Maybe General Motors Corp. should throw in a fleet of Cadillacs. The auto maker is dumping its corporate jets into what some participants say is the worst market they have ever seen.
“The jet market stinks,” said Richard Santulli, chief executive of Netjets Inc., the private jet firm owned by Berkshire Hathaway Inc., the holding company of Warren E. Buffett.
To control costs, firms including Citigroup Inc. and Time Warner are selling their jets. Alcatel-Lucent has allowed leases on two jets to expire and has put its third jet up for sale.
Jet brokers say the market has constricted in recent months. “Our inventory is up dramatically, and demand is way down,” said Josh Messinger, of J. Messinger Corporate Jet Sales Inc., a jet broker.
For business jets, carrying costs are high—a Gulfstream 550 costs about $47 million. The corporate side of the business is particularly vulnerable. “They are not going to do employee layoffs and keep the jets,” said Mary Hevener, a tax adviser at Morgan Lewis and Bockius.
©2008/The New York Times