Bank of America Corp. said Wednesday it is selling some of its corporate aircraft as the bank looks to scale back costs.
The move comes as many financial firms are giving up private jet travel as scrutiny mounts over lavish spending after the companies received billions of dollars in rescue funds.
Since October, Charlotte-based Bank of America has received $45 billion in government assistance, including a $20 billion injection last month to help with its troubled Merrill Lynch & Co. acquisition.
"As part of an ongoing cost reduction effort we have been scaling back on our use of corporate aircraft including selling three aircraft we own and the Merrill Lynch helicopter," Bank of America spokesman Scott Silvestri said. He declined to say how many planes the bank still owns.
Federal Aviation Administration records from last years show Bank of America is the owner of nine planes, including four Gulfstreams. The company acquired brokerage Merrill Lynch & Co. in January.
Chief Executive Ken Lewis is required to use company aircraft for personal trips. In 2007, his personal use of company jets totaled $127,643, according to a March 2008 filing with the Securities and Exchange Commission.
On average, a cross-country trip in a midsized jet costs about $20,000 for fuel. Maintenance, storage and pilot fees put the cost far higher.
Corporate jets, in many cases, serve a very valuable purpose, said Bert Ely, a longtime banking analyst in Alexandria, Va.
"They are offices in the sky," Ely said. "They all say it's for security purposes, and while true, corporate jets also represent a significant costs savings for executives. Time is money."
Even so, the news comes as several financial firms, some under pressure from President Barack Obama and politicians, have decided to reduce their fleets.
Last month, Citigroup Inc. reversed course in taking delivery of a jet it had planned to purchase before the credit crisis unfolded. The New York-based bank was also said to be cutting the number of corporate jets in its existing fleet from five to two.
San Francisco-based Wells Fargo & Co. has also been reported to be downsizing the jet fleet it acquired from Charlotte's Wachovia Corp. Wells Fargo completed its purchase of Wachovia in December.
Shares of Bank of America fell 52 cents, or 9.8 percent, to $4.78 in afternoon trading — dropping to their lowest level in 19 years — after trading as low as $4.72 earlier in the session.