Kathryn Forde of NeuData summarizes a JetTrack case study illustrating how corporate jet activity can yield signals that help investors to identify the most likely acquirer for a takeover target. Forde also outlines an alternative approach to tracking corporate jets using free alternative data sources.
As rumors and speculation about Donald Trump’s ties to Russia have swirled in recent months, much of the controversy has centered on one specific event — the 2013 Miss Universe pageant held in Moscow. While an intelligence dossier suggests that Trump engaged in salacious activities while in Russia, the president denies he even spent the night. New flights records obtained by Bloomberg indicate Trump’s visit to the Russian capital may have lasted longer than he claims. Combined with Trump’s own social media posts, these flight record help recreate a consequential 46-hour period of time.
CEOs and other executives enjoy a wide range of benefits that go well beyond salary. Companies often pay for CEOs’ country club memberships, medical care and security. Some even pick up the tab for motorcycle clothing and high-end parkas. But one of the biggest perks of serving as CEO is access to corporate aircraft, both for business and personal travel. Facebook Founder and CEO Mark Zuckerberg, for example, takes only a $1 annual salary, but his tab for private-plane trips in 2017 totaled more than $1.5 million.
In our connected world, people’s lives are much easier to track and follow through social media, cell phone calls and messages, city surveillance systems and other methods. But private jets are an often-overlooked means to monitoring movements. Lobbyist and political consultant Paul Manafort has found himself caught up in the investigation by Special Counsel Robert Mueller. And a flight private jet linked to Russian oligarch Oleg Deripaska is just one sign of Manafort’s potential wrongdoing. Investigators have long held interest in Manafort and Deripaska’s relationship, and a specific flight in August 2016 from Moscow to Newark, NJ is getting added scrutiny.
Donald Trump has always tried to create an image and persona that reflects luxury and opulence. One only need see a picture of his gilded apartment in New York City to understand that he likes to go big — and the same holds true for “Trump Force One,” the Boeing 757 that Trump purchased for $100 million in 2011. The plane itself was built in 1991. It was used by discount airlines in Denmark and Mexico, and then it was sold in 1995 to Microsoft Co-Founder Paul Allen — who used the plane to ferry his NFL team, the Seattle Seahawks, around the country.
Sometimes high-paid CEOs are criticized for using private jets, not just for business trips, but also when traveling for leisure. But, in a twist of irony, Apple is now requiring CEO Tim Cook to fly privately at all times. A CEO is hugely important to the fate and future of the company he or she represents, and Apple is taking a step toward protecting its most important figure by making him fly privately in the name of security and efficiency. The move was announced in a simply proxy statement to shareholders.
Not all who lead a luxurious, high-end lifestyle are truly able to afford it. In fact, some who are considered the “superrich” actually owe money on debts and obligations that they have long failed to pay. To the private investigators trying to chase down the so-called superrich to collect on debts or take collateral, the debtors’ use of private jets makes them far easier to track. It’s not unusual for a private investigator to sit at a computer and use a number of sources to track a target’s movements via private plane.
Board members and shareholders can rightfully expect transparency from management of the companies they oversee and invest in. But that expected transparency isn’t always provided by the companies themselves. GE has found itself caught up in a complaint about the use of an extra private jet by its CEO. It took a story by the Wall Street Journal to unveil the secret that former Chairman and CEO Jeff Immelt often had an extra jet follow his own aircraft on overseas trips throughout his 16-year tenure leading the company.
In September of 2017, Health and Human Services Secretary Tom Price resigned from the Trump Administration after less than a year on the job. He was forced out by his practice of taking expensive private planes to travel short distances, even when there were perfectly acceptable (and far more affordable) options. A team of Politico reporters caught wind of this unusual practice, and those reporters went to great lengths to track Price’s travel and confirm his use of private aircraft — finally catching him in the act of using a gilded jet to travel 125 miles from the nation’s capital to Philadelphia.
Rent-A-Center executives have found themselves the focus of an activist investor’s ire after complaints that a business jet was regularly used for personal travel. The $18 million jet, a Cessna 680, was used about the half the time for personal trips during a 15-year period, including a jaunt to the Bahamas and a commute to a board member’s home in Mexico City. The activist investor isn’t just suggesting the personal trips stop, but rather that a company of Rent-A-Center’s size doesn’t need a private jet at all.
