Say an executive saves 400 hours a year by flying private. If that makes him a few percent more effective in a company the size of Citigroup, it's worth it.
Well, the jet can probably only be used by one executive (or one team) at a time. Thus each of these 400 hours your executive could save would have to be worth $125000 USD. Oh, and remember these jets cost upwards of $15000 per roundtrip, too...
No, I think citigroup suffers from the same illness as GM and Ford - their top management has completely disconnected from reality, long ago.
My little firm did billion dollar deals, and we used private jets to flit our management teams from one investment fund to the next. Citigroup is much, much bigger. 400 hours (per year!) could easily be worth $50 million.
But how? I agree that my calculation was flawed, but even if you stretch it over 10 years that's still a rate of $12500 per saved hour - without counting the cost of ownership and only to break even.
Are there really deals that turn out so much more profitable only because you arrive 2 hours earlier?
There is a facility that says time in transit does not count. If your on a 3 hour flight in first class you can get a lot of work done. Granted a private plane might make you more productive. The real question is does the value of the flexibility of keeping your own cooperate jet worth the cost vs renting when it's useful.
IMO, if you are constantly flying people around the world to do deals then you have already failed. If they are small pay to bring them to you, if they are large work remotely. If they are large and can't work remotely then you should not be working with them as they are clearly incompetent.
The funds have the $billions. If you want a piece of it, you go to them.
Or perhaps financial firms should hire hackers to talk to investment funds and tell them how irrational they are being by refusing to do things remotely.