Comments on: Qwest’s Mueller still flying high… http://www.footnoted.com/perk-city/qwests-mueller-still-flying-high/ Morningstar's guide to what's hiding in SEC filings Fri, 10 Feb 2012 20:24:57 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: nate http://www.footnoted.com/perk-city/qwests-mueller-still-flying-high/comment-page-1/#comment-7634 nate Mon, 02 Mar 2009 22:43:31 +0000 http://www.footnoted.com/?p=3369#comment-7634 If a company like quest owns an aircraft and operates it under part 91 and not 135, they can charge their executives whatever they want up to the total cost, correct? In fact, if they provide the airplane to the executive or anyone else without a pilot, fuel and oil (which the executive would hire/purchase on his own), they can even charge enough to turn a profit, correct? Time sharing is another way to bury the costs of executive perks. If a company like quest owns an aircraft and operates it under part 91 and not 135, they can charge their executives whatever they want up to the total cost, correct? In fact, if they provide the airplane to the executive or anyone else without a pilot, fuel and oil (which the executive would hire/purchase on his own), they can even charge enough to turn a profit, correct? Time sharing is another way to bury the costs of executive perks.

]]> By: JR http://www.footnoted.com/perk-city/qwests-mueller-still-flying-high/comment-page-1/#comment-7555 JR Fri, 20 Feb 2009 04:56:43 +0000 http://www.footnoted.com/?p=3369#comment-7555 While not defending time-sharing agreements, one factor that may be driving them, vs. a market rate charter, is the FAA crackdown on charter operators since the Teterboro crash in 2005; Prior to that, a corporation could use a charter broker, who would charter out to executives and third parties under their Part 135 certificate. After this crash, the FAA changed/enforced their rules, requiring charter brokers to exert full operational control over any aircraft they brokered charter hours for. Corporations who sold off excess capacity to brokers, or sold it to their executives, now had to give up control to the charter broker. Basically in this new environment a company would need to give 24 hours notice to their charter broker just to move their plane from one side of the hangar to another. Selling off 100 hours a year was no longer worth, it, as the hassles of not being able to control your own aircraft were not worth it. Without an FCC Part 135 certificate, which are costly and not easy to get, a company cannot charter its aircraft to anyone - executives or third parties. However, companies are permitted to time share hours with affiliated parties at variable cost, but they can no longer charter their planes to their exec's or others at market rates. I don't write this to defend this practice, but just to note that time sharing at basically variable costs is the choice faced today. You can't charge exec's a market rate, as that would in effect be chartering without a certificate. All of this news about jets should be great for Net jets. Exec's will still fly, it will just be harder to track. BTW on Feb 17 five execs from the Charter operator responsible for the Teterboro crash were arrested on criminal charges. While not defending time-sharing agreements, one factor that may be driving them, vs. a market rate charter, is the FAA crackdown on charter operators since the Teterboro crash in 2005; Prior to that, a corporation could use a charter broker, who would charter out to executives and third parties under their Part 135 certificate.

After this crash, the FAA changed/enforced their rules, requiring charter brokers to exert full operational control over any aircraft they brokered charter hours for. Corporations who sold off excess capacity to brokers, or sold it to their executives, now had to give up control to the charter broker. Basically in this new environment a company would need to give 24 hours notice to their charter broker just to move their plane from one side of the hangar to another. Selling off 100 hours a year was no longer worth, it, as the hassles of not being able to control your own aircraft were not worth it.

Without an FCC Part 135 certificate, which are costly and not easy to get, a company cannot charter its aircraft to anyone – executives or third parties. However, companies are permitted to time share hours with affiliated parties at variable cost, but they can no longer charter their planes to their exec’s or others at market rates.

I don’t write this to defend this practice, but just to note that time sharing at basically variable costs is the choice faced today. You can’t charge exec’s a market rate, as that would in effect be chartering without a certificate.

All of this news about jets should be great for Net jets. Exec’s will still fly, it will just be harder to track.

BTW on Feb 17 five execs from the Charter operator responsible for the Teterboro crash were arrested on criminal charges.

]]> By: KJ Rodgers http://www.footnoted.com/perk-city/qwests-mueller-still-flying-high/comment-page-1/#comment-7550 KJ Rodgers Wed, 18 Feb 2009 16:54:30 +0000 http://www.footnoted.com/?p=3369#comment-7550 This is amazing. How can people still choose to fly as they wish? Think about the company then think about yourself as should a CEO think. This is amazing. How can people still choose to fly as they wish? Think about the company then think about yourself as should a CEO think.

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