AIG Getting the Message on Corporate Jets?
Insurance giant sells two jets, setting 'example for other bailout companies'.
March 24, 2009— -- In a sign that citizen outrage is beginning to have an impact, embattled insurance company AIG has sold two of its luxury corporate jets in the last two months and cancelled delivery on two aircraft, company officials tell ABC News. AIG has received around $180 billion in taxpayer bailout funds.
"As part of a comprehensive expense reduction plan, AIG has dramatically reduced airplane usage and sold several aircraft," said AIG spokesperson Joe Norton.
AIG sold two jets in its corporate air fleet in the last two months, a Dassault Falcon 900EX and a Falcon 2000EX EASy. It has also cancelled a 2010 order for a Dassault Falcon, and was able to transfer the sale of another Falcon to a third party, according to Norton. Norton says the use of corporate jets at AIG is down about 70% from last year.
Indeed, CEO Edward Liddy opted for Amtrak over a G-5 when he went from New York to Washington D.C. last week for hearings on the contentious bonus issue. Liddy also has a home in Chicago and the company says he flies coach when visiting the windy city, upgrading when possible.
"It would be a very good thing for America for these executives to learn to fly coach," said Nell Minow of the Corporate Library, an independent research group.
"It's one small step in a very long journey for them to return to some kind of credibility," Minow said. "In this one area at least they are setting an example for the other bailout companies to follow."
Other CEOs and Companies Grilled Over Jet Use
Other CEOs whose companies received bailout funds have been grilled over their use of corporate aircraft, most memorably the three CEOs of the big automakers who each traveled on their respective private jets when they went to Capitol Hill to beg for taxpayer money to save their ailing industry last fall.
JPMorgan Chase is the latest TARP-recipient to face the public ire over its plans to spend $138 million on two new corporate jets and a new state-of-the-art hangar. The bank insists that no TARP money will be used to pay for the plan.
AIG, however, says it is drastically cutting back on corporate air travel. A new company policy requires that before any employee can travel on a company jet it must be approved by a vice-president and the COO.
AIG currently has two Bombardier Global Expresses and one Dassault Falcon at its hangar in Teterboro, NJ, where the company has had a presence for decades.