Tesco jettisons corporate jet fleet

Tesco is poised to draw a line under its ownership of the fleet of corporate jets that sparked a storm of shareholder protest.

The UK's biggest retailer has sold or returned to their owners four of the five aircraft it was in possession of last autumn. Tesco took delivery of a new Gulfstream 550 corporate jet in September - days after revealing that it had overstated its first half profit by £250m.

One of the last two aircraft in the fleet - the Gulfstream jet used frequently by former chief executive Philip Clarke - has been handed back to its owner, people familiar with the situation said.

The final aircraft, a Hawker 800, is being handed back with the process set to be finalised by the end of next month when the lease expires, although this could come sooner, these people added.

Most of Tesco's corporate aviation team left the company in December.

The retailer, which is cutting costs and shedding thousands of jobs, is also expected to vacate a Mayfair office used by Mr Clarke and an inner circle of non-executive directors, including former chairman Sir Richard Broadbent.

Handing back the final aircraft brings to a close the retailer's operation of corporate jets, whose use escalated at a time when sales and profits were falling and Tesco was retrenching from parts of its international empire.

They came to symbolise some of the problems at Tesco under Mr Clarke, who was ousted last July and replaced by Dave Lewis, previously head of personal care at Unilever and the retailer's first chief executive from outside of the group.

Mr Lewis said in October, as he revealed that the profts overstatement was higher than expected at £263m, that he had decided to halt corporate aviation in his first week as chief executive. However the fifth aircraft, ordered by Mr Clarke, arrived a few weeks later. It was subsequently sold in November.

An end to Tesco's operation of corporate jets will be some good news for Mr Lewis when Tesco announces its full-year results on April 22.

The retailer is forecast to make property writedowns of about £3bn to £4bn, analysts say, pushing it into a multibillion pound loss for the year to the end of February.

Analysts at Deutsche Bank, Tesco's joint broker, said on Tuesday that the company may have to pay £250m a year towards reducing its £3.4bn pension deficit.

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