Graham Warwick/WASHINGTON DC
Executive JET (EJI) is heading for another large aircraft order for its NetJets fractional ownership programme, this time for entry-level business jets.
Main candidates are Cessna's Citation CJ2 and Raytheon's Premier I. An order may be announced next month at Farnborough.
NetJet's current entry-level aircraft is the Citation V Ultra light business jet, but all 75 aircraft ordered by EJI have been delivered and the model is no longer in production. The only shares available are in pre-owned aircraft.
NetJets has ordered 20 Citation Encores, but EJI feels the aircraft - an upgraded Ultra - is too close to the larger "super light" Citation Excel to be the ideal entry-level aircraft. NetJets is taking delivery of 100 Excels, and the aircraft is proving popular with current Ultra shareowners. As a result, shares are sold out for the next 16 months, forcing EJI to offer new entry-level customers used Ultra shares or interim leases on company-owned "core fleet" aircraft.
EJI plans to order around 10 Citation Bravo light jets for NetJets Europe, but does not consider the aircraft to be suited to its US operation. The issue appears to be product differentiation: at $9 million, the wide-cabin Excel looks more attractive to NetJets than the $7 million Encore; while the $4.3 million CJ2 looks like a better entry-level aircraft than the slightly larger, $4.9 million Bravo.
The problem EJI faces is delivery timescales. Cessna received US certification of the CJ2 on 21 June and will begin deliveries by year-end against a backlog of 160 orders. The aircraft is sold out into 2003.
Raytheon, meanwhile, expects delayed certification of the $4.9 million Premier I in the third quarter. Deliveries are to begin immediately, but the company has a backlog of over 240 orders and the aircraft is sold out into 2005.
NetJets is already facing delays on several types as manufacturers strive to increase production rates. Deliveries of Excels, Raytheon Hawker 800XPs, Gulfstream IV-SPs and Boeing Business Jets (BBJs) have all slipped, says senior vice-president Kevin Russell, forcing EJI to increase charter subcontracting to meet aircraft availability guarantees. "We have backlogs on most of our aircraft," says EJI chairman Richard Santulli.
• EJI formally inaugurated its new operations centre in Columbus, Ohio, on 14 June. The facility is designed to handle 400 aircraft, the fleet size which NetJets' US operation is set to reach by the end of 2002. The centre currently manages the operations of around 260 aircraft, averaging 300-400 flights a day. On average, NetJets is adding over 35 owners, six aircraft and 50 pilots a month.
The old operations facility at Columbus is being converted to a training centre. FlightSafety International (FSI) has installed an Ultra simulator, while deliveries of a Citation X and Excel machine are due in September and December, respectively. EJI and FSI are both owned by Warren Buffet's investment firm Berkshire Hathaway.
Source: Flight International