Citigroup (C) says it won't take delivery of a new $50 million corporate jet as previously announced.

Citigroup plans to cut its fleet to 2 planes from 5. The company stressed that no TARP funds would have been used to purchase the French-made Dassault Falcon 7X.

"Citi continually explores ways to reduce all its assets, including aircraft," Hanretta said in a prepared statement. "Citi is exploring all its options for these assets, including the potential sale or lease of the aircraft. It is important to note that TARP funds will not be used for these purchases."

The New York Post, which first reported the story, said today: "Airhead Citigroup execs took their heads out of the clouds today to say they are grounding plans to purchase a new $50 million corporate jet in the wake of a national public outcry."

The Post also quotes White House spokesman Robert Gibbs as saying President Obama "doesn't believe" corporate jets are the "best use of [TARP] money."