It was only a few years ago that Embraer was a minor player in the corporate jet industry with only a 3 percent share. It is making great strides recently in the business aviation industry having gained that number to nearly 20%. The company that is based in Brazil is taking the line of mid-size jets it manufactures in the Legacy 450 and 500 jets, the Phenom light jets and the Legacy 650 jets, Lineage 1000 jets to new levels that they hope will help them gain their goal of a 30% share of the business jet market.
Recently, the company opened a new final assembly facility in Melbourne, Florida, and the CEO of the company, Fred Curado indicated that he was very happy with the manufacturer’s position in the industry of business jets. In fact, he recently revealed that he hopes to expand further.
“I do see Embraer one day venturing into the ultra-long-range, large-cabin business jet segment,”he told AIN in an interview. He stated in that recorded interview, their line would compete “with the [Bombardier] Globals and the larger [Dassault] Falcons,” he said.
These are good signs of growth for the industry and it will be interesting to see if Embraer expands to the levels it seeks in the business aviation industry.
I talked earlier about the fact that the holidays were over for charter jet companies, however, it does seem that at least one wholly owned company in the charter jet world is seeing growth over this time last year. XOJet, based out of Brisbane and California, is reporting that they are up 50% over the same time last year and in fact they are increasing their fleet to meet the demand. They are adding to their fleet to meet the demands of customers by adding a Bombardier Challenger 300 series and has added last month its first ever Challenger 605. The company is reporting that it plans to add additional jets in its fleet in the future in 2011.
As a company they have increased its numbers by 50% but in the large market cities of Los Angeles, New York and San Francisco it has seen larger numbers. The commercial operations leader of the company, Brad Stewart has stated:
“Our growth in New York, Los Angeles and San Francisco continues to accelerate, with all three markets growing more than 70 percent in recent months and exceeding 80 percent overall growth in November.”
I hope XOJet continues to see the growth in its industry and they continue to be a leader in chartered jets.
Bombardier is joining the announcements coming out of the National Business Aviation Association in Atlanta this week. Bombardier is introducing two new jets that are geared for long range. The Global 7000 and the Global 8000. The Global 7000 is the larger of the jets and has a 7300 nautical mile range. The Global 7000 is a four zoned cabin jet. The Global 8000 is the smaller of the two as a three zone cabin jet and has a range of 7900 nautical miles. “By extending this great family, we are once again offering a business jet travel experience that is unmatched and ahead of its time,” said Steve Ridolfi, president, Bombardier Business Aircraft.
The Global 7000 and the Global 8000 jets are not going to be a part of the fleets until 2016 and 2017 respectively. They both are coming with the same price tag at $65 Million as their 2010 price. it might be a different picture in the future however and I have not heard any numbers on current sales. It is nice to see some new lines coming out and as always it is fun to see the announcements each jet company has out there. We will continue to keep track of the announcements and let you know of them.
Don’t get too excited about a quick recovery as the recovery is not set for another year according to Honeywell, the avionics, equipment and engine manufacturer. The report that Honeywell is reporting on indicates that there should be one more year of an economic slide in store for the business aviation industry in 2011, with the rebound recovery and growth occurring in 2012. Rob Wilson the President for Business and General Aviation for Honeywell states:
“I think the downturn in 2009 demonstrated for all of us that nothing is really firm in an economic calamity as we saw, but that said, we are seeing a lot less volatility in that order book, a lot more stability and more of a sense of continuity.”
The report indicates that Honeywell predicts deliveries of between 675 and 700 new business jets for this year in 2010 which happens to the the lowest total since 2004. They predict that in 2011 another year of less than 700 deliveries will be the case.
AIN reported on some of the numbers of the report:
Based on the results of the survey, Honeywell sees a slow but steady change in aircraft category demand over the next five years. Through 2015, medium to large aircraft such as the Bombardier Challenger 605, Dassault Falcon 7X, Cessna’s Citation X and Embraer’s growing Legacy family will account for 32 percent of the projected purchases, while light and medium business jets including new designs like Bombardier’s Learjet 85, the Gulfstream G250, Embraer’s Phenom 300 and Cessna’s CJ4 will make up approximately 22 percent. Long-range and ultra-long range aircraft such as the new Gulfstream G650 and Bombardier’s Global family will garner 21 percent. Those longer-range aircraft will constitute nearly 50 percent of the delivery dollar value over that same period. Very light jets will constitute the remaining 25 percent of demand but equate to only five percent of the retail shipment value. While the personal jet segment is not a part of the survey, the forecast calls for deliveries over the next 10 years of 500 to 1,000 of the aircraft such as the still-developing PiperJet and the slowly developing Cirrus Vision.
The report from Honeywell in the past has not been the most accurate and in fact that have missed the numbers considerably over the last few years, but this is some good news forecast for our industry.
The company over at Bombardier has been working hard to stay competitive and the folks over at AIN have been keeping up with the story since they released the information about Bombardier talking about a competitor to the Gulfstream 650. Bombardier announced at the NBAA show that they are launching a new “Global Aircraft Family”. AIN reported:
…Bombardier this morning announced it will launch a “new Global aircraft family” on the eve of the business aviation show. “It was strategically necessary for Bombardier to announce the program as soon as possible,” business aviation analyst Brian Foley told AIN. “Doing so contains potential customer defections and gives the rest of the market a reason to wait and see before placing an order. Not doing so would have essentially conceded that segment to Gulfstream.” The Canadian aircraft manufacturer today said its board of directors gave an “official go-ahead to launch the expanded Global aircraft family.”
