Banks bail out of jets

As if Bank of America Corp. and Citigroup Inc. needed additional exposure to bad assets, the banking behemoths are now both trying to sell some of their corporate jets — and are facing rather substantial head winds.

As if Bank of America Corp. and Citigroup Inc. needed additional exposure to bad assets, the banking behemoths are now both trying to sell some of their corporate jets — and are facing rather substantial head winds.

The market for private jets couldn’t be worse. BofA of Charlotte, N.C., and New York-based Citi may be forced to take considerable hits if they find buyers for their six jets — three apiece, plus a helicopter that BofA is also trying to unload — in the coming months.

“There are so few buyers out there at the moment, yet the number of sellers is growing constantly,” said Kevin O’Leary, president of Jet Advisors LLC, a Broomfield, Colo.-based aircraft consulting and brokerage firm. “If you want to move something right now, you have to lower your asking price to a number where a buyer just can’t say no.”

Mr. O’Leary said that private jets are selling for up to 40% less than they were a year ago when there were only a handful of private aircraft put on the market by corporations.

BofA is said to have four Gulfstream jets in its fleet of nine aircraft. It isn’t known which models it is shopping, but the Gulfstream G550 — which was fetching up to $60 million a year ago — could now be had for less than $40 million, Mr. O’Leary said.

At this time last year, there were only four or five corporate jets for sale, he said. Now, however, there are well more than 30 corporations actively — and publicly — shopping jets.

“And there are probably another 30 or so would-be sellers who aren’t bothering to shop their aircraft right now,” Mr. O’Leary. “They just don’t see the point.”

So much for the friendly skies.