““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Campaigning by Private Jet
Before Joe Kennedy bought a Convair CV-240 for his boy Jack in 1959, the iconic image of a presidential candidate on the stump was set on the back of a train.
John F. Kennedy, waving from the steps of his airplane, the Caroline, set the new tone for modern presidential campaign travel in 1960. Poised at the onset of the demanding television era, the well-heeled Kennedy juggernaut is acknowledged to be the first U.S. presidential campaign to depend heavily on private aviation to get the candidate and his entourage quickly and efficiently from one place to another.
It wasn’t, however, the first major political campaign to rely on private air transportation.
“I know this is a really terrible example, but the first politician who discovered general aviation for campaigning was Adolf Hitler,” said Michael Boyd, the president of the consultancy Boyd Group International. In the general election of 1932, a year before he seized power by other means, Hitler eschewed the German rail system and instead was flown from Bavaria to Prussia and points in between to campaign by private airplane.
Today, it’s hard to imagine how any national candidate ever managed to get around any other way.
“What’s the alternative? Commercial air? Bus?” scoffed Rick Colson, president of New Flight Charters, one of many operators that offer campaigns a range of airplanes, from turboprops to regional and large-cabin jets.
Boyd spoke similarly. “If you’re a politician now and you’ve got to get to Williamsport today,” he said, “you certainly can’t afford the time connecting through Chicago by scheduled air.”
Of course, one announced 2012 candidate–President Obama–already has his heavy-metal ride: Air Force One, as well as a backup fleet of military aircraft. There are wildly disparate estimates of how much it costs to fly that splendid customized 747 with “United States of America” on its livery. They range from about $70,000 to more than $135,000 an hour, depending on how maintenance and other costs are figured.
Campaigns of announced candidates must account for private air costs, usually billed at a not-quite-exactly-defined equivalent for comparable commercial air. And in early stages, while a formal candidacy is being weighed and before campaign contributions start piling up, would-be challengers often have access to jets owned, and donated, by rich supporters.
Travel is the second biggest cost for a presidential campaign, after TV advertising, said Marc Ramthun, operations manager at CSI Campaign Travel Services in Albuquerque, which has supplied charter and leased jets and turboprops to a variety of candidates, including Sen. John McCain, Gov. Sarah Palin, President George W. Bush, Sen. Bob Dole, Gov. Michael Dukakis and Sen. Gary Hart.
“In the early portion, you’re probably going to spend $2 million to $3 million on small-jet charter,” said Ramthun, who helped run a frenetic flight operations and logistics center for the McCain and Palin campaigns. “Many start off sporadically, with something like a Lear 35 or a Citation II, an aircraft that basically holds them, their press secretary and their chief of staff–three or four people. In this phase, the destinations are simple, like Iowa, New Hampshire, South Carolina.”
As a campaign barrels out of the summer conventions, “the nominee will generally have graduated to a commercial-sized jet, a 737 or a 757,” at the head of a squadron of aircraft, said Philip Mathews, president of Air Partner, a leading global charter broker. Between conventions and Election Day, a campaign will typically spend $15 million to $20 million on private air travel, Ramthun said.
Candidates now demand that private jets supply not just fast, reliable transportation, but also Wi-Fi and other in-flight communications technology. And given the frantic schedules, usually with five or more stops in a day at a variety of airports, unusual demand can arise.
“We’ve gone into smaller airports that are basically not certified for larger aircraft,” said Ramthun. Innovation is then required. “Working through the FAA, we’ve even rented fire trucks to get one-day certification. Once, we had to rent air stairs and haul them 40 miles on a flatbed truck, just to use one small airport for a stop.”
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