The Economics of Private Jets
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- Опубліковано 15 лип 2019
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Select footage courtesy the AP Archive
References:
[1] www.census.gov/quickfacts/fac... newflightcharters.com/private_... www.charterhub.com/listings/a... www.privatefly.com/us/private...
[2] hbr.org/2018/07/the-leaders-c...
[3] www.epi.org/files/pdf/130354.pdf
[4] www.bloomberg.com/opinion/art...
[5] / tesco-wal-mart-private...
[6] uk.flightaware.com/resources/...
[7] www.corporatejetsolutions.com/... awin.aviationweek.com/portals... www.aopa.org/news-and-media/a...
[8] www.symmetry.com/resources/pa...
[9] corporate.walmart.com/media-l...
[10] www.stratosjets.com/private-j... www.trilogyaviationgroup.com/... www.privatefly.com/us/private...
[11] www.economist.com/business/20...
[12] www.eia.gov/environment/emiss... data.worldbank.org/indicator/...
[13] www.economist.com/business/20...
[14] papers.ssrn.com/sol3/papers.c...
If you missed all the different announcements, I started a new podcast called Extremities about a month ago. It's all about how and why the world's most isolated human settlements exist, with the first season being on Pitcairn--the 50 person British territory in the South Pacific.
You can listen to the podcast here: ExtremitiesPodcast.com
5:30 north east? ... Learn the difference between east and west
Is there an announcement on why your voice dropped half an octave?
I always just thought CEOs flew private because they wanted to
Wendover Productions oh I did not miss the announcement, and I LOVE THE PODCAST! Just one request; can you push out like an episode a day? Can’t get enough ;)
That podcast is really good
So all those Instagram models on private jets are actually Walmart management... well I'll be damned.
Lolz! This^ I love how if IG went away, poof! No more of those models.
@Brutus Tan is that a Russian thing?
@@Habu12
Not really.
Hell, roll up to any commercial FBO, waves some cash around & the mechanic will let u get your IG on.
@@blewyd it happens anywhere people chase an image of opulence. it's like hiring limo
Many big corporations have a policy of not allowing multiple upper management people on the same flight, to reduce the hit in case of an accident. A friend in upper management at Snap-On Tools says it's the policy there. A 1993 corporate jet crash took out the president and upper management of In N Out Burger, and almost sunk the company.
Can't believe how far I had to scroll to see this point. I used to run a data management system for a corporate travel agency, and one of the reports you could do was to see if x number of execs were booked on the same flight. Just like you said, companies generally want to avoid clumping a bunch of execs on the same flight.
Even at the family business I work for they do the same thing, seems fairly common.
That's a pretty morbid reason, but it actually makes sense, though they could always find a replacement quickly on LinkedIn. ;D
There was a real estate firm interested in purchasing a mall near me. On final approach to the airport, the jet went down killing everyone on board. The two owners and five other executives were the passengers on board and made up nearly half the company's staff. Amazingly, the company stayed afloat and has since tripled in size (both number of employees and portfolio size) in just four years.
@Anglus Patria < Well played sir, well played! :D
Hi Wendover!! I want to request a video about how airline alliances work. (Star Alliance, SkyTeam and Oneworld)
agree!
Kristian Canoy Amazing Idea
Petition to make this happen
Yes! Codesharing is something I'd like to know about!
AGREE!
Yes, I remember the first time my CEO got really mad at me. I had taken an economy seat with a 4 hour layover instead of spending $5,000 more for a direct flight that only had first class seats available. I was young and he had to remind me that my time was far more valuable to the company that the $5k used for the first class ticket so I could arrive a half day earlier.
I agree with
his assertion. However, with WIFI connectivity available everywhere and on planes I wonder about the value proposition of taking a private jet nowadays (I know you weren't taking a private jet). I think a lot of private jet usage is due to vanity and comfort. Nothing wrong with that, of course.
@@davidm8351 the real value of the private jet comes from being able to choose airports that are not available on commercial lines so that you can save time. Example: I once had to visit a potential client HQ that was in the middle of nowhere on the Great Plains. It took me 3 flights the last a prop puddle jumper to get to the small airport close enough to use a taxi. I wasted 8 hours (counting trip in both directions) compared to if I had used a private jet to fly direct.
@@davidm8351but if something requires prescense, you have to be there early.
What industry do you work in if I may ask
Imagine spending all that money to just go to Walmart! Jeez.
Ok nigga
@@netardedrigger9683 Username checks out 🤔
@@ramanisquare ok
@@netardedrigger9683 you can't use that word. Only they can use that word
One of the many reasons I won't walk into a MallWart.
Up next the economics of headquartering your multinational corporation in Bentonville
It's actually a really nice town to visit
I imagine Arkansas has given Walmart generous tax exemptions to stay in Bentonville as well as heritage since Walmart was founded in said city.
How many corporation headquarters need to move to Bentonville for make private jets not cost justified. Move Walmart corporate offices to Chicago like Boeing.
@@BernardS4 Even in Chicago they make sense. If you fly from O'Hare to where you have to go, it can make sense if time is at a premium
Walmart/the walton family have poured tens of billions into the local city and state, they plan on staying there long term and are doing the opposite of tax cuts, and instead investing in their state.
