“Empty private jet flights hastened Credit Suisse Chairman António Horta-Osório’s downfall,” crowed a headline in The Wall Street Journal.
The banking boss resigned last week after he lost the board’s support. It was a faux pas that could have – and should have – been easily avoided. It also shows how the most sophisticated executives often are babes in the woods when buying private jet flights.
The financial paper noted, “A bank review of the chairman’s travel found it was paying for planes to return empty after dropping him off in London and Lisbon.”
It added, “On multiple occasions, a private plane paid for by Credit Suisse dropped him off on a Thursday and returned empty to Switzerland, according to people familiar with the travel. By Monday, a plane picked Mr. Horta-Osório up for work in Zurich.”
Why was the bank paying to fly private jets empty on repositioning flights? “A person close to Mr. Horta-Osório said the planes were rented, and couldn’t wait around for the weekend,” according to WSJ.
It was a stunning downfall for Horta-Osório. Just last year he was Knighted by Queen Elizabeth for his previous work at Lloyd’s. An article at the time noted, “A widely-respected executive in the U.K., Horta-Osório also became an early, public advocate of mental health in the workplace – far before it was common to do so.”
While there were other issues facing Horta-Osório at Credit Suisse, a jet card with one-way pricing could have avoided the specter of using bank funds to fly empty private jets.
One-way pricing is a core feature of many jet cards. One-way pricing means you are only billed for the occupied flying time. In other words, Credit Suisse would have only been charged for the time its former chairman was in the jet. The provider foots the bill to position the aircraft to pick up the client and take it to wherever needed after dropping them off.
Many jet cards offer one-way pricing at fixed or capped rates. You contract to fly at a fixed or capped hourly rate when you buy the jet card. Card memberships also have guaranteed availability. That means so long as you book your flight outside a deadline you only pay your hourly rate for the time you are in the private jet. Deadlines are as short as 24 hours.
For example, if your jet card contracted hourly rate is $6,500 per hour, a two-hour flight would be charged $13,000, plus taxes and taxi time.
Private jet usage was likely more a lightning rod for opponents who wanted Horta-Osório ousted. According to WSJ, bank rules on the use of private jets weren’t broken by the former chairman. Other reported concerns included leadership style and behavior towards colleagues. Horta-Osório was brought in to repair the bank’s reputation after several scandals.
His usage of private flights was like other executives, according to a spokesperson. What’s clear is whoever was arranging his private flights probably was just chartering via a local operator. In this case, the airplane being sourced was probably based in Zurich. It had to return after dropping him off as it had other customers to fly.
In Europe, multiple providers, including VistaJet, NetJets, Flexjet, PrivateFly, Globe Air, Air Partner, and Air Charter Service provide jet cards with one-way pricing. They use both based and floating fleet jets. The Private Jet Card Comparisons’ database has over 50 providers with fixed-rate jet cards.
Whether avoiding paying for empty private jet flights would have saved his job for the time being is hard to say, but it would have provided his opponents one less soundbite.