Wednesday, October 05, 2005

Why airlines lose money

A couple of days ago I wrote about companies that use private aircraft to transport their CEOs for golfing as well as business purposes. Today, I'd like to talk about NASA, which also has a real penchant for private planes.

This penchant manifests itself in a fleet of planes NASA uses to transport its people, usually senior executives, on relatively routine business matters. Now it so happens that this type of transportation violates a policy that the federal government has had in place for a while: Federal agencies can own aircracft only as needed to meet specific requirements, such as transporting prisoners or doing aeronautical research. The GAO has shown that 86% of the flights taken by NASA's planes in 2003 and 2004 were for routine business in direct violation of federal policy.

Further, this transportation is very expensive. GAO has estimated that in the wonderful years of 2003 and 2004 NASA's reported air travel costs of $25,000,000 would have been only $5,000,000 had they used commercial airlines. Notice the words "reported costs". These costs apparently exclude such rare items as depreciation.

So, our employees are violating policies and spending a lot more of our money than they should. And DeLay says that there is no fat in the budget!

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