I work as a flight instructor at a smaller airport in Florida. When I got hired I was amazed at the amount of private jet and turboprop jet traffic that comes through on a regular basis. Even random companies like miraclegro, belk and bread companies have jets.
Sam Walton preferred smaller propeller planes so he could fly low, examine traffic, and figure out where to buy land for the next Walmart.
Makes cents to me.
These people got more 💰 money than cents to being with anyways 😂
Great comment!
Plus when he visited towns where one of his stores was being built, he'd fly over head to see how construction was going. Then land, and he'd visit said site, and shoot the breeze with us workers.
Nathan Banks too bad none of his children took after his caring personality towards their customers and employees.
@@alilabeebalkoka "more money than cents"
What the heck is that supposed to mean?
Not only are you mixing an uncountable noun (money) with a countable noun (cents) causing a grammatical inconsistency, but they refer to the same thing, meaning you are saying he has more than he has, a grammatical paradox.
This video was made possible using curiosity stream.
But this channel was made possible with anything related to planes ✈️
Next, Cessna 150 and 172s
and, occasionally, trains.
What happens in a minute:
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Wendover Productions uploads a plane-related video
The economics of running a youtube channel like wendover productions. PLEASE!
@Literally Shaking on my phone so I can't do it but you can zoom in, print screen, take out his pfp with paint and upload it to google image search.
How will he include the planes
@Literally Shaking yea its really cool ! Its called A Squidman of a few words and its by SpineBender i found it on google images but he posted it on what i believe is a site called DeviantArt
@@jeremiahtisdell4823 He always does it. He can definetly do it
@@jeremiahtisdell4823 He's had videos where he went to Rwanda and Belgium, so he'll have to factor in the flight time and cost.
I flew corporate jets for several years. We did some crazy and ridiculous things just because we could. I remember flying veal sausages into the Indy500 on race day, because the corporate suite had run out, using a helicopter to land on the infield during the race. Or flying a sail to a sailboat race because one had been damaged. We often flew 2 Lear-jets, 5 minutes apart, to the same destination, because of company policy that 2 VIPs could not fly on the same plane. I even remember flying an empty Lear-jet to the east coast to pick up a piece of furniture, because the CEO was on the BOD of the local museum. Amazing how hard some people work to make money just so they can waste it.
lol. are they even consider all the money they spend? lol
I work for a company with a pretty large corporate fleet that I've flown on a bunch of times. I think corporate did the math and found it's basically a wash in terms of cost where you can take day trips vs. having overnight with hotel and rental car, but the upside is you can show up 5 minutes before the flight time and go....no TSA or whatever.
Airplanes: Exists
Wendover: Write that down!
But does Area 51 exist 🤔
I make similar videos on my channel, I spend a lot of time on my videos but it's hard getting recognized. Could someone check it out and tell me if it's good or not? Thanks
i take your entire stock!
How often do I have to read this damn joke under wendover videos?
Novella it’s wise to also write down the channel name and link (optional).
It's also easy to be cost effective when you have 10 kilos of coke on board.
I wonder if US customs looks over those little jets as much as comercial.
dannydaw59 they do, when flying international, you must fly to an airport with a customs office. The custom officers then come on the plane and do a thorough check, they do a good job.
@@NikhilBansal by good job do you mean a good job or 😉 good job old boy good job😉😉
I just spit out my coffee.
American Made...
I work at an FBO (fixed based operator, which provides services for private jets and small aircraft), and let me tell you, I've never seen more personal and family travel on private jets than this year! Private charter traffic is up nearly 40% compared to before the pandemic because more people are realizing that flying with private charters saves much more time compared to going on commercial aircraft (and companies are figuring out ways to lower charter costs). The private charter industry is in its golden age right now, thanks to the pandemic.
I did exactly this math last year. To flight my entire family (including brother's family and my parents) business class would be way more expensive than charter a private flight to our vacation destination.
A buddy of mine took me on a ski trip on his private jet. Is was the most amazing trip ever. To be able to pull up 15 feet away from the plane and then board with no wait was amazing. We landed and his rental car was waiting 20 feet from the plane. Soooo cool!
It's a great day when Wendover posts another vid....about planes
Avery The Cuban-American almost every day**
Avery The Cuban-American that’s like saying “it’s great when another gaming channel uploads another video...about rainbow six siege”. Besides aviation being an amazing topic, there’s so much economics and logistics that go into it. Thus, Wendover will upload a lot of videos about it. Really his first popular video was about aviation. So it’s nothing new at all.
Thats the focus of the channel....thats like saying why is Real Engineering posting videos about engineering. See how stupid that sounds?
70K Hours of Netflix watched
3M videos watched on Snapchat
2.4M questions are asked to Google
Wendover Productions uploads a plane-related video
i like plane videos shush!
It may be more expensive, but short haul it makes sense.
I was fortunate to fly private once with a friend to Mallorca, the turn around at the airport was what matters, in and out in 30 minutes. Time is the only thing that’s priceless to the wealthy.
Also, in vdo they only talk about time vs salary, which roughly mean how much company lose money per time but in reality. Company will also consider how much those CEO will make money for company per time. Which when consider both, larger company with larger profit will easily justify flying their CEO or upper management a private jet.
time is literally priceless, you can't get it back
I have flown in a private jet many times.
I can easily say that I've been in and out of the airport in less that 5 minutes.
In fact, there were a few times I walked right off the jet and into a taxi, no time spent in the airport at all.
