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Aviation History
1998
1998 - 2373.PDF
CORPORATE AVIATION Big-jet business Ultra-long-range business jets are sure to attract interest at Farnborough, but is there enough to sustain all contenders? GRAHAM WARWICK/WASHINGTON DC THIS IS AVERY good time for business jet manufacturers. By almost any measure -orders, deliveries or backlog, in aircraft numbers or dollar value - the industry is setting records. Manufacturers also expect to continue doing well - as long as the US econo my remains strong. While no manufacturer or market analyst is foolish enough to forecast that the US economy will continue its upward trend indefinitely, they do believe that the next downturn, when it comes, will be milder than the last- at least in its effect on business aviation. History suggests that a recession would empty the orderbooks, but analysts believe die industry fundamentals have changed since the last boom turned to bust in die early 1980s. That boom was fuelled by the novelty of busi ness aviation, believes Michael Paslawskyi, an economic analyst with equipment financing company The CIT Group. When recession hit and corporate profits fell, shareholders saw business jets as unnecessary perks. Now diey see corporate aircraft as essen tial time-saving tools. "The attitude has changed at shareholder level," Paslawskyi believes. "They don't want to see an expensive executive sitting at an airport wasting time." That perception of the corporate aircraft as a business tool will be vital to success in the new market for ultra-long-range business jets in the 12,000km (6,500nm) class. SUSTAINING DEMAND There are already more than 200 of these air craft on order from die four manufacturers. But will the market be large enough, and last long enough, to sustain the planned production of over 80 aircraft a year? And does die apparent corporate acceptance of machines costing S40 million or more mean thata supersonic business jet costing perhaps twice that can be successful? The Airbus A319 Corporate Jet offers the widest cabin in the ultra-long-range business jet class Just how large the large aircraft market will be "... is too early to say", believes Paslawskyi. Only one of the four ultra-long-range aircraft has entered service and all four manufacturers are still heavily promoting their products to stimu late the market, he says. The orderbooks look impressive. Gulf- stream, first on to the market, has booked 100 orders for its GV since its launch in 1992. Bombardier launched its Global Express in 1993 and has 80 orders. Boeing has announced 29 orders for its 737-based Business Jet, un veiled in 1996, while Airbus has 12 orders so far for its A319-based Corporatejet, launched only last year. The GV entered service last year and Gulfstream believes the results are already com ing in. "The GV is definitely being used for long-range flights," says chief operating officer Bill Boisture. "More people arc getting used to 13-14h flights." Despite this apparent early acceptance of the realities of ultra-long-range flight, Gulfstream is not revising its estimate of the market's size. "We said we thought the market was for 400-600 air craft over 10 years, and we're not shy in saying diat we think 400 is right," Boisture says. "Our plan was to take 50% of the market. We're com fortable with 100 orders five years in." Bombardier, meanwhile, is sticking with its estimate of a potential market for 550-800 air craft to 2010, excluding governments, says Business Aircraft division president Michael Graff. The Global Express programme is based "conservatively" on selling 250 units over that period, he says. With the aircraft just • FLIGHT INTERNATIONAL 2 - 8 September 1998 133
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