RIM, the maker of the BlackBerry, is facing serious losses. It has endured a 95 percent drop in its market value in the past four years. Ouch! After declining sales in the U.S., the company depends on sales in South Africa and Indonesia.
So the big cost-cutting plan is to sell one private jet? This is a symbolic gesture at best. RIM needs to cut costs by $1 billion. According to a source close to the deal, RIM hopes to sell the jet for $6-7 million. That’s a mere 0.7 percent of the total needed to be cut!
However, Jim deDecker of jet consulting firm Conklin & deDecker puts the sale in perspective: “With corporate aviation, the symbolism far outweighs the dollars.”
Companies don’t do a good enough job of justifying their jets to shareholders and the public. Corporate jets are an integral part of business, especially in a highly competitive, global economy. They save time for valuable executives and allow travel to remote locations.
If RIM’s largest markets are in Africa and Asia, you can be sure executives will still be traveling to those areas frequently, racking up expensive commercial flights. Will the company’s symbolic gesture really deliver value to its shareholders?