BofA Plans To Sell Three Corporate Jets, Apartment
Bank of America, reacting to the recent controversy over executive perks, plans to sell three of its eight corporate jets, sources inside the bank tell CNBC.
BofAhas had one of the biggest fleets of corporate aircraft on Wall Street and had been reluctant to talk about it in the past. The fleet includes 8 corporate jets, comprised of 2 falcon corporate jets and 5 gulfstreams, plus something they call the Merrill Lynch global express. Each is valued between $45 and $50 million.
In addition to the jet sales, BofA will sell a helicopter from Merrill Lynch that it aquired in the merger between the two companies. BofA says it never used the aircraft.
The same sources say BofA will also divest itself from one of two corporate apartments in New York City. One of those is located at the Time Warner Center.
BofA releasted a statement on the sale: "This is part of an ongoing cost reduction effort. given the current economic environment in which we are scaling back use of corporate aircraft, including selling three jets and the Merrill Lynch helicopter."
As many as 60 people were servicing the air fleet—including pilots and attendants. It costs about $10,000 an hour to fly one of the aircrafts. The price of a round trip ticket from Bofa headquarters in Charlotte, North Carolina and New York City is 350 dollars.
The move by BofA comes after CEO Ken Lewis ousted former Merrill chief John Thain in late January after Merrill awarded large bonuses just days before the merger closed and after huge losses that forced Bank of America to get $20 billion of government aid to absorb Merrill.
Lewis' job status has become unclear because of Bank of America's plunging stock after its recent acquisitions of Countrywide Financial and Merrill Lynch, which was headed by Thain.
Thain and J. Steele Alphin, Bank of America's chief administrative officer, have been subpoenaed by New York Attorney General Andrew Cuomo over the bonuses, leading to speculation Lewis may eventually be called to testify.
Some critics have called for the removal of Lewis, or taking away his chairman's role.
Correction: The story orginally reported an incorrect number for total fleet size due to incorrect information from BofA.