Bank CEOs Taking Commercial Flights, Amtrak To DC Testimony

Take a good look at the guy crammed into the middle seat next to you on a trip to Washington next week: It might just be Goldman Sachs Group Inc. (GS) Chairman and Chief Executive Lloyd Blankfein.

Or it could be Citigroup Inc.'s (C) Vikram Pandit, JPMorgan Chase & Co.'s (JPM) Jamie Dimon, Morgan Stanley's (MS) John Mack, or Bank of America Corp.'s (BAC) Kenneth Lewis. The CEOs of the nation's eight biggest financial institutions are ditching their fleet of private jets and taking public transportation to testify before Congress on Wednesday.

Their decisions to take a commercial flight or Amtrak service come amid a public outcry about the excesses of Wall Street and exorbitant CEO pay packages. The banks, whose CEOs have so far accepted $165 billion in bailout money, are also looking to avoid the kind of public smackdown given to the heads of the Big Three Detroit auto makers when they gave testimony last year.

General Motors Corp.'s (GM) Richard Wagoner, Ford Motor Co.'s (F) Alan Mulally and Chrysler LLC's Robert Nardelli found themselves in a public relations disaster after flying corporate jets to Washington for bailout money. They returned a few weeks later in hybrid cars to plead for $34 billion of federal loans.

The auto executives' private-jet and 526-mile car trips to the Capitol became fodder for late-night television comedians. That's exactly what the banking executives want to avoid, especially since President Barack Obama has instituted executive pay limits for financial firms seeking new government aid, and is set to outline his economic bailout plan on Monday.

The bank CEOs are scheduled to appear before the House Financial Services committee, which is overseeing the Wall Street bailout. Also taking public transport to the Capitol next week are John Stumpf of Wells Fargo & Co. (WFC), Ronald Logue of State Street Corp. (STT) and Robert Kelly of Bank of New York Mellon Corp. (BK). Representatives of all eight firms confirmed that their CEOs would be traveling to Washington by commercial train or plane.

The financial crisis that drove banks to seek taxpayer money has called attention to some of the expenses their executives incur.

And there's been no shortage of news about the use of their private jets, which has been justified in the past because it provides for better security and more efficient use of the executives' time.

Citigroup, which has racked up $45 billion in direct government investments, canceled a deal to take delivery of a new $42 million Dassault Falcon 7X jet. BofA, which received $45 billion in government capital, announced it would sell three aircraft and a helicopter used by the recently acquired Merrill Lynch.

The cost of operating these private jet fleets is difficult to estimate. However, some firms - like Goldman Sachs - opt to participate in a jet-lease program instead of owning them.

NetJets Inc., owned by Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB), sells fractional ownership shares of private planes for a minimum of $406,250. Private flight firm Marquis Jets charges customers $4,600 an hour.

That's a far cry from shuttle services that run about once an hour during the weekdays. A ticket on US Airways (LCC) service between New York's LaGuardia Airport and Washington's Reagan National Airport, purchased a week ahead of time, runs about $220 roundtrip.

The flights, which include complimentary soft drinks and breakfast snacks, also have a 12-seat first-class section. Tickets for those start at about $1,000 roundtrip.

For those CEOs taking Amtrak out of New York's Penn Station, tickets on a regional train to Washington costs about $72 one way. A seat on the faster Acela express trains, which makes the trek in about three hours, is $177 one way.

- By Joe Bel Bruno, Dow Jones Newswires; 201-938-4047; [e-mail]