““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 ”
A compelling alternative to buying a new jet
an't wait for that new jet with the far-off delivery date? For less than the cost of most new models, you can purchase a previously owned Learjet with a comfortable new interior, fresh paint, long-lasting powerful engines and outstanding performance. There is at least one drawback-higher fuel consumption. But the price difference between a new jet and the refurbished Learjet can help pay for lots of fuel.
About 500 of the Learjet 24s and 25s manufactured between 1966 and 1982 remain in service, and plenty are on the market. Moreover, a small company in Denison, Texas, offers a simple way to buy and operate one.
Best Jets, founded by long-time Learjet pilot and teacher Roger Humiston, not only refurbishes the entire airplane, including paint and interior, but also operates an overhaul shop for the jet's engines. In fact, this shop is the only civil jet engine overhauler in the U.S. that can modify the Learjet's General Electric engine in a way that doubles overhaul intervals, thus dramatically lowering operational costs. Best Jets also offers an aircraft management service that provides flight crews (the Learjet is a two-pilot airplane) and oversees maintenance so owners don't have to worry about operational details.
Humiston's wife, Kate Woolstenhulme, designs the interiors, which feature Townsend Leather seats, Lou Martin window shades, handmade New Zealand wool carpeting, cool-running LED lighting and smooth composite panels that add volume to the seven-passenger cabin. A typical Best Jets cabin features a two-seat forward-facing divan in the rear, two aft-facing seats, a side-facing seat on the right side, one individual forward-facing seat aft of the entry door and a lavatory seat.
The Learjet 25's 259-cubic-foot cabin has something that many smaller jets lack: a chair that doubles as a toilet, mounted opposite the main entry door at the front of the cabin (see photo on page 50). And to replace the skimpy privacy curtains, Woolstenhulme designed a pocket door that isolates the lavatory from the main cabin. Another door seals off the opening into the cockpit, so passengers who need to use the facilities are afforded complete privacy. The pocket door bulkhead is thick enough for installation of a flat-panel TV monitor that can be used to show movies or moving-map displays.
Learjets have long had a reputation as excellent performers, and the Model 25 and shorter-cabin Model 24 are competitive with many modern jets. The aircraft was originally certified to FAA Part 25 rules, which mandate relatively large safety margins compared with other small jets during critical operations like engine failure after takeoff. The Learjet also has no life limits on its airframe, which means it can be operated indefinitely, as long as it is maintained. (Airplanes certified under Part 23 regulations do have life limits; when they're reached, the airplane must be either scrapped or assessed by engineers for continued safe operation.)
Best Jets seeks airplanes with 5,000 or fewer hours for its modification program and sells its 21st Century Learjet 25s in Platinum, Gold and Silver versions. The Platinum includes interior and exterior refurbishment, overhauled long-life engines, an engine hush kit that brings the noise level to FAA Stage 3 limits (currently the most stringent noise requirement) and modern flat-panel-display cockpit avionics. The Gold version is the same as the Platinum, but without the flat-panel avionics. Silver editions include all the Gold features except the hush kit (which can be added for $150,000) and upgraded engines.
Not including the airplane itself, Best Jets charges $2.35 million for the Platinum conversion, $1.8 million for the Gold and $850,000 for the Silver. All three include RVSM (reduced vertical separation minimums equipment), which is mandatory for flying between 29,000 and 41,000 feet.
When properly operated and maintained, the Learjet 25 has a good safety record, although it does have a somewhat higher accident rate than other popular jet types (see box on page 50). According to safety expert Robert E. Breiling, the early Learjets "are higher performance aircraft than average and somewhat more demanding of pilot skills." He added that a relatively high percentage of Learjet 23/24/25 series accidents have involved pilots who lacked simulator training.
The choice between a new jet and a more-than-20-year-old Learjet might seem easy, especially considering the higher fuel burn of the Learjet and the warranties that come with the new product. But new-jet order backlogs are long and used Learjets are available almost immediately. There is a strong support network for Learjets, too, and maintenance services and pilot training are still provided at reasonable costs.
As of early September, Best Jets had finished 12 airplanes. The company expects to be refurbishing more at the rate of 18 a year for the next few years. Said Best Jets president Humiston, "There's nothing out there that will do what a Learjet does for the money it does it for."