Congress: Friend or foe to the private jet industry

Some months ago, Congress had a field day with the auto executives for flying to Washington in private jets. Granted, this was not the smartest thing to do, and a more prudent approach in seeking bailout funds would have been wise. The incident, however, opened the door for Congress and the administration to go after every business that owns and/or hires private jets for business purposes. Furthermore, it created an instant backlash with sales orders for private jets falling substantially.

Then, a few months after reprimanding the auto executives for the use of private jets, Congress approved a tax break in the stimulus package to encourage businesses to buy private planes. Better known as accelerated depreciation, this tax break drastically reduces the up-front tax bill for companies who purchase assets like business planes. Again, mixed signals generated mixed emotions.

Richard Aboulafia, vice president, analysis, and aviation consultant for the Teal Group, feels that the industry needs a stronger economy, not a tax break to recover. "People and companies buy jets when they need new planes and feel good about the economy. If they don't feel good about things, a tax break isn't going to help," said Aboulafia. Yet, other industry trade groups didn't see it that way. They believed a tax break would spur purchases and provide enough incentive to keep customers from cancelling purchase orders.

Most recently, in its usual cool, calm and collective manner, the House Appropriations Committee neatly tucked a fatty piece of pork into a $636 billion bill to fund the Department of Defense (DOD) for the next fiscal year. However, when an additional $550 million of DOD spending became public, the Pentagon openly stated that it did not request and did not need that many planes.

According to the Appropriations Committee, the addition of the four new jets was meant to compliment the Pentagon's request for four new planes to replace aging aircraft. But the coup de theatre appeared in a recent Wall Street Journal story when Ellis Brachman, a spokesman for the House Appropriation Committee, said the changes were part of "Congress's normal oversight responsibility" to make sure "the troops have everything they need." Yet without much of a debate, the chairman of the Appropriations Committee, Democratic Representative John Murtha of Pennsylvania, said the plan to buy the four additional aircraft will be dropped if the Pentagon doesn't want them.

So the question remains, were these additional planes really meant to support our troops, or to support the Congressional lawmakers who spent approximately $13 million dollars of taxpayers money last year traveling the world and bringing their spouses at no cost when traveling on government jets? According to a Wall Street Journal analysis, House members spent about 3,000 days overseas last year, which is up from about 550 days in 1995, when travel records were first made available electronically.

Could it be that Congress once again got caught with its hand in the cookie jar and needed to reverse direction in order to save face while they were trying to purchase four private jets for their personal use? I'm not sure if Congress is helping or hindering the private jet industry. And I really don't believe the additional $550 million was intended for our troops.

As always, your thoughts are welcome.