Citigroup buys new corporate jet

With your money! I completely get the fact that for some large companies it makes sense to have one – or even a fleet – of aircraft in their stable, but this was not the time for Citigroup to place an order for a new corporate jet.

photo-falcon-jetThe Falcon 7X business jet is a pretty sweet ride, but if they really needed to buy a jet, couldn’t they have purchased a Gulfstream, an American based manufacture?

Going forward with the purchase of this new jet – and selling two jets that are only 10 years old – can only be described as a stupid marketing decision. Even if they say the purchase would save them a million dollars a year, the public will not be happy at all.

Have they ever heard of video conferencing?

From the New York Post

Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet – only this time, it’s the taxpayers who are getting screwed.

Even though the bank’s stock is as cheap as a gallon of gas and it’s burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal. …

Citigroup decided to get its new wings two years ago, when the financial-services giant was flush with cash, but it still intends to take possession of the jet this year despite its current woes, the source said.

“Why should I help you when what you write will be used to the detriment of our company?” replied Bill McNamee, head of CitiFlight Inc., the subsidiary that manages Citigroup’s corporate fleet, when asked to comment about the new 7X.

“What relevance does it have but to hurt my company?”

It’s not uncommon for large companies to pay a deposit on a new plane then cancel the order before delivery, according to a source in the corporate aviation business.

Citigroup execs are also quietly trying to unload two of their older Dassault 900EXs.

Those jets, nearly 10 years old, are worth an estimated $27 million each. They were still listed for sale yesterday on the Web site of Citigroup’s aviation broker, Aviation Professionals.

A company representative said she would not comment on “brokering both sides of the deal” when asked about the incoming Falcon 7X.

The Dassaults are part of CitiFlight’s Gulf Sierra fleet, which includes the two Falcon 900EXs, tail numbers N399GS and N588GS, currently for sale. FAA records show Citigroup reserved a new tail number, N488GS, possibly for the incoming 7X on Nov. 10 last year.

Gateway Pundit also has the story.

6 replies
    • Wayne SW
      Wayne SW says:

      The purchase of this jet originated in January 2008.  Long before Dodd's and Frank's financial leadership leading to the banking crisis was discovered and became public knowledge this past Sept/Oct.  Planes are not purchased thru a drive up window.

      The latest news on this purchase, and in my opinion rightfully so, Citigroup cancelled the purchase contract.  No Jet!

  1. Bill
    Bill says:

    How is this any more egregious than Ms. Pelosi's demand for a transcontinental jet for her trips back to her district?  Did that cause a flap?  Don't the airlines fly regularly from DC to California?

    Public relations aside, should a corporation's capital investment decisions be made by government?  What's next, Social Security recipients only allowed to buy an approved car?  What's the difference in the two?

    • Steve McGough
      Steve McGough says:

      Background <a href="Under the plan, Citigroup and the government have identified a pool of about $306 billion in troubled assets. Citigroup will absorb the first $29 billion in losses in that portfolio. After that, three government agencies — the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. — will take on any additional losses, though Citigroup could have to share a small portion of additional losses." rel="nofollow">here on Citigroup bailout. We – the people – lent them money and many of us did not think it was the right thing to do. It was our capital, we helped them out (under duress) and they go out and order a new jet?

      Your analogy missed by 10 miles. Social Security is our personal money, that we lend to the government and get – in return – a crappy rate of return. That is totally different than the government (the people) providing bail out loans to private corporations.

      As speaker of the House, Pelosi is second in line to the Presidency – after Biden – and with that role, there are specific security concerns that make it not to practical to fly commercial. That said, I'm not sure if press travel with her and if so, they should be buying seats to offset the cost of the flights just like they do on the VC-25 aircraft – 28000 and 29000 – a.k.a Air Force One.

  2. Mark
    Mark says:

    We should get used to this… The Congress is shoveling our money out the door as fast as they can – they blame Bush for not overseeing the TARP program, but they're the fools who voted for it. 

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