I was recently reading about the Citation X from Cessna and its future. It will be released at the end of next year and is scheduled to be in service full time in 2013. Cessna is not giving us all of the details as yet but as I understand it the new Citation X will be faster than its current version and will use less fuel on a standard trip. This is good news for the folks at Cessna since announcing that they would not bring to market the larger Citation Columbus. They are putting the Citation X at the top of the heap and are relying on it to carry them as its flagship jet.
The Citation X is looking to turn out to be the new technological wonder of Cessna as well as I have heard tell it is “iPhone like” in the Cabin Management System. It is also going to be enabled with the Aircell phone and Internet services domestically.
Mark Huber explained it best over at AIN:
The interactive touch-screen controller at each seat, about the size of an iPhone, has a built-in Internet browser (Internet service required) and controls digital audio and video (a Blu-ray player sits in the forward closet), lights, window shades, cabin temperature, interactive moving map and cabin diagnostics. Texts can be sent from seat to seat and the VIP controls can be designated to any seat in the cabin.
It appears you can update Twitter and your Facebook status all from the seat in the Cessna. I’m looking forward to seeing this come out next year and I think this will be seen as a must have jet for the future. Great job Cessna and Jack Pelton! You are giving us all something to think about from the Cessna family again.
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.
It was posted before about the possible strike for Cessna, but that seems to be averted although the news does not get better. It is reported the production line workers were required to accept the new contract. AIN reports that after that strike was averted, the news was not better:
[Citation] will lay off 700 more employees. Parent company Textron today reported that it is “adjusting aircraft production schedules and reducing headcount at its Cessna business unit due to continued weakness in new aircraft orders.” According to Textron chairman and CEO Scott Donnelly, “We have not yet seen a discernible improvement in business jet order activity. Therefore, we are taking further production and restructuring actions at Cessna.”
They are continuing to remain a force in the business aviation space and have taken these steps to continue that process.
In a note sent to employees today, Cessna chairman, CEO and president Jack Pelton said these production cuts will lower costs and keep the company competitive. “Our strategy is to defend and protect our current markets while investing in products and services to secure our future, but we can do this only if we succeed in restructuring our processes and reducing our costs,” he said.
They will not be providing information related to their production changes for the year but we can hope this means they will be better positioned for 2011.
In the tougher economic times that we have today, there is bound to be some fallout with businesses and their employees. Cessna is apparently encountering that same problem now. AIN reports that there may be a possible strike looming in the future over at Cessna:
Cessna Aircraft made a new contract proposal on Monday that was immediately rejected by machinist union leadership, with the recommendation that its members follow suit in a vote set for Saturday. The seven-year contract offer by Cessna was described by president, chairman and CEO Jack Pelton as “very fair, given the extraordinary challenges we are facing in our economy and in our industry.” Union District 70 president Steve Rooney disagreed in no uncertain terms. He said rather than asking for a short-term sacrifice to help the company through bad economic times, Cessna was asking for permanent cuts over seven years. Rooney alleges that the Wichita-based aircraft manufacturer used the economic downturn as an opportunity “to gut the contract and saddle employees with extreme and punitive measures.” Union members are scheduled to vote on Saturday by simple majority whether to accept or reject the contract. If a majority reject the contract, union members will then be asked to vote a second time on whether to approve a strike, which will require a two-thirds majority. If the membership does not vote to approve a strike, the contract will be accepted by default. If they vote to strike, the work stoppage would begin at 12:01 a.m. on Monday, which could bring the Citation production lines to a standstill.
With few contracts being written for new business aircraft and even many of the orders now placed being canceled, manufacturers are beginning to scale back their operations and in that case part of where cuts are made will have an impact on workers. I hope that this can be avoided. We will see over the weekend if the work stoppage occurs.
Many people ask what the options are to more traditional travel of commercial airlines. We know that on a commercial airline flight there are different classes of travel, be it coach, or business class or first class, but what are the options if you want to fly via a private jet? There are 4 options outside of commercial air travel that should be discussed. The options are listed as:
Each of these four types of corporate travel come with their own unique opportunities but none of them can be argued as the best option than outright ownership. I listed private ownership as the top spot here because that is what makes most sense if your travel extends beyond those of normal passengers in the business sector. I like the chart and discussion that was put together in the Wheels Up article written by Jeremy R.C. Cox. This is a great analysis of four types of of corporate travel listed above. He has listed out the annual costs associated with each option by using a Cessna Citation X and the Pilatus PC12. The Cessna Citation X is becoming one of my favorites in that category and it was interesting to note his analysis using that model.
The conclusions drawn by Cox in the article state:
“The Magic Formula: After analyzing the numbers listed above, you will see that there is a magic formula that comes in-to-play when you are deciding whether you should rent, or lease, or own. In this case we learn that you will have the lowest operating cost, per flight-hour ‘overall’, if you own your aircraft when your annual utilization is above 240 hours of flight-time.”
