LONDON // A few years ago, it would have been a standard City lunch: two dozen bankers and their clients whisked by helicopter from London to a five-star Michelin restaurant in the British countryside before heading back to the capital. Such an outing would have cost about £15,000, (Dh79,500) according to Andrew Whitney, co-founder of FlyMeNow, a private aircraft charter company, small change in the era of multibillion City bonuses and soaring share and property prices.
But times have changed and corporations, especially banks and financial institutions - the new pariahs of capitalism - are terrified that they will appear extravagant. "We were all set to take them this week," said Mr Whitney. "Then they cancelled. They said it would have been too ostentatious. They said it would have been embarrassing. So they are going to spend the money on smaller events." The bank - which he did not name - is not the only corporation that is trying to show a more humble face amid one of the worst economic downturns in history.
Another financial institution has cancelled its annual skiing trip to Switzerland. "We'd take 30 clients and 12 staff to Geneva on a Friday, get them up to St Moritz and then take them home on Monday. That cost £28,000. I asked them a few weeks ago if they wanted the same this year and they did not reply." Although companies are increasingly scared of being pilloried for using private planes, Mr Whitney said there are still many super-wealthy people who would not dream of taking a commercial flight.
"We had a Russian in London who paid £60,000 for a plane to take him to Georgia to do some business for a couple of days. It was a big, big plane. Just for him. "I had an English client who paid £12,000 for a plane to take him and three friends to Madrid to shoot partridges. We still get lots of Russians who want us to take their families around England to inspect schools." Avolus, another London-based private jet broker which specialises in the Russian market, said business was holding up. "Our clients still have lots of money," Andrej Jevtjev said. "They travel a lot and don't want to go on a commercial flight. The bigger and newer the plane the better. It's about prestige."
These are testing days for everyone who offers luxury goods or services such as manufacturers of top-end cars, yachts and clothes, art dealers and high-end estate agents. But the private aviation industry is especially vulnerable. Michael Boyd, a Colorado-based international consultation on aviation, said the private jet has become "ugly" because it epitomises "the fat corporate pig". This image, he said, was largely the fault of a handful of very senior executives, for whom a company jet was a status symbol, much like a diamond-encrusted watch.
Americans reacted with outrage when in November, the CEOs of three motor manufacturers, Ford, General Motors and Chrysler, flew in their usual private luxury jets to Washington to beg Congress for US$25 billion (Dh93bn) of taxpayers' money. It was, the media said, such extravagant displays of wealth that had brought the companies to the brink of bankruptcy. Subsequently, many US companies have been frantically dismantling their fleets of executive jets.
In Europe, the situation is slightly different. Most companies prefer to charter aircraft or buy shares in one, rather than own them outright, said Gary Lachlan, chief executive of the British Business and General Aviation Association. At Luton airport, where private flights make up around a quarter of the traffic, there has been a drop of around 30 per cent in such flights in the past year. "We are back to the level of 2006. That is not a disaster - and it shows how things boomed in the past few years - but it is serious," he said.
The evidence about the impact of recession on the luxury market generally is anecdotal and fragmentary. Analysts say this is because there are so many sources of wealth - such as shares, bonuses, salaries, art and property - all of which are affected differently by the downturn. The very rich have also been hit by the recession, said James Lawson, of Ledbury, a research agency in London which specialises in spending on luxury goods.
"In western markets we have seen everything, from [spending on] jewellery to cars being cut back. Pockets of resilience remain, especially in economies that are more insulated from global credit markets. Elsewhere luxury consumers are being much more discrete about how they buy, switching to anonymous shopping bags." That theory is supported by some of London's best restaurants, which are offering cut price menus now that their lunch time regulars either have no expense accounts or no jobs. At L'Atelier de Joel Robuchon, with two Michelin stars, a two-course lunch costs a modest £19.
"This is the most important economic crisis I have faced in my career. Restaurants will close if they don't adapt," said Mr Robuchon, one of the world's most decorated chefs. There are similar stories in London and throughout the UK, from estate agents, art dealers, caterers and interior designers, who exist by selling to the rich. Some elite manufacturers in mainland Europe - such as Gucci ? have also complained of a downturn. But others, like LVMH, with brands such as Louis Vuitton and Dior, have done well, with increased sales in Asia and the Middle East to compensate for falls elsewhere.
But generally it is a bleak picture. Last week Richemont, the Swiss company that owns Cartier and a host of other renowned watch and jewellery brands, said market conditions were the "toughest" since it was founded 20 years ago. "It added grimly that it saw "no reason for optimism". sfreeman@thenational.ae