@@Saugaverse yes, same here. My friend has taken me on a few trips in a jet and it’s crazy. You get to the airport and your on the plane in 10 mins. You get off the plane and hop into the car. It is an insane difference vs commercial
@@ccecchini8355 I totally agree, that was the best part.
And let's say that you're 10 minutes late, they will wait for you.
There is no point in the plane taking off if all of its passengers aren't on board, cause that is what private flights are catering to.
Private Jets are nice because they fly in the air and you don't have to share them with anyone
Nor do you risk leaking corporate secrets or people's identities as much when it's just you in the plane.
Neutered cats are nice because they're fun and keep you company, but you don't have to be worried about it impregnating one of its daughters.
Most logical reply on the internet
Oh hello Don!
Thank you Donald, very cool!
A European elevator/escalator company found small jets practical because of the small airfield capability opened up much more connectivity. They consolidated 5 warehouses and operating centers to a single facility and still maintained their servicing ability. It was the elimination of supporting duplicated facilities that made the rationale
Roses are red
The sky is blue
This man loves planes
And you do too
you exposed me:)
And so do you*
@@romain1421 his poem rhymes all right, no need to gatekeep Roses are red poems
@@thelastcube. first of that's definitely not gatekeeping and yes it sounds all right but "so do you" is a more common ending to this sort of poem
As someone who works at Walmart home office, very interesting to learn. The Jets aren't used by just VPs and exec's, buyers and merch ops people use them as well for Friday trips where they do store visits to targeted stores. Most are regional, within 1 hr of Home Office, so they aren't long trips. They give people who opperate a category to see a stores problems first hand and prescribe changes. The money generated by the stores from improvements typically outweighs the cost of actually flying there.
I think this is the correct answer. It’s not about how much the employee/exec is taking home in pay, it’s about how much their time brings in for the company
One thing missed is a employee will add more value to a company than their salary. If an employee is being paid $100k/year they may be adding easily $200k+ to the company. That makes their time even more valuable and any days waisted would impact the company negatively.
During his time at HSBC in the 90’s, a family friend was involved in evaluating the business case for the company’s corporate jet.
He told me that the most important factor in his evaluation was not the economics, but rather the effect on his career if he’d have nixed it!
Why take a private jet : Same reason, you would take a cab rather than a bus. (On regular routes).
Good point, tho i have my own car
Yeah. Same reason why Elon Musk is selling the Hyperloop to cities. Rich people not willing to sit with the plebs
@@SebastianPeitsch That's not so much the problem. It's people don't want to waste their time with public transport. If I hope in my car I can get downtown in 10 minutes. By bus is like 45minutes. I also have to dedicate the time to walk to and wait for the bus.
@@MrJaaaaake Yeah but the thing is once you do it and get to know all the bus routes and when they leave, how long it takes you to walk, and how much time you save during rush hour, you find out that you can get there just as fast and without the hassle.
I know it sounds weird but I am so much more relaxed when I get home when I don't have to drive everywhere all day. I did 25000 miles/40000km a year in the past and let me tell you - I don't mind taking twice as long as long as I don't have to deal with people who cut me off and stop-and-go traffic
@@SebastianPeitsch Public transportation takes much longer. There is a bus stop every 2 minutes. You end up at every red light. Old people and disabled people taking 2-5 minutes to get on the bus. You don't save anytime. You lose time. Buses are on a fixed route. I know when certain areas are congested so I can take a faster route. The nearest bus stop is 10 minutes away. It literally takes me 10 minutes to get to most places after going 20 seconds to my parked car.
"$5,750 per hour"
*Cries in working class*
Cries in unemployment
Don’t envy these people. They are loaded, but they pledge their souls to a company. I’ve seen senior management at big companies I’ve worked at. They’re rich people, but not happy people. Long hours, the weight of the world constantly on your shoulders.
Big money is great if you win or inherit it. Working for big money is seldom worth it.
@@Jimboy1611 "Big money is great if you win or inherit it. Working for big money is seldom worth it.
"
This more than likely isn't true and is probably a lot more valid for the former than it is the latter.
Money can buy you a jetski. Have you ever seen someone sad on a jetski before? I think not.
Money can make you happy if you know how to use it to make you happy.
@@LatifaShaqueefa Tosh?
I’ve been in IT for a long time, and back before we had architectural redundancy, outages would potentially cost companies millions of dollars per hour. Back in the 90s you could walk up to the counter at an airport and buy a plane ticket to/from any major market very easily, and be on your way within the hour, but where our offices/datacenters were situated were typically much closer to smaller municipal airfields than to major hubs with regular shuttle service. That is the major justification for private jets in a lot of industries. If you want to fly “private”, as in strictly meaning not open to the public, often, and at no charge to you, join the military. You may not choose where you get to go…but sometimes you get more leg room.
You forgot that one saves more time by landing at smaller airports, which are closer to the final destination. Thus, you do not only save time during check-in and check-out, but also during commuting to the final site...
But what about the economics of storming area 51?
ThomasTurner69 my guy asking the real questions over here
@ThomasTurner69 We will unlock creative mode and we will find the N-Word Pass.
ThomasTurner69 na your grandad with press the button
ThomasTurner69 you sir are the god kyles worship
The average fuel consumed by an A-10 Warthog per hour is...
