Message to jet-setting CEOs: It may be wheels down until your bottom line improves.
Rent-A-Center, which faced pressure from activist investors over the last year over alleged bloated expenses, sold its Cessna 680 earlier this month, a source familiar with the matter confirmed to The Post on Monday.
The Plano, Texas, company is not alone.
Last week it was learned that JCPenney sold off three corporate jets — moves that Athenahealth and GE said they were weighing.
At Rent-A-Center, the so-called bloated expenses, including the jet, sparked the ire of activist investor Glenn Welling of Engaged Capital, who said in September that a company of that size owning a jet was “unwarranted.”
The Post reported last year that nearly half of the jet’s flights over a 15-month period appeared to be for personal use — with many flights to locations where former Chief Executive Mark Speese had vacation homes.
Since last fall, the company has become a “dramatically different company,” the source added.
The sale of the Cessna was one component of the cost-cutting plan the rent-to-own retailer announced last week.
On Monday, Rent-A-Center announced that it was being taken private by private equity firm Vintage Capital in a $1.4 billion deal — representing a 49 percent premium from when the company initiated its strategic review in October.
At Penney’s — whose stock is down 43 percent over the last year — the sale of the three Gulfstreams is “an effort to manage expenses,” it said.
And late last year, General Electric and Athenahealth — both facing activist pressure — announced plans to sell their corporate jets. Chief executives at both companies were also forced out.
“Companies are being smarter about exactly what they need. Shareholders are holding them accountable,” Kenny Dichter, founder and CEO of private aviation company Wheels Up, told The Post.
Hundreds of companies either use Wheels Up exclusively or to supplement their travel to save costs, Dichter added.
To be sure, despite instances of bruised companies selling their jets, there does not appear to be a broader trend of healthy companies being forced to clip their wings, Paul Cardarelli, VP at aviation market intelligence firm Jetnet, told The Post.
In fact, Cardarelli noted that the pre-owned business has recovered from the recession and is starting to show signs of being a seller’s market with a ready mix of corporate and high-net worth buyers.
That said, high-profile sales “don’t escape our notice,” Cardarelli added.
But even if pre-owned corporate jets aren’t flooding the market, there’s no reason for jet-owning companies to get complacent.
“Aircraft is always the first to go when money is tight,” one corporate aircraft broker told The Post.
Jet ownership can be “symbolic” of negative corporate spending culture, a source at one activist hedge fund told The Post.
We “definitely pay attention to it if it’s a cost story,” they added.