-dc.org/high_flyers/
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 "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.
