Kate Sarsfield/FARNBOROUGH

The major business aircraft manufacturers paraded their wares at the Farnborough air show in the hope of stimulating further interest in this burgeoning market sector. Galaxy Aerospace's $17 million, super mid-sized Galaxy business jet made its world debut, and the company announced pre-show orders valued at more than $350 million.

Meanwhile, Boeing revealed that it has sold 35 ultra-long-range Boeing Business Jets to date, more than three times the total of A319 Corporate Jetliners sold by rival Airbus Industrie. Airbus did announce one order at the show, from an unnamed Middle Eastern customer, bringing total sales to 10 aircraft.

The feasibility of a supersonic business jet (SBJ) market was also hotly debated, following Gulfstream and Lockheed Martin Skunk Works' decision to copy Dassault's lead and study the market for this aircraft type. Gulfstream Aircraft president Bill Boisture says the decision to study the SBJ was prompted by "-the globalisation of business, the emergence of far-flung markets, the rising need for security and the viable operation of large, long-range aircraft in fractional ownership".

The exhibition coincided with the publication of Teal Group's annual business aircraft production survey. The report, which was generally welcomed by the industry, declares that the business jet market will be worth around $53 billion over the next 10 years, with more than 4,000 aircraft being ordered during this period. "After spending the late 1980s and early 1990s in the doldrums, the business jet market is now in the middle of a terrific growth spurt," says Teal's leading market analyst, Richard Aboulafia.

The report attributes the profusion of new aircraft models, spurred by new technology, as the key element fuelling the growth of the market. It warns, however, that the unprecedented number of new models has created a "-near supply-push phenomenon, which has created a lot of up front demand, but is not sustainable". Aboulafia also warns that sales are predicted to drop after 1999, but are not expected to reach the recessionary levels of 1987-1996. "Still the worst years of our forecast period [1998-2007] will be better than any of the past 10 years, except 1997," he says.

Teal's sanguine outlook is mirrored by business aircraft manufacturers, which continue to announce record orders and devise revolutionary sales programmes to boost orders and attract the ever increasing numbers of concept buyers. Gulfstream announced a joint venture with GATX Capital which will make the GIV-SP and V business jets available on short-term operating lease, and allow access to an aircraft with no capital investment. Gulfstream and GATX will purchase five GVs and one GIV for $210 million and has taken options on three more of each. Gulfstream's Boisture believes that the short-term leases will expand the market for its aircraft.


Gulfstream has now placed 30 GIVs and two GVs in its fractional ownership programme, and a further 12 GIVs have been sold to its Middle East investors to expand the programme in the region, which is also being actively pursued by Executive Jet, operator of the world's largest fractional ownership programme NetJets.

Much attention was focused on this Montvale, New Jersey-based operator, which once again revealed its relentless appetite for large aircraft orders. The recipients of Executive Jets' apparently seamless pockets were Dassault and Raytheon, which snapped up orders for 12 Falcon 2000s and 20 Hawker 800XPs (with an option to supply a further 16 models), respectively. The bulk of the aircraft will be used for NetJets' European operation.

Some observers are beginning to question how Executive Jet, which now has 285 aircraft on order, valued at $3.8 billion, can sustain this rate of growth in the current economic climate. Richard Santulli, Executive Jet's chairman, is undaunted. "We will have a recession, but we don't expect to see a degradation in our business. Fractional ownership will become more appealing to large companies which don't want the expense of aircraft ownership," he claims.

Santulli maintains that Warren Buffet's acquisition of Executive Jet in July has placed a "stamp of approval" on the fractional ownership market. "Now that someone with the stature of Warren Buffet owns the company, more people are beginning to stand up and take notice . As far as we are concerned, we have only scratched the surface," he adds. Santulli forecasts that its US customer base will grow from 1,050 this year to 2,500 in four years. In contrast, the company's European operation, which only has 40 customers, is predicted to grow to 200 in the same timeframe.

Executive Jet plans to add between five and seven aircraft a year to the NetJets Europe fleet, which it jointly owns with Switzerland's Zimex Aviation and Air Luxor of Portugal. Santulli has also denied rumours that the company is ditching its plans to expand into the Middle East and Asia. The Middle East programme is scheduled to start shortly after.

Santulli concludes: "We look at where we will be in 10 years from now and we expect to be huge - but it is going to cost a great deal."

Source: Flight International