When Warren Buffett, the acclaimed international investor, bought a corporate jet in the late 1980s, he told a colleague that the cost of owning an aircraft seemed to multiply like bacteria.
The colleague disagreed. "He feels it's degrading to bacteria," Mr Buffett told his shareholders. He called his aircraft The Indefensible - a reference to the expense. Within a few years he had renamed it The Indispensable.
Mr Buffett is not the only convert to the virtues of company jets. When Irishman Gerry Robinson, chairman of Granada, the British leisure group, launched a takeover of the Forte hotel company in 1996, he promised to get rid of Forte's corporate jet. Having won, he decided to keep the aircraft. Forte's hotels were scattered around the world, and, like Mr Buffett, Mr Robinson decided the jet was indispensable.
Other executives have needed more persuasion. By the 1980s, business jets had come to epitomise corporate greed, and many chief executives found it difficult to justify them to shareholders and staff. This hit corporate aircraft sales, which slowed to between 200 and 250 units a year.
Manufacturers, sensing the mood, adjusted their sales pitch. When Boeing launched a corporate jet version of its 737 in 1996, it told potential buyers they could slip into airports unnoticed.
But the issue of cost remained. For the $40 million (€37.78 million) price tag on a Boeing 737 corporate jet, an executive could fly from London to New York and back on Concorde every day for 11 years. Flying business class, the executive could make two London-New York round trips a week for 75 years.
Given the cost, how could the purchase of a corporate jet be justified? With layers of management stripped out, the champions of corporate jets said the remaining executives had to work even harder. A company jet could fly them almost to the customer's door, saving time and avoiding strikes, check-in queues and other inconveniences associated with commercial air travel.
The Washington-based National Business Aviation Association cited a 1993 study by accountants Arthur Andersen which concluded: "Public companies that operate aircraft have better sales growth, earnings per share, long-term return to investors and productivity than companies that do not use business aircraft".
Last year, the association recorded some success. New jet sales rose almost 50 per cent to 387, mostly as a result of the phenomenon of "fractional ownership". Conceived in 1986 by Richard Santulli, a former US college mathematics professor and Goldman Sachs employee, it allows companies to share corporate jets.
Instead of spending $22 million buying a Falcon 2000, for example, a company can buy a one-eighth share in the aircraft for $2.8 million. The buyer pays Executive Jet, Mr Santulli's company, a monthly management fee and a further sum for the number of hours flown.
The buyer has to share the aircraft with other owners, but can still fly at a few hours' notice. If the jet is being used, Executive Jet, which operates the Net Jet service, supplies one just like it. Four years ago, Mr Buffett became one of Mr Santulli's customers. He was so impressed he bought the company last year for $725 million.
Executive Jet is now the world's largest buyer of corporate jets. It has ordered 500 new aircraft, worth more than $8.3 billion, since 1996. Kevin Russell, Executive Jet senior vice-president, estimates his company has accounted for over a third of all business jet purchases over the past three years.
Fractional ownership means companies do not have to worry about maintenance, which can ground a jet for up to 10 weeks a year.
And while Concorde might be cheaper, fractional jet ownership better serves the needs of busy executives, Mr Russell argues. A group of Executive Jet bosses, including Mr Buffett, were in Europe earlier this month. They flew in an Executive Jet Gulfstream IV from Omaha, Nebraska, Mr Buffett's base, to New Jersey. From there, they flew to London, where they had six meetings, then to Frankfurt for four meetings, Paris for seven and then back to Boston. The journey took three days.
But while fractional ownership might have made companies keener on investing in corporate aircraft, they are still embarrassed to talk about them. Celebrities like the golfers Tiger Woods and Ernie Els are fractional owners, as is tennis star Pete Sampras. But only 20 of Executive Jet's 1,300 corporate customers are prepared to be named. They include General Electric, Gillette and Texaco.
Michael Riegel, Flexjet's marketing vice-president, says the cost of the corporate jet should be measured against how much executives cost the shareholders. "If you have an executive earning $1 million or $2 million a year, and you look at the return on getting them around this quickly, the cost is quite low," he says.
