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Bank Of America Clips Some Wings

Associated Press file photo (2007)

During the beginning of the ongoing financial crisis, many companies kept using their corporate jets, but the practice has lost favor.

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The Associated Press

Published: February 5, 2009

CHARLOTTE, N.C. - Bank of America Corp. said Wednesday that it is selling nearly half its corporate aircraft as it acts to scale back costs.

The Charlotte-based bank joins Citigroup Inc. and other companies in cutting back private jet travel.

Many financial companies are giving up the perk as scrutiny mounts over lavish spending after the companies received billions of dollars in rescue money from taxpayers.

Since October, Bank of America has received $45 billion in government assistance, including a $20 billion injection in January to help with its troubled Merrill Lynch & Co. acquisition.

"As part of an ongoing cost reduction effort, we have been scaling back on our use of corporate aircraft, including selling three aircraft we own and the Merrill Lynch helicopter," Bank of America spokesman Scott Silvestri said. He declined to say how many planes the bank owns.

Federal Aviation Administration records from 2008 show that Bank of America is the owner of nine planes, including four Gulfstreams. The company acquired brokerage Merrill Lynch & Co. in January.

Chief executive Ken Lewis' corporate jet use in 2007 cost $127,643, according to a March 2008 filing with the Securities and Exchange Commission. Silvestri declined to say whether the bank requires Lewis to use company jets for business and/or personal use.

On average, a cross-country trip in a midsize jet costs about $20,000 for fuel. Maintenance, storage and pilot fees put the cost far higher.

Corporate jets, in many cases, serve a valuable purpose, said Bert Ely, a longtime banking analyst in Alexandria, Va.

"They are offices in the sky," Ely said. "They all say it's for security purposes, and while true, corporate jets also represent a significant costs savings for executives. Time is money."

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