My car just sits there 22 hours everyday depreciating, but is worth every penny for my sanity! :D
24 hours everyday depreciating*
Do you think just because your drive your car for two hours a day means it isn't depreciating during that time? lol
@@JakeobE No, but during those hours it isn't sitting there, it's being driven, depreciating
Your car technically depreciates more when you drive it.....
#wearandtear
Reasons to use a private jet:
1. Leave at whatever time you want.
2. Only fly with people you know. If anyone.
3. Eat food you want, when you want.
4. If you are flying from NYC to St Louis and you realise you need to do something in Detroit, quick chat with the pilots, problem solved.
5. You can use pretty much any airport you want.
6. You dont have to wait for (possibly) hundreds of other people with their screaming kids to get on and off.
7. If you get stuck in traffic on the way to the airport, the plane will wait for you.
I could probably list another 10 or 15 things but you get the idea. Its safer, easier, less stressful and, let's be honest, more fun. If I had the money I'd fly private all the time.
Fun fact: Airbus has two flights on every business day from Hamburg to Toulouse and back - one in the morning and one in the evening. And it's not a small private jet, it's quite a big plane (I think it's an A319 or A320). And it is almost always pretty much booked out by workers.
I think you missed an important cost savings: instead of having 12 regions, they can have fewer executives managing more stores. The math is hard, but that alone could save millions more a year.
Good point. I would like to hire you for my secretary
Right. There are more reasons a private jet makes sense other than what Wendover mentioned.
@The Bad Ass i can donut your corolla with my rdx
I would add to that the increased productivity of someone who got a full night's sleep in their own bed and skipped all the stress of airport rigamarole. Plus, commercial flights are regularly overbooked and delayed, whereas a private flight is more predictable and leaves when you say.
For the record, I used to fly to work on a private jet.
I was not an executive or a CEO.
So don't assume it is only the top Execs who fly on private jets.
CEOs who own private jets must use Brilliant to prevent loss of money.
Most CEOs can't afford to own a private jet. Their companies provide the corporate jet.
$1m-$15m a year salary isn't enough to buy and maintain a private jet.
Yeah, private jets are expensive.
$6 million is about the cheapest I've seen in terms of purchase price.
(ignoring Cirrus's weird jet here, which is basically in the size and performance range of a mid-size turboprop)
And that's only the purchase price.
Maintenance and operation of such a jet, considering it requires dedicated flight crew, special maintenance contracts (jets are mostly in a different category legally from private prop aircraft, which forces you to use much more expensive maintenance services)
And 6 million is if you're lucky.
Realistically the starting price is closer to $12 million, and can be as much as $50 million for the larger private jets. (then again at that price you're talking something like an A318 - the smallest variant of the A320 family)
Owning an aircraft generally is expensive though.
Let's say you're a pilot with a basic private license like me.
You want a plane, obviously, because what's the point in being a pilot if you can never fly anything?
You're not too fussed about what you fly... But you'd rather not get second-hand or kit-built.
So, let's take a really tiny aircraft that meets the LSA classification - 2 seats, 600 kg or less MTOW.
Say, a Tecnam Sierra:
en.wikipedia.org/wiki/Tecnam_P2002_Sierra
This thing will set you back about $250,000 Australian.
(I'm using Australian dollars for familiarities sake - but values in other currencies would be comparable. Slightly lower or higher depending on the currency)
It's fuel usage is extremely reasonable at about 20 litres per hour, and it's cruising speed is about 110 knots. (~203 km/h)
It also has an engine that can run both off AVGAS, but also regular high octane petrol used by cars. (only criteria is it has to be 98 octane)
The fuel usage is about twice that of a large car (station wagon, 4wd, that kind of thing.)
But, it's also going about twice as fast. So per unit distance travelled, fuel costs are about the same.
So what other costs are there?
Well, you'll probably need engine oil. Estimates for that size aircraft would be about 0.1 litres an hour. Oil costing about $14 a litre.
With fuel at about $1.50 a litre...
You're looking at about $30/hr in fuel. $1.4 in oil.
Direct cost: $31.40 /hr
So, what other costs are there? Well, the engine will need an overhaul after 1000 flight hours. New/overhauled engine will cost about $15,000
You'll need an inspection every 100 hours or so. Cost about $1500
The propeller will need an overhaul every 1000 hours. - $1000
Insurance: $3500 a year
Hangar space rental (unless you're lucky enough to own one, obviously): $200 a month. (relatively cheap, but not trivial.)
So, we can break the maintenance and inspection costs down to about $31 / hr
Add that to the fuel costs, and your cost per hour flown goes to $61.40
Given fuel price fluctuations and the like let's just say $65 / hr
But that's assuming you own the aircraft outright and don't need to pay a loan related to it.
Your fixed yearly costs related to owning the plane are then $5900
Is that affordable on a moderate wage? Sure. Assuming you can afford to buy the thing in the first place of course.
But this aircraft is useless for doing any kind of work with; it's purely for fun.
And you can see if you're flying it only $100 hours a year, you're paying roughly $125 for every hour you fly. (relatively more if you fly it less, and relatively less if you fly it more, but still quite a lot.)
And costs escalate rapidly.
More typical smaller GA aircraft like a Cessna 172 use easily twice the fuel.