As print journalism dies a slow death, victim to the loss of revenue from advertisements and classified listings, online journalists are thriving. Not only are they free from the need to create a physical product, they are also embracing modern tools and resources that help them conduct investigations. BuzzFeed, for example, has essentially trained a computer to search for hidden planes — and it’s enjoying remarkable success. So far, BuzzFeed has found planes operated by US Marshals hunting drug cartels and military contractors tracking African terrorists.
The investigations, speculations and rumors about Donald Trump’s connections to Russia have seemingly swirled for years now. And one of the methods that interested parties have used to provide evidence backing up the speculations and rumors is tracking the movements of luxury yachts and private planes. Yacht and private plane data can be used to draw strong connections between Trump and at least one Russian billionaire —Dmitry Rybolovlev, whose movements via yacht and plane can be easily tracked using modern technology.
Interested in reaching the upper-echelons of corporate America? It’s not just the salary, bonus and stock options that should get you excited. Flights on corporate jets are one of the biggest perks that executives enjoy, with the largest publicly listed companies in the United States spending about $40 million on free private jet flights for executives in 2016. Not all companies are onboard with this type of benefit, though. A Financial Times analysis shows that about 10% of the S&P 500 accounts for about two-thirds of the total spending on private jets for personal travel.
The idea that tracking private planes can lead to profitable investments isn’t just philosophy. Some investors are already using this emerging practice, and it’s paying off with real results and huge returns. Hedge funds, for example, used the movements of a Johnson & Johnson aircraft to uncover the corporate behemoth’s interest in Actelion Ltd. well before the deal closed. It’s a lot easier to bet on mergers and acquisitions when you can see in real-time executives spending hours or days on the ground in certain locations.
In the wake of the Great Recession, there was a public outcry at the outsized benefits CEOs and other executives seemed to enjoy, even when the companies they represent weren’t churning out profits. More scrutiny was paid to executive compensation and benefits — and to the perk of using corporate aircraft for both business and personal travel. But, as the Great Recession grows smaller in the rearview mirror, a Financial Times investigation has found that company-owned jets are once again being used to ferry executives to and from their vacation destinations.
Law enforcement now has a multitude of helpful tools available to track suspects thanks to advances in technology. Officers can use cell phone data, social media activity and even public surveillance cameras and facial recognition to look for persons of interest. And now, as the Associated Press reports, the FBI is even using a small fleet of undercover aircraft to follow suspects and even to gather cell phone data in some cases. The kicker is this: The FBI holds that it does not need a warrant in most of these surveillance cases.
Curious bystanders have noticed low-flying planes around American cities. And now there’s an explanation behind these unusual aircraft flying at unusually low altitudes. The FBI is using these planes to collect information and track the movements of suspects. While the FBI tried to obscure its connection to the planes by creating a fictitious company, the Associated Press has traced at least 50 planes and more than 100 flights in 11 states in a one month period (April 2015) to the FBI and its operations.
In the wake of riots that occurred in Baltimore this year, many local residents have noticed small planes flying low over the city. Those planes weren’t just taking airborne tours of the city. Rather, they were part of a joint effort between local and federal authorities to monitor activities in the city during the period of unrest. The planes are able to monitor and gather information about areas far larger than a helicopter would. The American Civil Liberties Union has raised questions about the legality of such observation, as well as the secrecy behind it.
In 2014, Malaysia Airlines Flight 370 disappeared over the Indian Ocean without a trace. Now, the United Nations is seeking to create new standards that would help air traffic authorities and airlines keep tabs on commercial aircraft, even in the most remote parts of the world. The proposed standards call for commercial planes to transmit their location every 15 minutes during normal operations and every one minute in cases of distress. It’s expected that a system like this would prevent the disappearance of an aircraft like the Boeing 777 used in Flight 370.
It’s no secret that CEOs and other corporate executives collectively spend a great deal of money on private aircraft. But what executives spend the most on traveling by corporate jet? An analysis of 2013 data shows that CEOs from Bank of America, Boeing, General Electric, Disney and ConocoPhillips spend the most money on their corporate jet perks — with Bank of America CEO Brian Moynihan spending the most, a total of $448,251. In some cases, these expenditures are justifiable. But they still draw concern from many investors and the public at large.