Having this type of analysis is crucial to the process of determining your own type of corporate or personal private jet usage. The analysis includes other costs that are not necessarily included in this formula such as your region, the type of travel you are doing and the Direct Operating Costs (DOC). This can be discussed at the time you decide on your own corporate jet purchase.
We are continuing to see more and more commercial airline companies teaming up with private jet charter companies to offer different opportunities in travel. The most recent company to join the private jet charter market is British Airways.
British Airways has teamed up with CitationAir to offer the latest in no frills private jet charters. AirlineTrends.com recently reported:
British Airways has teamed up with CitationAir, the private jet charter subsidiary of Cessna Aircraft, to offer its passengers a private jet connection within North America and the Caribbean. The new PrivateConnect service pitches itself as a ‘no-frills’ private jet service.
It is also stated in the article that:
“The service is available to anyone who has flown with BA in the past 12 months, members of BA’s frequent flyer programme, as well as employees of the airline’s corporate clients. BA customers can also use PrivateConnect to fly within North America if they haven’t arrived on or are due to depart onto another flight. Costs range from USD6,000 to USD10,000 per jet per hour depending on the type of aircraft. Chauffeured transport will be on hand after clearing customs to drive customers between their British Airways flight and CitationAir private jet. BA currently flies to 19 destinations in America.”
British Airways is joining Korean Air who recently joined with FlexJet and they join of course Delta and Lufthansa who has been partnering with private jet companies since 2008 to offer the service. As stated in their report, private jet companies, due to the current economic issues and industry decline are finding other distribution channels for their services. This also offers up ways for some of the larger commercial airlines to offer ways for their premium customers to find ways to expand their ability to land at airports where the larger commercial airlines are not able. This allows some of the passengers to go to destinations that were not available to them in previous bookings. This does make sense for the private jet companies, the airlines, and the luxury passengers.
I have seen this asked many times in forums and in other circles. Many jet owners need not worry too much about the speed unless of course you are in a hurry. Overall, the speed of an aircraft might be one of the criteria for picking what works for your needs, but you have to weigh all factors when purchasing your corporate or business jet. I was reading recently over at the FlightGlobal blog about the new Gulfstream 650 and its recent announcement at the EBACE 2010 event of its latest test of reaching mach .925. The announcement is a great benchmark and something that is a feather in the cap of the folks over at Gulfstream. The info at Flightglobal stated:
On May 2, Gulfstream achieved mach .925, when certified will make the new business jet the world’s fastest civil aircraft. Gulfstream conducted its high speed testing at 42,500 feet and achieved buffet-free banking up to 45 degrees at high speed cruise. The program has accumulated 138hr over 48 flights since its November first flight. The third flight test aircraft is expected to make its first flight in the next week. The company expects to receive its Type Inspection Authorization from the FAA in the fourth quarter of 2010.
The interesting part of the post however, and the post itself was interesting, was not necessarily in the above statement, but more with the comments that occurred on the post itself by the people that read the announcement. They were debating whether the Citation X and the Gulfstream were comparable. This goes along with the idea of having a list of the needs you have when making a decision to buy a corporate jet. Take a moment and read through the comments and see if you agree or disagree with the ideas there. If you had to choose an aircraft what would be your criteria?
I have been immersing myself into some of the economic statements being made by a number of the business and executive jet manufacturers for their forecasts of 2010 and what they have experienced over the last three years since the slide of the market for corporate jets. Cessna seems to have been hit very hard and in 2009 they had a tough sales cycle. Their CEO Jack Pelton reflected on the last few years and Flight Global reported some of his statements to include:
“Last year was terribly rough for us,” says Cessna president Jack Pelton. “We delivered 275 aircraft compared with 340 the previous year, but our original projection for 2009 [before the downturn struck] was 525 aircraft.” Pelton blames the spending curb on the economic downturn and the destructive negative political and social rhetoric surrounding the use of business aircraft that surfaced in 2009.
“People simply stopped buying aircraft. We were forced to cut production rates across all our models to bring supply in line with demand, and cut 50% of the workforce,” he says.
The plummeting values of used aircraft – particularly in the light and mid-size sectors – also drove down sales. “The prices of pre-owned aircraft were terrible for us. People were asking ‘why buy new when I can get a two-year-old aircraft so much cheaper?”
He says that used inventories are shrinking and that prices are starting to stabilise. “Cessna will ride out 2010,” and will deliver around 225 Citations, Pelton says. “We hope to see recovery in 2011.”
Many of the Cessna peers are also looking ahead to 2011 as a turnaround year. I think the forecast is not that the market will be worse in 2010 and 2011, but remain stable as 2012 sees a turn around in the market to see increased sales. As we see the economy turn around so too will sales of corporate jets. This is a sales cycle that will see better times
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.
