Take Off! Pfizer Wants To Sell A Jet For $37 Million
18 CommentsBy Ed Silverman // November 4th, 2010 // 7:14 am
The ongoing cost-cutting program at Pfizer is getting close to home for the c-suite. The drugmaker is peddling a jet that only the chosen few ever get to use - a 2003 Gulfstream G550 - for nearly $37 million. At a time when thousands of jobs are being cut, plants closed and research programs shelved, this is a nifty sum that could pay for costs associated with eliminating those employeees and facilities. Of course, the proceeds could also fund the next round of executive bonuses.
For the curious, the aircraft has logged 3,433 flying hours and made 1,830 landings. How do we know? Look here. The jet has apparently ventured to some interesting places, too, such as the World Economic Forum in Switzerland and on Dec. 26, 2008 - the day after Christmas - it was spotted in Naples, Florida. Hmm… That’s usually a busy day for meetings. Wait. Golf, anyone? Check out the first photo here and then peruse the others.
For the record, the plane is registered to Charlie Papa Operations, according to the Federal Aviation Administration registry. Who is or was Charlie Papa? We confess we do not have the answer, but we can say that Charlie Papa is a Pfizer subsidiary, according to a filing with the US Securities and Exchange Commission (see this).
Pfizer aircraft have generated interest before, but not for a very flattering reason. Two years ago, Pfizer was embarassed when it became known its top human resources exec was using a company helicopter to commute each week between her Maryland home and Pfizer headquarters in New York, a move sanctioned at the time by Pfizer ceo Jeff Kindler. He reversed himself after underlings remonstrated over disclosure issues and employee morale (back story).
But not every Pfizer exec is enamored with company aircraft. Pfizer cfo Frank D’Amelio, for instance, does not like to fly and, in fact, sources tell us he avoids doing so whenever possible. This little-known detail may make it easier for the drugmaker to part with one of its many jets (see here and here). Of course, any additional failures in the lab (read this) and perhaps another plane will be put up for sale. Pfizer employees may have to buckle up, anyway.
Ken Kramer
Ed
I propose we split the costs of this plane. You get it Mondays, Wednesdays and Fridays and I get it Tuesdays, Thursdays and Saturdays. Sundays, we will get every-other.
Agreed?
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industry insider
I believe that people do not have the complete picture here. When my wife worked for Lilly, they had a fleet of corporate jets parked at the Indiaqnapolis airport. Whenever a regular employee was traveling to the same destination as ther corporate jet, they would be allowed to do so as long as there was room. The cost of the flight was expensed back to the traveler’s department at a much lower rate (basically covering fuel costs) than if that person had flown commercially. In that way Lilly saved millions of dollars annualy on their travel budget. Needless to say the food and drink on the corporate jet was much better than on the sausage casing that passes for a commercial airliner these days.
I think that we need to look at the entire picture here before we jump to conclusions.
RB
Charlie Pappa would be the military call letters for CP which is the compound code used by Pfizer Central Research for experimental molecules. See the following for a list:
http://pipeline.corante.com/archives/2006/10/23/experimental_compound_codes.php
John mack
Pfizer had that Jet listed 4 $35.5 M last year - http://bit.ly/14kAU0 - now it wants $37 M? Wha?!!!
Kerry F
Charlie Papa probably refers to the phonetic alphabet for letters CP, which is a Pfizer compound code.
Kerry F
…also Charles Pfizer?
True insider
Charlie Pop did stand for Charles Pfizer. The “industry insider” has it wrong about Pfizer. Only the top few executives were allowed to use the aircraft for personal use. No fringe benefits for the rank and file at Pfizer.