The new aircraft being launched by Bombardier will be announced on October 18 and it will be interesting to see what they have coming. AIN opined that perhaps Bombardier’s announcement:
…suggests that it will be a new clean-sheet design–the rumored M170 program–though a Global XRS derivative is possible, but apparently now remote. Potential powerplants for the so-called “Super Global” are said to include the Rolls-Royce BR725 and a GE Tech X-based engine. George Tsopeis, Zenith Jet’s vice president of aviation services, said an XRS derivative would cost $200 to $300 million to develop and could be in service in 2013, while a clean-sheet Global would cost more than $1 billion and wouldn’t enter service until at least 2016.
More to come on this announcement after it is made in the middle of the month.
I had a chance to catch up on some of my reading this week on what is happening in the market and I found an interesting snippet at AINOnline:
“Elevated used inventory, attractive used pricing and macro uncertainty continue to hold down demand for new business jets,” JPMorgan Equity Research noted in its latest business jet monthly report, issued this morning. “As a result, OEMs are eating further into their backlogs, and if these don’t stabilize in the coming quarters, further [production] rate cuts seem likely.
This is obviously not good news for those that are producing new jets, but those that have inventory in used jets it means now is a good opportunity to make a push for sales with those jets they have. The report goes on to state:
As for pre-owned jets, JPMorgan said used inventory of in-production models edged up to 11.8 percent in August versus 11.6 percent in July, with all categories showing increased inventories.
“We believe this increase is a bump in the road and expect that inventories…will continue to decline gradually,” it added. Meanwhile, average asking prices for pre-owned jets increased 1.3 percent in August, reaching $11.4 million.
It seems that used inventories will be reduced which is good news for all. When those inventories are reduced the new jets coming into production will also increase.
We are continuing to get reports from all of the sectors in the industry that the slide has slowed and the recovery has begun. It may be wishful thinking on the part of many of the manufacturers at this point but not for two separate business jet companies.
Business Jet Traveler reports that Bombardier CEO and President Pierre Beaudoin opines that he feels that the economic recovery is shown through the idea that less cancellations are occurring from customers. He specifically states that Bombardier is “starting to see signs of recovery as shown by the significant reduction in business aircraft order cancellations”, and this is backed by the statistics that during the second quarter this year they only had 26 cancellations of ordered aircraft while the same time period last year showed 80 cancellations. It appears that their orders may also be on the rise.
It is also reported that Gulfstream is seeing the market begin to get better and that it is not where it needs to be in the big picture but it is on the rise and headed in the right direction.
With these two companies showing signs of improvement and other manufacturers beginning to report the same numbers and forecasts, we can begin to see that the economic problems for companies in this industry may soon be able to recover from some of the worst conditions seem in a recent memory.
There is a how to for just about every single industry out there. That is no different than a simple “How To Buy A Personal Jet“. One of the things that stood out to me was the basics of the “how to” section. For instance it seems pretty simple to pick out the jet you need. All you need to do is find out how many passengers will be using the jet and how far you will be traveling.:
Determine the size and flying range you’ll need. Light jets ($3 million to $8 million) can take 5 to 8 passengers roughly 2,000 miles (3,219 km); midsize executive jets ($9 million to $16 million) can take up to 9 passengers from 2,000 to 3,000 miles (3,219 to 4,828 km); and large executive jets ($17 million to $45 million) can carry 12 passengers more than 4,000 miles (6,437 km). The more popular makers and models are: Learjet, Boeing Business Jet, Cessna, Gulfstream and Dassault Falcon.
Of course there are many more variables to take into consideration when purchasing a corporate jet and we will intend to discuss some of those things here, but I like when they boil things down to the very basic levels. If you are in the market for a corporate jet, a personal use jet or are looking for more information,
contact us. We can also make this a simple process, but the most simple we can make it is to allow us to handle your purchase.
It seems today that every company is “going green” and many companies are entering in the world of cause marketing where they align themselves with nonprofit organizations to partner in raising money or helping with campaigns that provide the world with a place better tomorrow than it is today. I am always on the lookout for companies that provide information about what they are doing in the world of corporate responsibility. Bombardier is a company that I wanted to spotlight.
Bombardier is doing some great things in the area of corporate responsibility and their President and CEO Pierre Beaudoin has this to say about their achievements:
Our achievements include reducing our water consumption by 35%, energy consumption by 17% and greenhouse gas emissions by 10% between fiscal 2004 and 2009. In fiscal 2009, we also advanced pioneering products such as our ECO4 energy-saving rail technologies and our CSeries commercial aircraft.
We take pride in our listing, again, on two Dow Jones Sustainability Indexes and, for the second time, on the Carbon Disclosure Project (CDP), the world standard for carbon disclosure methodology and process. The CDP named Bombardier one of the 10 Canadian Climate Disclosure Leaders.
We continue to actively promote the UN Global Compact’s principles of social responsibility and we are in the process of embedding these principles in our Code of Ethics and Business Conduct.
One of the other campaigns I see that they were instrumental in taking part in was the 2010 Vancouver Paralympic Winter Games. Aligning themselves with these types of campaigns will keep that company on track to be a leader in corporate responsibility initiatives. I will be looking to some of the other corporate jet companies to see how they stack up in their own corporate responsibility and how they are joining in the stand to help make this world a better place.
