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Hollywood stars are among those boosting the soaring private aircraft industry, reports Ron Toft – but just wait till it goes supersonic
In the United States, it seems you’re not really a highflier until you can sail the skies in your own private jet.
Oprah Winfrey and Steven Spielberg are both proud owners of Bombardier Global Express jets, for instance – as are Celine Dion and the owner of Cirque du Soleil, Guy Laliberté.
For a mere US$45 million, they can fly non-stop from London to Sao Paulo, if they so wished, and refuel in just 15 minutes. The Global Express tends to be used as an office in the clouds; while customers usually shun gold fittings, a wood-panelled bar at the front of the cabin is pretty much the norm.
“These are great times,” boasts Richard Aboulafia of the booming private jet market. Aboulafia is vice-president, analysis, of the Teal Group Corporation, an aerospace and defence consulting firm that provides market intelligence to government and industry.
“High corporate profits, business globalisation, high commodity prices and emerging market growth are producing another all-time market high this year – 999 planes worth US$16.4 billion, with further growth into 2009,” he writes in Teal’s business jet bulletin.
Governments were the first to order jetliners with customised interiors. In the 1970s, the heads of Middle East royal families discovered “it was possible to fly in surroundings far exceeding in luxury anything available in first class,” according to Lufthansa Technik, a company specialising in the conversion of jetliners.
“Nowadays, they have been joined by movie stars and other celebrities who want to fly in exquisite comfort. A room for physical exercise with adjoining refreshment bar, a bedroom decorated in French Renaissance style, an air-conditioned horse stall or a garage for one’s favourite Rolls in VVIP (Very, Very Important Persons) class – above-the-clouds luxury knows no bounds.”
Stars such as Gwyneth Paltrow and Ben Affleck will have use of a private jet written into their contracts, while others – including Harrison Ford, Julia Roberts, Mel Gibson and Tom Hanks – pay around US$1 million a year into a time-share scheme run by a company called NetJets, which includes maintenance and 50 hours’ airtime. The real heavyweight of the skies, however, is John Travolta, who owns his own Boeing 707, with Silicon Valley entrepreneurs said to be following his example.
It was recently reported that a Saudi billionaire has ordered from Airbus a customised double-decker A380 – the “super jumbo” that has only just entered commercial service. Prince Al-Waleed Bin Talal’s US$319 million “flying palace” will be decorated in the livery of his Kingdom Holding firm and is due to be delivered by 2010.
Everyone in the business aviation market is benefiting from current growth, from aircraft manufacturers and aircraft management and maintenance companies to banks and other financial institutions that advance the cash to buy jets and other aircraft.
Although a “modest dip” in the market is predicted post-2009, the business jet sector “looks set to remain considerably larger than before its pre-1996-2001 transformation, when it experienced a 350 percent growth”.
Teal forecasts, between 2007 and 2016, 12,000 business jets, worth US$173.2 billion, will be delivered – a 63 per cent increase on the US$108.7 billion worth of jets delivered between 1997 and 2006.
Just as the size of the market has grown over the years, so the range of aircraft models has expanded. In the early 1960s, the relatively few business jets available included the Sabreliner, JetStar and Learjet. Now, customers are spoilt for choice – there is something to suit every taste and budget.
At the bottom end of the market are small jets with a price tag of US$1-4million – such as Cessna’s Mustang, Embraer’s Phenom 100 and the HondaJet – while, at the top end are business jetliners like the BBJ (Boeing Business Jet) and Airbus A318 Elite.
Fully equipped, jetliners can cost their owners as much as US$78 million.
Hawker Beechcraft is one of the top five manufacturers of business jets (alongside Bombardier, Dassault, Gulfstream and Cessna). It sells both jets and turboprops, the former ranging in price from around US$3.1 million to US$6.1 million and the latter from about US$6 million to US$20 million. The corporation is experiencing particularly good growth in its international markets, especially Eastern Europe, Russia, the Middle East and Brazil. Its three main customer groups are large corporations, smaller, privately-owned businesses and wealthy individuals.
Bank of America provides finance for the purchase or lease of business aircraft in the US – and, more recently, in Western Europe, Australia and New Zealand. It has been active in this field for 15 years and has grown its portfolio to more than US$5.3 billion with more than 750 clients.
“It’s a strong market – extremely strong in some regions,” says Frankfurt-based Toennies von Limburg, Bank of America’s director of international sales for corporate aircraft finance. “Historically, about 80 per cent of all business aircraft operated out of North America. Now, more than 50 per cent of all new deliveries are going to the international market.
“It’s very difficult for the many companies now doing business in Eastern Europe to book commercial flights for their entire management team to visit, say, production facilities at several locations. It might take two or three days to make such a trip using commercial airlines – but, possibly, only a single day using a corporate aircraft.”
The market may yet grow further with the development of supersonic business jets (SSBJs). SSBJ projects have been in the pipeline for more than 20 years – one company, Dassault, shelved development in the late 1990s, but confirmed in 2004 that it was still looking at the idea. It is hoped it will soon be possible to overcome the technological problems faced by designers, notably sonic boom-related noise and high fuel consumption.
Teal reckons there is an 85 per cent chance of an SSBJ programme being launched by 2020, while noting the very top end of the market “seems to be willing to pay any price”. Clearly, when money is no object, only the sky is the limit.
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