I work with a number of C-suite executives at Fortune 500 companies, many of whom fly on corporate aircraft to guest lecture in our classes. They could fly commercial for less money, but there are huge opportunity costs for them to do so.
The same is true of President Harris Pastides and other USC administrators.
In the article “As college tuition soars, USC spends millions on mostly empty private plane,” USC spokesman Wes Hickman said using the school’s plane is “the most efficient use of staff time” but the story did not explain why.
So I quickly ran the numbers to see how efficient it is.
President Pastides’ salary works out to about $495 per hour. Say he flies with another administrator or two (even though that is far from a full plane), whose salaries could work out to $75-150 per hour. If their flight is delayed, it is costing the university $600-$700 per hour to have them sitting somewhere.
So, what’s the chance of that? I looked at the flights into Columbia Metropolitan airport on June 3, when there were no weather problems.. Of the 15 flights scheduled to arrive after noon, two were canceled (13 percent) and seven were delayed (46 percent) — one for an expected five hours.
The same analysis goes for Ashley Landess’ question “What is so important that a university administrator needs to reach a place in 30 minutes instead of an hour and 30?”
On top of the $600-$700 cost for the hour’s delay, there might be a huge lost opportunity (a $50,000, $100,000 or more donation) if the administrator is on one of those flights that was canceled.
It’s easy to create a straw-man case that makes university leaders look entitled and wasteful for using the university aircraft by comparing the direct cost of the aircraft vs. the alternative direct cost of flying commercial. But using the plane is not a bad deal for students or taxpayers.
The opportunity costs of delays and cancellations create the economic case for the use of university instead of commercial aircraft.
Patrick M. Wright
Director, Center for Executive Succession
USC Darla Moore School of Business
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