Gulfstream Confirms New Business Jets
October 14, 2014
Gulfstream Aerospace Corp. confirmed plans for a pair of new business jets dubbed the G500 and G600, adding to an already crowded field of competitors trying to capitalize on a nascent resurgence in the demand for large private planes.
The unit of General Dynamics Corp. GD +2.56% on Tuesday rolled out its first completed G500 test aircraft at its Savannah, Ga., factory. Underscoring how far along the project came during years of secret development by Gulfstream, the test aircraft taxied in under its own power. It carried twin PW800 engines made by Pratt & Whitney Canada, a unit of United Technologies Corp. UTX +2.32% , confirming an earlier report in The Wall Street Journal.
The $43.5 million G500 is slated to fly in 2015 and enter service in 2018. The $54.5 million G600 is to follow in 2019. Both jets boast large cabins that can carry up to 19 passengers on shorter trips, or fly transcontinental flights with eight passengers.
The G500 will be capable of flying 5,000 nautical miles at long-range cruise speed, which could connect London to Los Angeles or Hong Kong. It can fly as fast as 90% the speed of sound, in which case its range is reduced to 3,800 nautical miles, because faster flying is less fuel efficient. The larger G600 will be able to fly 6,200 nautical miles at long-range cruise speed, or 4,800 nautical miles at high-speed cruise.
The business-jet market has only recently begun to rebound from the global recession, with deliveries bottoming out in 2012 after halving from 2008 levels. And Gulfstream faces heavy competition. Dassault last year unveiled plans for the all-new Falcon 5X, which is due in 2017 and will compete directly with Gulfstream’s new models. Bombardier Inc. BBD.B.T +1.13% recently refreshed a pair of its biggest jets and is planning two larger versions called the Global 7000, due in 2016, and 8000, due in 2017, to best Gulfstream’s largest, longest-range offerings, the G650, which it first delivered in 2012 and the G650ER, which delivers in 2015.
The new Gulfstream jets eventually will replace its G450, which lists at around $35 million, and its G550 aircraft, priced in the low-to-mid $50 million range. Gulfstream says it plans to build both until demand dries up.
Gulfstream, which unveiled the new jets a week ahead of the annual National Business Aviation Association convention in Orlando, Fla., is aiming them not only at corporations and wealthy individuals but at companies that operate fleets of business jets.
Gulfstream said its first customers for the planes include fractional business-jet operator Flexjet LLC, which said it would order as many as 50 Gulfstream aircraft. That includes firm orders for six G500s,10 2 G450s and six G650s, worth an estimated $1 billion at list prices, Flexjet Chairman Kenn Ricci said in an interview.
Flexjet’s purchase marks a major expansion with larger jets to serve overseas destinations. The company has previously only purchased jets that cost as much as around $25 million, said Mr. Ricci, whose Directional Aviation Capital LLC, acquired Flexjet from Gulfstream rival Bombardier in 2013.
“This is a big bet,” said Mr. Ricci, “We wouldn’t have done this without a significant backlog of our own customers that would be titling those planes. We have a significant amount of deposits.”
Gulfstream also said its new customers include Qatar Airways’ private aircraft operations arm, which signed a memorandum of understanding to order as many as 20 jets, including the G500 and G650.