GE cuts jets as new CEO pushes $2bn savings plan

 21 Sep 2017 - 0:00

GE cuts jets as new CEO pushes $2bn savings plan
GE Chief Executive Officer John Flannery, who took over for Jeffrey Immelt last month, is considering all options as he seeks to shore up earnings and reverse this year’s biggest stock slide on the Dow Jones Industrial Average.

Bloomberg

New York:  General Electric Co’s cost-cutting plan is claiming a high-profile victim: use of the corporate jets.
Gone are the days when the manufacturer would hand top executives the keys to its fleet of private aircraft. Starting Wednesday, flights on corporate planes will be scaled back and replaced as needed by charter services, the Boston-based company said.
The straitened approach to air travel is part of GE’s plan to eliminate $2 billion in expenses by the end of next year, a target the company agreed to in March after talks with activist investor Trian Fund Management. GE Chief Executive Officer John Flannery, who took over for Jeffrey Immelt last month, is considering all options as he seeks to shore up earnings and reverse this year’s biggest stock slide on the Dow Jones Industrial Average. GE, like many other large businesses, requires its chief executive to use the company’s aircraft both for business and personal travel for security reasons, according to its proxy statement. Immelt tallied up $257,639 for personal trips in 2016, his last full year on the job. That figure doesn’t include business travel. During the last three calendar years, top managers spent a combined total of $1.4 million on personal trips on company planes, according to data compiled by Bloomberg.
GE, which manufactures jet engines, owns six corporate jets and two AgustaWestland helicopters, according to Federal Aviation Administration records. The company has three Challenger 600s and two Global 5000s, which are all made by Bombardier Inc. It also owns a HondaJet, a light plane for which GE developed the powerplant.
GE has an equity share of five corporate aircraft, including three Gulfstream planes, that are owned by fractional jet operator NetJets Inc., a unit of Warren Buffett’s Berkshire Hathaway Inc. The remaining two of the five fractionally-owned planes are an Embraer SA Phenom 300 and a Cessna Citation Excel, FAA records show. Under an agreement signed with Massachusetts and Boston last year, GE was granted access to parking for an executive jet and helicopter at Logan International Airport and a hangar site for six corporate planes at Hanscom Field.