For Busy Executives, Private Jets Are Best Way to Fly

Source: The Chosun Ilbo    Author:    09/20/2007

Subject Concerned: Aircraft   Opinion   Airlines   

In one week last October, SK Group chairman Chey Tae-won traveled to Beijing, Hanoi and Ho Chi Minh City aboard a rented 14-seat Gulfstream G-IV jet. By using the private aircraft, Chey was able to fly on his own schedule. Private jets can also save time at customs and immigration since those procedures are handled on the aircraft. They are even more useful when commercial airlines offer no direct flights to a destination. Some business jets are equipped with conference rooms and cutting-edge communications systems allowing executives to work as they travel.

Samsung Group owns three private jets and has used them more than 100 times this year. "When Samsung Electronics holds investment presentations in the U.S., it takes one week to tour major cities by private jet while it would take 20 days by commercial flights," Samsung said.

Jets taking off with businesses

More and more global corporations are using private jets, although in Korea only Samsung and Korean Air own them. Other large corporations including LG Group are considering buying them.

It costs about W5 billion (US$1=W926) a year to buy and maintain a Boeing 737 capable of flying from Incheon to L.A. First class round-trip flights between Incheon and New York cost W10 million while Incheon-Frankfrut costs W9 million. Therefore, for large companies that frequently send executives overseas, buying a private jet can actually save money. The jets also allow companies to save time and reduce executive fatigue.

Boeing has sold around 150 business jets since it debuted its first in 1996. The company sells about 10 business jets per year despite price tags that range from US$53 million to US$69 million and high upkeep expenses. Demand is so high now that buyers have to wait five to seven years before delivery. Meanwhile an increasing number of businesses are renting private jets. Korean Air rents out its business jet to other companies when it's not using it. "Last year, one company a month rented the private jet. This year, the figure doubled," said Korean Air.

Twice as much as first class

Privates jet are doubly useful when there are no direct flights, when an executive has to visit several regions on a single trip, or when schedules are tight. Thanks to a private jet, Samsung Group chairman Lee Kun-hee was able to visit several cities in Europe, China and South America to support Pyeongchang's bid to host the 2014 Winter Olympics.

Among Samsung executives, Samsung Group vice chairman Yoon Jong-yong has flown overseas most frequently by private jet, at 59 times. When Hyundai Kia Automotive Group chairman Chung Mong-koo visited Yancheng in China's Jiangsu Province to attend a completion ceremony for a Kia Motors factory, he traveled aboard a rented jet since there was no direct flight.

It costs W4 million per hour to rent Korean Air's jet, although discounts are offered for overnight stops. To fly 10 people to Bangkok, Thailand, for a two-day trip on Korean Air's private jet, it would cost W55 million. That's more than twice as much as the W24 million it would cost for 10 first class tickets to Bangkok. But companies that use the private jets say they can travel on their own schedules and save time for busy executives. Meanwhile, Samsung, Hyundai Motor, POSCO, LG, SK and Korean Air own private helicopters.