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Google loses secret deal with NASA for cheap jet fuel

Wait, what?

Financial trends and news by Faith Merino
September 13, 2013
Short URL: http://vator.tv/n/31f5

Well, it looks like Google is going to have to start paying full price for travel like the rest of us pleebs. Oh, you mean you didn’t know that Google had a deal with the Pentagon to get discounted jet fuel? Me neither! Not to wage class warfare on Google or anything, but damn…must be nice…Well, not anymore, since NASA has decided to nix the deal and start charging Google full price. 

As it turns out, NASA originally had a deal with Google’s Larry Page, Sergey Brin, and Eric Schmidt via the Pentagon that gave H211 LLC, a private company representing jets owned by the Google founders and chairman, a deep discount on jet fuel for NASA-related flights…whatever that means. In exchange, H211 rented hangar space at the Moffett Federal Airfield, where NASA’s Ames Research Center is based.

H211 agreed to pay $1.3 million a year in rent and cost recovery. Meanwhile, Google is leasing some Moffett land for a future office campus.

Between early 2009 and 2013, H211 bought 2.3 million gallons of jet fuel at an average rate of $3.19 per gallon. By comparison, members of the Corporate Aircraft Association, which negotiates discounted jet fuel prices for 1,600 corporate flight departments, paid an average of $4.35 a gallon.

BuuuUUUuuut, it looks like most of the Google executives’ flights were for non-NASA related trips. The Wall Street Journal reports that the main jets in Google’s fleet—a Boeing 767, Boeing 757, and four Gulfstream Vs—have been used a total of 710 times since 2007, and while most of the trips were to and from Los Angeles and New York, many were used for less businessy purposes. The planes made 20 flights to the island of Tortola in the Caribbean, 17 flights to Hawaii, 16 flights to Nantucket, Massachusetts, and 15 flights to Tahiti.

And then there was Larry Page’s trip to Croatia in July for his brother-in-law’s wedding, where Page was a groomsman and obnoxiously fidgeted with his Google Glass during the ceremony.

(Tortola, Tahiti, and Croatia…Google is starting to sound like a self-important 19th century impressionist painter.)

H211 stocked up on more than 24,000 gallons of jet fuel prior to the Croatia trip, paying roughly $3.33 a gallon, which was $1.10 less than the average rate in the region.

The contract between H211 and the Pentagon stated that the discounted fuel was supposed to be used exclusively "for performance of a U.S. government contract, charter or other approved use,” and that violations could result in civil or criminal penalties.

H211 executive Kenneth Ambrose maintains that there was nothing sleazy about the deal, and that U.S. taxpayers are "$2 million a year to the good from our presence at Moffett."

 

Image source: Flickr


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