Something like an SR-22 costs you about 3 times as much to buy, uses about 4 times as much fuel, and has vastly more expensive components (and thus higher maintenance related costs.)
If you go up to the extreme end of private ownership you're looking at things that cost 20 times as much to buy, and probably 40 times the per hour operating costs...
And the cheapest private jets are still vastly more expensive...
@@CV-ly6ct No they use honey to scour the internet for coupons and save up to 90% off
C V $15m a year is not enough? Bruhhhhhhhhhhhh
@@alibaba888 It's true, private jets are insanely expensive. Like, so expensive that they make $10k first class tickets look like a damn bargain.
Always super informative. Thank you!
Love all your flying industries videos. Keep up the good work.
After every plane video I think he is out of plane ideas but oh boy was I wrong
Private jets are also often justified using a reason that can't fully be quantified - productivity. In most first- or business-class cabins, to say nothing of economy class, it's not possible to engage with others flying alongside you and have business discussions while in flight. However, this is exactly what private jets are designed for in many cases. Connectivity options, like phones and internet, can be made available on every flight instead of hoping you fly a carrier with Wi-Fi. This particular reason is why most national leaders have their own private jets - they need to be able to get down to business and talk with advisors 24/7, and you just can't do that flying commercially. Many companies have grown so large that the stresses and responsibilities on their leaders are similar enough to make private jets worth it for the same reasons.
I agree with your point, however most long-haul carriers in first have seriously stepped up their game in that regard. You may still not be that fast with commercial, but if you fly First, you lose very few productive minutes.
BottomFragger yes, but you won’t be able to discuss everything as you would on a private plane. For example a new product or strategy which could be sensitive to competition.
That's a fair point. I don't see many company executives flying together in first class or business class even. The process of security and the general public is still there, which is unhelpful to facilitste intelligent and meaningful discussion. Having been on a few (stationary, unfortunately) private jets, you can instantly recognize that flying on one would be a truly incredible experience.
Andy Cox I think we had similar name struggles growing up bro
I think you have more valid point than the video itself.
Man I love all your airplane videos. Keep em coming and thank you!
You left out a few more important considerations, for example, the amount of time that it takes in either alternative to resolve a problem and make a decision, which might be much more valuable.
You skipped one point, people who can afford to fly private are buying time and convenience. After a certain point on the economic scale money starts to lose it value when compared to time and hassle. This applies to all of us just on different scales. Example: Many of us will stop at a convenience store instead of Walmart for a quick, minor purchase. We pay more at a convenience store but in return we get a quick, easy visit. The uber-wealthy pay more for a quick point to point flight for the same reasons. We all like to save time and hassle to them the cost is worth the savings in time and hassle.
First to comment
Sam is secretly married to his gf Boeing. But he can't forget his ex Airbus.
Didn't they Sukhoi them?
There was also that fling down in Rio with Embraer I heard about...
Great video, I also want to add.
A business CEO could have a meeting in the DRC for $500 million and the only way to get him there is by private jet because there aren't any public flights available in that part of the world. Therefore the cost to profit ratio is tilted to the private jets favour.
How does the DRC get there?
Do a video about Oshkosh, the logistics of this is crazy.
People just want to flex on people, even if the thing they flex with isn't even practical
Looks like this guy didn't finish the video.
Kieran Fulcher rewatch the final part then
Hey, why are you copying my subscriptions . I see your comments in most of videos I watch
I though a flex was impractical by definition... But yeah, a plane can be a flex. I have also talked to a few executives who use them for tax write off
This man is a legend for not making the 10 minute mark
thats what she said
Why is that a good thing?
I was growing tired of your videos but I think this is your best video yet. Really caught my attention back to yiour channel
As a private jet pilot. I would like to thank you for finally explaining this to a large audience. I don't think most people realize how hard a CEO works and how valuable their time is unless you see it first hand. I'm shocked any fortune 500 CEO gets more than 3 hours of sleep a day.
Nobody:
Wendover Fans: OMG HE'S DOIN THE *_P L A N E S_* AGAIN
*P L A N E S*
Newmono
THE *p l a n e*
en.wikipedia.org/wiki/Plane_(tool)
But if nobody said nothing, that means everybody said something... hmm
Nigga stop using that gay ass meme format
Walmart doesn't just fly one exec. More likely a team of 5 gets on board. That makes those trips super competitive vs flying commercial business class.
Yes this was explained in the video, though framed as a single passenger vs a full flight
When looking at the carbon footprint of the jets, it still doesn't make sense to fly them even with 5 on board.
@@aidenhenrie4736 It might not be particularly friendly to the environment, but at that point, it definitely makes sense for the company. They probably don't even care about that part, and it hardly factors into whether or not it "makes sense".
AKA public transport reinvented.
When my father was svp of tech for Walmart he often flew out to places with a small group. So you'd be correct
Informative and entertaining. Thanks for the video
Amazing explanation on how everything works!
My dad is the director of engineering of that airport near bentonville,
Walmart private flights make up %30 of the flights that go in and out of that airport
Do u live there?
@@mhc3200 I live here, yeah
@@ironichoneybadger5066 what kind of effect does walmart have on the city?
@@mhc3200 the city is basically run by it.
they have a hand in all businesses around the area, a majority of the city's population works for wal-mart, they effectively own the place, sam walton's children have HUGE impacts around town, they pay for parks, they improve things, but they also change stuff that people don't agree with all of the time. it's really strange to see the intertwined business and politics.
