““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 ”
You're safe on a business jet
ALL TRANSPORTATION METHODS INVOLVE some risk, but corporate/executive business jets enjoy a stellar safety record, with only one fatal accident since 2007. That's according to statistics on U.S.-registered aircraft from Robert E. Breiling Associates, an aviation-safety research firm. Corporate/executive turboprops have fared slightly worse, with one fatal accident in 2007, two in 2008, three in 2009 and none in the first half of this year.
The lowest fatality rates per 100,000 flight hours belong to corporate/executive aviation and airlines (see chart). Business aviation (generally owner-flown aircraft) ranks next, followed by the charter industry. Note that the charter rates cover everything from single-engine visual flights skirting weather in Alaska to aeromedical operations to jets. The accident rate for the entire general aviation industry is highest, but that category is even broader-it encompasses everything from professionally flown corporate jets to flight training in single-engine piston-powered aircraft.
One segment that has had a particularly impressive safety record over the years is fractional-share operations. This category experienced no fatal accidents from 2007 through the first half of 2010.
Recent Breiling statistics do indicate one worrisome trend. There were 17 incidents in the first six months of 2010 versus 11 in the same period in 2009 in the corporate/executive jet segment, which could be a precursor of increased accidents. For all of 2009, there were 17 incidents in that segment. Corporate/executive turboprop operations saw a much lower incident rate, with four in the first half of 2010 versus one in the same period in 2009.
Safety is a moving target, and aircraft operators recognize that an accident-free history is no guarantee of future results. The aviation industry has recently taken steps to mitigate the risk of flying even further. Under the new Safety Management System (SMS), the operator of an aircraft creates a formal process to evaluate, minimize and prevent risk exposure. Essentially, SMS helps operators create a feedback loop for preventing small risk-taking actions from turning into incidents and accidents. Many airlines, flight departments, charter and fractional-share operations have already adopted SMS programs, and the FAA is planning to make SMS mandatory in the U.S. SMS is already required in many other countries.
You can help minimize your exposure to risk with a few simple moves. One is to communicate your desire that safety be the first priority: let your flight crews know that you'd rather arrive late than take undue risks. You can implement an SMS in your flight department or fly with charter operators that have implemented one. You can also vet charter operators via services like ChartexX/Wyvern and Aviation Research Group's Cheq Online system. To investigate a specific company's accident history, you can use the National Transportation Safety Board's query tool and type the name of the operator in the word string field.