November 13, 2024
A report last Friday by Corporate Jet Investor (CJI) speculated that Flexjet might be readying a billion-dollar order with Gulfstream. The item came after Phebe Novakovic, CEO of General Dynamics, parent of the business jet manufacturer, told analysts the division was working on a big deal and it was with an existing customer.
CJI wrote, “During the company’s recent fourth-quarter investor relations call, General Dynamics chairman and CEO Phebe Novakovic said that Gulfstream is in the latter stages of finalizing a large multi-aircraft fleet order. Although Novakovic would not expand on who the client is, she did say that the $1 billion order is by a current customer and that it is for different aircraft types.”
The reference to “current customer” apparently eliminates some notable owners of significant fleets. Vista Group (Bombardier and Textron), Wheels Up (Textron), and JetSuite (Embraer) come to mind. It also put a spotlight on Flexjet and Qatar Executive. CJI tabbed the duo as the “obvious” choices. The B2B website did note China’s Minsheng was the subject of something similar several years ago.
“Back in 2014, before the Minsheng order was finalized and announced, Novakovic used exactly the same language to describe it during an investor relations call. China’s economy has been slowing in recent years, so it is unlikely that Minsheng would be placing another order any time soon,” CJI noted.
NetJets, which counts the Gulfstream G450 in its current fleet, has seemingly cast its lot with Bombardier. In 2011 NetJets placed a firm order for 50 Global business jets, with options for an additional 70 Global aircraft. The firm order included 20 Global 7500 and Global 8000 jets. In 2012, the company also announced an order for 100 Challenger private jets, with options for an additional 175 aircraft. The firm order included 75 Challenger 350 and 25 Challenger 650 private jets.
A press release from Bombardier last October headlined, “NetJets Confirms Delivery Schedule for its Global 7500 Aircraft and Continues to Exercise Options within the Extensive Bombardier Portfolio.”
In 2014 Flexjet ordered 50 Gulfstream aircraft. The sale included firm orders and options for G450, G500 and G650 aircraft, and a long-term service support agreement. It was big news in business aviation. First, it showed under the company’s new owner, Kenn Ricci’s Directional Aviation, Flexjet was going push into the more large cabin, long-haul flying. It also marked a move away from Bombardier, the company that had previously owned Flexjet.
In announcing the Gulfstream deal five years ago, Ricci seemingly excluded any possibility NetJets may be the subject of the upcoming order. He said, “Flexjet is privileged to fill the void in the fractional market for new Gulfstream aircraft, becoming the sole and exclusive fractional provider of new Gulfstream aircraft.”
Since then, Flexjet has also introduced its Red Label program which features designer interiors and flight crews dedicated to a specific tail, the idea to provide a service closer to that of full ownership. Back in September the company said sales had increased 17% in the first half of the year while 42% of its owners were by then flying under Red Label.
Underscoring the need for more planes, Flexjet said at the time “The increased demand for long-range international missions is reflected in a more than 100% increase in Gulfstream G450 sales during the first half of 2018. All available hours in the new Gulfstream G650s delivered late in 2017 were sold by year-end.”
It further noted, “In order to meet demand, the G650 fleet will be increased to four by the end of 2018. Counting the G650s, a total of 19 new aircraft are to be delivered by the end of this year, including additional Embraer Phenom 300s and Legacy 450s and Bombardier Challenger 350s. Since 2015, Flexjet has taken delivery of 60 aircraft, resulting in the fractional private jet industry’s youngest fleet.”
Last December, Ricci told Aviation International News he would like to launch a large cabin program in Europe this year. According to ARGUS TRAQPak, Flexjet trailed NetJets in flight hours last year by a margin of 365,710 to 85,520. Flexjet declined to comment when we contacted them. We did talk to CJI and they told us, “We ran (our story) past Gulfstream before we sent it out, and they were happy for it to go without any changes.”
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