@@ironichoneybadger5066 very interesting. Their net worths are huge considering its a split fortune. Do u find it odd they kept the HQ there?
Wallmart wouldn't have to charter for long range. They have a Gulfstream G650ER. N762MS
Did they ever make the runway long enough so it can take off full of fuel? The old global couldn't. They made the mistake once and almost didn't make it off the runway in time.
@@hogsneverwinbiggames we don't have room for that kind of racist stuff here buddy. Take that stuff somewhere else.
@@erictremblay4940 Dasseault tri-jets? Sony, Comcast, Bill Gates, Taylor Swift, and Michael Bloomberg to name a few.
hogsneverwinbiggames XNA is 8,800 feet long so they can definitely make it
@@shotelco
Indeed, Dassault has about an 8% market share, so there must be some of their jets around :-)
Gulfstream, Bombardier and Textron are way ahead of them in terms of $ sales.
My dad was an executive at Kodak, this about sums it up. They preferred 4 executives, or CEO per flight. With restrictions on certain people flying together in case of crash.
Great video. I work in this space and corporate aviation is often misunderstood. Clearly there is a climate challenge with all aviation but many people don’t appreciate the issues raised here. Good job.
He doesn’t sound as excited today as he does every week. And this week is ABOUT PLANES. Who are you and what have you done with Sam?!
Maybe he just hates private jets
because doing the research made him realise that private jets are little more than obscene displays of callous disregard for climate change and economic inequality... yet he still had to try and justify them. this means he's not devoid of empathy or suffering from cognitive dissonance, which is great.
capitalism got to him
He turned Sam into a lamp shade!
Couple of things to add to this great video.
1. As you noted, the aircraft are almost never flying a single executive. They are almost always carrying at least a couple of senior leaders, and usually a few executive leaders as well as the requisite support staff who are essential to enable the types of meetings that typically require in-person presence of such senior leaders.
2. However it is unlikely that all or even a majority of c-suite leaders would be on a flight (especially over water as in the example) due to business continuity planning.
Wheels Up is actually pretty cool. Can't afford a PJ but I was able to rent one for my friends bachelor party. Highly recommend if you have the money.
Plane: * exists *
Whendover Productions: VIDEO TIME
there's an article I've read on the French version of GQ couple of years back about flying private. They were talking about the French petrol company Total and they were saying that private jets have a real "negociating power". The example given was when of their businessmen had to go Africa to negociate. Some cities have one flight per day. Meaning that sometimes, them businessmen had to rush things in order to catch their flight and thus, lose some negotiating power. The businessmen on the other side of the table knew that and played the clock. But if you're flying private then you have all the time in the world.
Sounds awfully dubious to me. If your negotiation is so important, stay the extra day. Or you know, don't plan on leaving until the day after business concludes.
@@babyhuey6342 still, if you have a fixed scheduce and the other party knows that they can draw things out in order to come close to the deadline and gain power
@@babyhuey6342 I agree, but as the person after you says, the other guys might know you're on a tight schedule. Specially if you negotiate on a Friday for instance. And the article (I should have mentionned) talked about special destinations where there's less than 7 flights a week. Of course it wouldn't work on a NY-Paris Flight or a London-Dubaï.
This actually makes sound sense. The detractor's point makes no sense in this scenario.
It is also more safe and secure. Executives can discuss business without risk of being eve’s dropped on. Also you can have more security and privacy for traveling when you are someone that is at risk of attack. Lastly, with the advent of fractional ownership in the 80’s it became more cost effective to use private aircraft. The numbers you used were to own your own plane and have a crew on your payroll as well. By getting a fractional ownership contract you can have the benefits of flying private for much less. You just have a different crew and aircraft depending on the level you contact / spend for.
amazing videos as always
Always made me laugh how the emphasis is on us regular folk to get electric cars while a few hundred miles of one Exec. in his private jet out does a years worth of polution saving.
basically impossible with current tech to get the benefits of private jets without pollution, so most CEOs use private jets anyway whether the general public use ICE or electric cars, might as well start the transition to clean energy with everyday vehicles, and once the tech is developed then switch our air travel to electric
My friend is a pilot and he currently is doing surveying work and was looking at buying a car. When he started talking about wanting a hybrid to help the environment we all busted up laughing and asked him how much gas his plane burns, and then he shut up lol.
@@onlinealias622 a hybrid car, unlike an electric car which uses coal power, refills its own battery. I'm so glad you mocked your friend out of making a good environmental choice. You must use no coal/oil at all, right? 🙄
@@NadiaSeesIt evs and hybrids look stupid, just get a gas car. He kept his freinds pride intact.
@@NadiaSeesIt There are plug in hybrids which still use "coal power" and inefficiently burn fossil fuels. Coal is also used much less nowadays for large scale energy production, especially in Europe, so it still is often better fully electric.
Since Walmart pays for the flight, the salary is not relevant, it's the value of getting done much quicker. What they pay him doesnt change, their effective work changes as they become a much more efficient employee.
The salary is an indication of how much they value his time, so it's not strictly relevent but it's a good approximation
@@Septimus_ii that is incorrect. They always value his time more than what they pay him, as the employees are profitable investments, not a break even expense.
If they pay $1m, likely he brings back a whole lot more than $1m to Walmart.