True insider
Forgot to mention… Pfizer just aquired 2 new G550 and 1 G450 aircraft plus 3 Agusta Bell 139 helicopters. Let’s say that package is worth about 180 million. Nice little perk top management and the board bought themselves for Christmas!
industry insider
The Gulfstream G-550 seats up to 18 passengers. By not making the plane available for the rank and file to hitch a ride the company was wasting a lot of money. On the other hand, given Pfizer’s legal troubles, I can see it ferrying around an entourage of 18 attorneys to any given meeting.
http://www.gulfstream.com/products/g550/
Lilly Retiree
The industry insider’s information is not accurate. The Lilly aircraft were not always made available to the “commoners” when a seat was available. That only started occurring in recent years. I flew a few times on the Lilly corporate aircraft during my >30 year Lilly career as did several people in my department. The cost of the flight charged back to my budget was not less than the cost of a commercial ticket, nor was it to just cover fuel costs. The charge was typically 5-10X what a commercial ticket cost and was charged this way to cover the costs and depreciation of the Lilly flight department which at one time included 12 pilots; most of which were rated at manager level or above including the chief pilot who had a director’s rating. Those ratings all included stock options. Of course, with the gross failure of the industry, those options are likely all worthless at this point.
Lilly Retiree
By the way industry insider, I assume you are not an MBA if you believe a corporate flight department saves money over the cost of traveling commercially. Have you looked at the cost of the planes Lilly has (had), their hangar, the associated office area, the pilots, and the dedicated support staff relative to the number of people and flights that used that service? Companies justify corporate flight departments purely by security, convenience, and efficiency by reducing overall travel time.
PformerPfizerPflier
Charlie Papa is the military(aviation) call letters for C P which is also the compound code used by Pfizer Central Research (Charles Pfizer initials). J.J Powers informed me many years ago that the CP on the aircraft and on the drug codes was in fact a tribute to the company’s founder.
By the way all the new aircraft (six) are now using call signs that begin with N235 (address in NY 235 E42st) and end in different Letters (N235PZ,N235PE for example). They also may operating under the name Peak Enterprises to maintain a low profile.
As far as cutting back by selling aircraft the company is in the process of buying all new G550’s and G450’s and 3 new choppers. Does not sound like much is being cut to me!
industry insider
Lilly Retiree, I don’t need an MBA to know that you defeated your own argument when you admitted that the Lilly corporate jet saved travel time and reduced inefficiency associated with commercial jet use. I’d like to see your spreadsheet with your analysis. Since we all know that in the world of Big Time Corporate Pharma that time is money, how are you able to conclude that the Lilly jet was less cost effective? Especially for the many last minute trips that many executives must often make, which are expensed at much higher rates for a last minute commercial airline ticket. Remember, Indianapolis Airport is not Chicago O’Hare. You can’t always, or even usually find a last minute flight going anywhere in the country.
True insider
The budget for executive air travel at Pfizer is nearly 50 million a year including aircraft fixed and operating costs and employee salaries (approx 24 pilots, 6 dispatchers, 15 mechanics plus office staff including the girlfriend of the director - who knows what she makes). Oh, and of course Pfizer’s air conditioned Taj Mahal hangar in West Trenton NJ.
50 million equals 12,500 airline tickets at 4000 a pop. Pfizer’s annual passenger load is well below that number and normally the seat loading is under 4 passengers per flight. With Pfizer stock hovering at historic lows the Pfizer execs need to ride the train and get in touch with reality. Better yet, the shareholders should AtS the whole board and fire everyone at the top. Start fresh I say!
industry insider
Yes, Pfizer executives. For your next business meeting in Chicago you are advised to take the Lake Shore Limited on Amtrak. Leaves New York Penn Station at 3:50 PM, arriving at Chicago Union Station at 10:45 AM the following morning. After a restful night’s sleep in your reclining passenger’s train seat over an aging rail line, you will be fresh and ready to dash to your noontime meeting in the Chicago loop.
Best part of the deal? Only $86.00 one way! Think of all of the money you will save the company, Jeff.
http://tickets.amtrak.com/itd/amtrak
industry insider
Better yet, let’s put to use those planes that the Bush Administration used for the Extraordinary Rendition flights, that are no longer being used. The services were run by your friendly Jeppesen Travel, a subsidiary of Boeing. I’m sure Pfizer could get a good deal on a used plane from the days of the torture flights. Good chance for Jeff to bone up on his waterboarding skills.
http://www.jeppesen.com/index.jsp
PhormerPfizerPhlier
Very funny! Jeff and his collegues from McDs can bring a “Happy Meal” and skip the $200 dollar bottles of wine and catering costing over $500 a head for most trips (and that’s being nice). Maybe they can use the train time to actually do some work and figure out why their stock sits at $17 a share!