2 weeks ago
General Electric executives did not tell the company’s board about its regular flying of a spare business jet for its CEO until this month, reports The Wall Street Journal. They also did not tell directors that General Electric had received an internal complaint about this practice several years ago.
The Wall Street Journal reported on Oct. 18 that former Chairman and CEO Jeff Immelt had an extra aircraft follow his corporate jet on some overseas trips. GE management then informed the board of the practice. Immelt was CEO for 16 years, and this practice continued for much of his tenure.
The company told GE’s directors that the practice had been reduced in mid-2014 and was limited to isolated situations such as travel to risky destinations, according to The Wall Street Journal. Immelt, meanwhile, told the Journal that he also did not know the spare plan was flying.
Immelt stepped down as GE chairman after resigning as CEO. His successor, John Flannery, decided to ground the company’s fleet of corporate aircraft as part of general cost-cutting moves, reports the Journal.
The two-plane trips continued until at least this past spring, reports the Journal. GE shares have fallen more than 33 percent this year, reports the Journal and investors are preparing for a potential cut to its dividend.
According to the Journal, a GE spokeswoman said, “This practice, which GE has discontinued, involved business-critical itineraries with tight schedules, multiple international stops and, in most cases, security concerns.”
The Journal reports that Immelt wanted a backup jet while CEO in case of any issues that could lead to delays. Flight crews were told to not openly talk about the backup plans, and the Journal writes that sometimes there would be passengers listed on the second plane even though seats were empty.
According to the Journal, the extra plane added about $250,000 to the cost of the round-the-world trip, based on an estimated hourly cost of $6,500 to operate each Bombardier, according to Conklin & de Decker, an aviation-consulting firm.