@@Septimus_ii Most CEOs probably bring in 5-6x likely even more than their salary
Thank you for sharing..
Great explanation.
This youtuber deserves his own private jet fleet. I'm serious.
Half as Airworthy
You don't consider the possibility that passenger in private jet could actually do (confidential) office work while in flight. Such as video conferences.
Finally a normal voice over on top of another super interesting video
In Australia many of the mining companies operating in remote areas operate or lease private aircraft to transport specialist engineering staff and in some cases entire workforces to their sites. A model often used in extreme locations is Fly-in, Fly-out where there are two complete crews one working and the other resting in a major city and change over every few weeks by private aircraft. In between smaller aircraft fly senior staff and supplies to the site.
Except that you can’t fly the 19 top manager in the same airplane ...
It would represent a great risk in the eventuality of a crash :/
Really nice job dude !
Well the risk is pretty much 0%
Okay. Fly 10 on one plane and 9 on another.
They are only a small number of managers.
Inspirer not really
FinalLugiaGuardian those two plans can still crash to each other! Better be safe and split them up in 3 planes
Love your videos! Especially on planes! Would it be possible to do a video on explaining how regional airlines work (such as Skywest, Expressjet, and Compass airlines flying for Delta connection, American eagle, and United express)? I think it would be a great video and clarify a confusing topic
Dylan Bravo sounds like a fun subject, hope he reads this
Great idea! That’s something I’ve never fully understood either.
I would like to see that too!
Very down for this
People often forget to include that those hours saved are used to make decisions that makes billions of profit for the company(walmart as the example given). If one considers private air travel then costs is more or less irrelevant. I don't know about other industries but for retail real time data is an edge that put walmart and other large retailers ahead of the industry. It is one of the reasons why people could buy very affordable goods at walmart.
Loved this video
For the Walmart scenario, there's also the fact that many stores aren't in a town service by a commercial airport. Many stores, such as Spearfish SD would require some drive time after landing at the "nearest" commercial facility.
Walmart worker: I need a raise to afford shopping at Walmart.
CEO: look at my private jet.
Fun fact: the CEO of Walmart earns more in a single minute than the average Walmart worker earns in a whole year.
Something Nothing That’s not fun, that’s disturbing.
@@SomeNot He's well worth the pay he gets
@@SomeNot That's not true at all, he makes 24,000,000/2700/60 = $148,14 per minute. The median wage at walmart is $22,000 annually
@@sumerrana6805
He's not on the ground serving you or making the day to day decsions. And as shown above, Many don't even work that much
It's so awesome that he's talking about Bentonville considering I practically live there
Hours of research cramped as a less than 10 minutes video. Thanks so much
Basically:
Normal airliner = Bus
Private jet = Car
Yup, in the global picture
Keep this in mind when you’re talking to an airline pilot: “after all, you’re just some kind of a bus driver”.
@@AndersHenke not even close. An airline pilot is a meteorologist (better than most if not all news channel weathermen also), a physics genius, a mathematician, a geography expert, multilingual, medically fit as a requirement, and all of this is before they even are allowed to enter the cockpit. A bus driver doesn't even remotely compare to a pilot in the slightest.
@@yamafanboy no. Airline pilots just type in info into a computer generated by dispatch.
@@yamafanboy Yet they still can not turn off autotrim in time.
I think you may have done the economic evaluation backwards. From the perspective of a company, the company would evaluate whether or not it's worth it to fly a jet by looking at how much net value an individual adds to the company. That would be the gross value added LESS the person's salary/benefits/etc. Your analysis only makes sense for an individual with a salary paying their own way without a company paying for them.
good point
No Wendovers system makes sense. If you work out that in 3 hours someone earns 15,000 dollars. A private jet says let's saves 3 hours but costs 20,000 dollars. So technically it is not worth it.
GDP If he had earned the company $50.000 hour it would be worth it.
Your model is closer to reality but the question is how do you compute for "the net value an individual adds to the company"? The value of a company is in itself speculative in nature. Remember, valuation is more of an art than science. Especially if the company is private, there's no market cap to rely on. The salary model eliminates the speculative aspect of valuation because it's an actual cost, thus, imo it's superior for documentary purposes. Companies would also prefer the salary model because its cost-to-cost, without speculative valuation w/c makes decision making more objective.
Barney Garcia Also, the jet itself generates value. Being able to fly potential clients to you for meetings makes them much more likely to buy whatever you are selling.
Comfort is priceless !
Interesting analysis, thanks.
It never ceases to amaze me how celebrities lecture us on not eating meat and burning fossil fuels but then use private jets
@@mergg3365 Bull shit, I live next to the largest general aviation airport in Virginia which is also next to Jiffy Lube Live (a massive stadium-style concert venue). Every artist that performs at that venue flies into the airport on a private jet, from Tailor Swift to Wiz Khalifa. Maybe it is the label flying them around for the tour, but that doesn't change the fact that they're using private jets more per year than the average American takes flights in their lifetime while lecturing the rest of us. I'm not even against private jet use because I understand the economics behind it for people whose time is valuable, but the hypocrisy needs to stop. I have friends filling their jets up with fuel and emptying the waste tank every day who could only dream of that kind of luxury, but they gotta listen to those same assholes lecture them on TV at night. Fuck celebrities.
