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An Updraft For Corporate Jets


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AN UPDRAFT FOR CORPORATE JETS

Sales are so hot that even used planes are in short supply

When Jack Welch gets an idea, he works it. During a call a few months ago with Boeing Co. CEO Phil Condit, the General Electric Co. CEO mused about his desire for something bigger than the Gulfstream Aerospace Corp. G-IVs GE now uses. What about the GE-powered Boeing 737, Welch asked? Condit agreed the plane could be modified for executive use. Presto.

On July 1, GE and Boeing launched Boeing Business Jets, a joint venture. GE will get the first two of these $35 million planes, able to fly nonstop from New York to Tokyo. "We think this is a new era of global transportation for the business traveler," says Welch.

FLYING FAXES. At as much as $3,500 an hour in operating costs, such jets are still only for the rich. Still, demand for corporate planes is on the rise. Business jet sales soared 23% last year, to $2.06 billion, and sales are expected to climb 10% more in 1996. At Gulfstream, the order backlog for its $35 million G-V is near $3 billion. Industry sources say buyers include: IBM, Gannett, Time Warner, and Seagram. "You can't even find a used G-IV in the market right now," says Al Lane, manager of flight services for Amoco Corp.

Part of what will drive future increases: the introduction of several new long-range models during the next 18 months. Boeing will deliver some 10 jets annually, beginning in 1998. Bombardier Inc., meanwhile, is spending $800 million to develop the Global Express, which can carry 12 passengers nonstop from Toronto to Beijing.

Executives say they need the jets to be globally competitive. "If you go out and make one deal, it makes sense" to invest in a plane, says David Linnemeier, director of aviation for H. Wayne Huizenga's Huizenga Holdings.

Options on the new planes go well beyond office furniture. Boeing says interior layouts might include conference rooms, offices, a bath and shower, and a fitness area. The space could even be reconfigured between flights. Other popular options: state-of-the art sound systems and the latest global navigation and weather gear. Executives "want phones with triple lines so you can talk and fax, as well as get accurate weather information," says Bryan Moss, vice-chairman of Gulfstream.

Those requests mark a change from the 1970s, when company planes were full of deep-pile carpeting and gold-plated faucets. Gold may be out, but the 1990s models still beat flying commercial.By Tim Smart in New Haven, with Seanna Browder in Seattle


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