News of bailout-beneficiary Citigroup receiving a brand new $50m new corporate jet certainly did not go down well with US investors and taxpayers on Monday.
And yet Tuesday morning the bank was still insisting that proceeding with the jet’s delivery was actually more cost effective than cancelling the order.
Not anymore! For behold, Citigroup has seen the light. The bank will go Dassault-Falcon-7X less.
As Bloomberg reports:
Jan. 27 (Bloomberg) — Citigroup Inc., which has received $45 billion in U.S. government funds, won’t take delivery of any new aircraft, according to a spokesman for the New York-based bank. Citigroup has “no intent to take delivery of any new aircraft,” spokesman Stephen Cohen said today in an interview. He declined to comment beyond the statement.
The lender said in an e-mailed statement to Bloomberg yesterday that it planned to buy new, fuel-efficient aircraft and sell older ones to lower operating costs. Citigroup said funds from the Troubled Asset Relief Program, or TARP, wouldn’t be used to buy the aircraft. White House press secretary Robert Gibbs said yesterday at a press briefing that President Barack Obama “doesn’t believe” using private jets “is the best use of money.” “He said that as it relates to the auto industry, and he believes that as it relates to banks, as well,” Gibbs said.
Citigroup plans to take delivery of a $50 million Dassault Falcon 7X corporate jet, the New York Post reported yesterday, citing a person familiar with the transaction. Citigroup is also seeking to sell two older Dassault 900EXs, worth about $27 million each, the newspaper said. “The notion of Citigroup spending $50 million on a new corporate jet, even as it is depending on billions of taxpayer dollars to survive, does not fly,” Michigan Democratic Senator Carl Levin said yesterday on his Web site. “We signed a contract in 2005 for replacement aircraft, which was part of our plan to reduce the number of aircraft Citi owns and use more fuel-efficient aircraft,” the bank said in the e-mail yesterday. “Refusing delivery now would result in millions of dollars in penalties.”
Of course we would have preferred to have heard the following from Citi’s spokesman (to this tune)
“There’s so many times we’ve let you down
So many times we’ve played around
We tell you now, they don’t mean a thing.
Every place we go, we think of you
Every loss we take, we assign to you
When we fall down, you’ll lose mostly everything
So diss us and laugh at us
Tell us we’re not worth the Tarp
Hold us back, but you’ll never let us fall
cause we’re Citi with no jet planes
Don’t know when they’ll be back again”
Related links:
John Denver: Leaving on a jet plane – Youtube
Citigroup won’t take delivery of new aircraft – Bloomberg