@@MrMattumbo So they fly in a private jet while working. That's what Mergg said.
Despite the economics for a stage tour that needs you to be in a different place nearly every day far away from the last one and with enough rest to do a 3 hour concert and preparation before.
"If that's you, or you would like it to be you..."
That's why I watch this channel.
This is the best channel on UA-cam
I’ve been waiting on this
A small critique: wouldn't the number you're calculating need to be the value that said VP/employee is bringing to the company (as opposed to how much they are actually getting paid)? Walmart (or any free market entity) would seek to get more value from an employee than what the employee he/her-self it worth. I may be splitting hairs here but I think it's a distinction worth making!
Like your vids!
The idea is that since during all those extra days the VP is traveling he's not working, the company loses in productivity per hour. Cut that 4 day trip to a 1 day, and now you have 3 extra days of the VP doing work that they don't have to hire another VP to do.
@@thelight3112 He's not talking about that, the value of an employee exceeds their salary, else there would be no point in hiring them, so that is the real figure that matters.
Exactly what I also thought. You've to consider 3 things which is Time, Salary and how much money that person make for company. If they(Board) believed company success is mostly due to this CEO. It's mean that CEO worth a lot to company and they'll pay a crazy sum to maximize that CEO's time.
Using a private jet to visit a wall mart :D now I’ve seen everything.
Bruh
That American CEO pay breakdown was soul crushing.
I have never been to any airport and still watching this seriously 😂!
Two pro-private-jet arguments that I wouldn't agree with, but which I was surprised to see Sam decide not to make, are that the time on the plane can be used much more productively as opposed to even a first class suite on commercial flights, and the appeal of a private jet fleet could tip the recruiting balance in a company's favor when looking for and hiring the most talented executive staff.
That's cause this video was rushed. Flexibility and added security are other factors that can't be measured as to why corporations use private jets over commercial first class or business for their execs.
I'm an ACC service tech at a Walmart, and I'm literally sitting outside the shop on my lunch watching the beginning of this video thinking "I bet the winery CEO owns 20 private Jets".... I didn't think I was right lmao
HisAjabness its ridiculous how unequal wealth is distributed around the world. Even inside countries, the divides are huge
@@ReptilianLepton Yeah. This is Africa bro. That $3 is not a must. Depends on how many heads get a cut. Sometimes it is just lunch and you walk home. But am not complaining. I know guys who cannot afford rent for lack of job. They sleep on polythene paper! To them am almost like those CEOs over there.
@@snooogly if it was all equal what's the point of doing hard and stressful jobs like being a CEO.
@@aaronmoise8261 Not every CEO is wealthy and hardly works. Plenty spend most their awake hours working.
@@dasbubba841 your missing the point. And name me one CEO who started off hardly working smh. The ones that don't work much grinded to that position.
So, this is my new absolute favorite channel. Adblock turned off for this channel. One day I will be able to afford to Support this champion channel on Patreon.
2:11 I like the image you have of the "upper" CEO
As some other commenters have tried to say, the salaries are irrelevant. They are, at the time of the flight, a fixed cost to the business. Economically speaking the business is trying to make sure that the marginal utility of the activity exceeds the marginal cost. The marginal utility is the value of each extra hour's work to the company that private jets enable (which should be many times their salary). The marginal cost is the extra cost of the activity - over and above the fixed costs. In effect, these things just make private jets a more compelling activity. An executive will also travel with an assistant - at the very least. He/she will also be able to perform valuable work aboard the private jet - so the extra utility should now include those hours.
You’re assuming an employee’s value to the company equals their salary. Ideally the former is a multiple of the latter.
John Smith just realized you’re right, it’s confirmation bias
Yup, nailed it. This is exactly why investors don't care about these major companies using private aircraft for business trips instead of demanding commercial - the point is that the time savings will create more than enough profit to compensate.
Never mind the fixed schedule of commercial flights no doubt wasting some variable amount of time each trip, not to mention last minute changes in plans that commercial obviously won't be flexible with in any way.
Frankly, the real question is how can a large global company justify NOT having at least some form of available on call private transport - the value of a single business deal made in one trip alone can potentially justify the cost, nevermind the ACTUAL value to the company of the staff that may use it throughout the year
sucks that employees have to be paid less than their labour is worth to the company to be employed
it'd be neat if we came up with some communal idea to stop this, we could call it communalism or something? idk just a suggestion, the name might need some work
I don't believe that was meant to be taken literally as these employees aren't actually paid by the hour. It's just a way to compare costs for the company. I think that's more useful than comparing to the actual value an employee adds to the company, a plane ride should be considerably less than this or it wouldn't be worth it. You know what I mean, if travel costs were that much higher than salary they could just hire more employees to divide up the regions and add that much more value to the company.
Like I said in another comment thread, you're literally just repeating Karl Marx's *disproved and obsolete* Labor Theory of Value; yet this comment is getting so many thumbs up. People today are absolutely retarded regarding Economics, YET it's the main thing they complain about. Baffling.
If you truly believe a person isn't paid according to value, then you not only don't know how Economics works, but you have no comprehension of how the abstract concept of "Value" works either. It's like believing 2+2=1, the very fundamentals are fucked up here.
It’s fascinating to see what the business world was like before 2020.
A very informative, clear to understand video. 👍
I'd love to fly private jet one day.