1. Learjet, a Work in Progress

    July 22, 2012 by admin

    By William Garvey
    Source: Business & Commercial Aviation

    Much attention and commentary regarding Bombardier’s aviation interests have focused on the Canadian company’s most ambitious projects, namely its CSeries jetliner and Global 7000 and 8000 ultra-long-range business jets. For good reasons.

    The 100- to 149-seat CSeries is the largest aircraft ever produced by Bombardier and represents a gamble that’s consuming $3.5 billion of development dollars. It is also the first Bombardier aircraft to threaten the near total market control of Boeing and Airbus.

    Thus it was no surprise when Pierre Beaudoin, president and CEO of Bombardier Inc., focused almost entirely on the CSeries during a Wings Club luncheon speech in New York early this year. “The comfortable days of duopolies in commercial and regional aircraft are over,” he said.

    “Some may believe that re-engined aircraft with a 20-year-old design will be good enough,” he continued, taking a sideswipe at the heavy selling A320neo and Boeing 737 MAX. “We believe that ‘good enough’ is not what operators expect or need.”

    Two weeks after Beaudoin’s speech, NetJets announced a firm order for 50 Global 5000, 6000, 7000 and 8000 business jets, with options for another 70. Should all options be exercised, the total retail price would exceed $6.7 billion. It touted the sale as “the largest aircraft purchase agreement in the history of private aviation.”

    The first of the ultra-Globals, the 7000, is to enter service in 2016. The development of those top-of-the-line models, along with the Global Vision Flight Deck and the CSeries, consume a good chunk of the $1 billion to $1.5 billion Bombardier Aerospace President and CEO Guy Hachey says his company has been investing annually in R&D.

    With two such high-profile and high-cost programs under way involving high-ticket airplanes, an OEM could be expected to ease up elsewhere, particularly if involved in the light jet business, a market segment that crashed four years ago and remains depressingly down. However, Bombardier has chosen quite another course and actually appears to be investing more in Learjet than at any time since it acquired the line from its bankrupt owner in 1990.

    The company is now at work on three Learjet models. There’s the Model 85, launched in 2007 and at 66 ft. long with a double-club cabin, the largest aircraft to bear the Lear marque. And, announced at the European Business Aviation Convention and Exhibition (EBACE) in May, the Model 70 and 75. While the latter two are upgrades of the current 40XR and 45XR, the 85 is an all-new design with all-composite construction, a first for Bombardier.

    Compared to the models they will succeed, the six-passenger Model 70 and eight-passenger Model 75 will feature more thrust, improved takeoff performance, faster climb-to-cruise, better fuel efficiency and lower operating costs. They will be powered by 3,850-lb.-thrust Honeywell TFE731-40BR turbofans, have Bombardier’s signature Vision cockpit layout with three-screen Garmin G5000 avionics and sport canted winglets. The two are priced at $11.1 million and $13.5 million, respectively.
    With its stand-up, 6 ft., 1 in.-wide cabin, the Model 85 is not only the largest Lear ever, its Mach 0.82 high-speed cruise and 3,000-nm range will make it the fastest and longest-legged one as well. Powered by Pratt & Whitney Canada PW307B turbofans rated at 6,100 lb. thrust, and featuring a three-screen Vision cockpit with Rockwell Collins Pro Line Fusion avionics, the aircraft lists for $19.66 million.

    While Bombardier doesn’t disclose its investment in any particular aircraft development program, the amount of money needed to bring the Model 85 to life is obviously formidable. First, there was the construction of a 185,000-sq.-ft. production facility in Querétaro, Mexico, plus equipping it with composite tooling, where about 85% of the aircraft will be manufactured.

    Then there’s the rejuvenation and expansion of Learjet’s home at Wichita’s Mid-Continent Airport where the aircraft will be flight tested, assembled, completed, painted and delivered. Bombardier’s investment in Wichita goes well beyond accommodating the Model 85 and includes expanding the company’s flight test center, establishing an engineering and information technology hub, and building a new paint facility and customer delivery facilities.

    All totaled, the new jet and the facilities expansion, the largest in Learjet’s history, represents an investment of more than $600 million, including grants and financial incentives from the state, county and federal governments. In 2010, Kansas offered $27 million in bond financing to help secure Bombardier’s commitment to the Wichita site and the 450 new jobs it represents; this past January, the state approved another $16 million in bonds for the project.

    Considering that Learjet has been particularly hard hit by the light jet recession — it delivered just 46, 28 and 43 airplanes in 2009, 2010 and 2011, respectively — that still shows little signs of improvement, Bombardier’s investment in the division is notable.

    “It’s been a long, long time since Learjet has seen this level of transformation and excitement,” said Ralph Acs, vice president and general manager. “The market is tough,” he acknowledged, “but that doesn’t mean you don’t invest. We prefer to be bold” by investing in new models, infrastructure and personnel. “We feel good about that,” he said.

    — William Garvey

  2. Forecasts Point to Continued, Gradual Business Aviation Growth

    by admin

    Even amidst a slowing global economy and a financial crisis in the European Union, most forecasters remain optimistic, predicting a gradual, but sustained period of business aviation market growth lasting well into the next decade.

    For example, in June, Bombardier Aerospace issued its annual 20-year forecast for the industry. While the company expects business jet deliveries in 2012 to equal last year’s numbers, it predicts that a sustained period of growth will begin in 2013, with roughly 24,000 business jet deliveries, valued at $648 billion, expected from 2012 to 2031.

    Bombardier said most of that growth will occur in North America, where new business jet deliveries will reach about 9,500 units, followed by Europe with 3,920 deliveries. Bombardier predicts that China will become the third-largest business aviation market, with aircraft deliveries expected to total about 2,420 units in the 2012-2031 period.

    Bombardier joins a number of other companies that over the last six months have forecast growth for business aviation starting this year. Among them is Teal Group, which is holding true to its most recent forecast issued in April. The firm looks for a decade of growth to begin in the second half of 2012, according to Richard Aboulafia, Teal’s vice president of analysis.

    Teal forecasts deliveries of 10,249 traditional business jets worth $249.5 billion; 568 corporate aircraft and regional jets valued at a combined total of $42.3 billion and 3,062 business turboprops between 2012-2021. It predicts the industry will grow by 6 percent this year and 8 percent next year, followed by four years of much stronger 12-percent annual growth starting in 2014.

    Meanwhile, business aviation market analyst Brian Foley, of Brian Foley Associates, is more sanguine about the industry’s prospects in 2012 and long term.

    “There’s a lot of impatience, and understandably so, for things to have measurably improved by now,” said Foley. “However, the industry seems to be forgetting that historically the business cycle has averaged five years up and five years down. Normally, we’d still have another year to go before expecting the next up-cycle.”

    Nonetheless, there are signs that the business aviation market improved through the first quarter of 2012 and into the second. In June, Cincinnati-based ARGUS International Inc. reported that the aircraft charter market posted its first increase in activity in more than a year in May 2012 as flight activity increased 3.5 percent overall from April 2012. Looking at the various categories, Part 135 charter activity rose by 5.3 percent in May, while Part 91 activity rose by 3.9 percent. The Part 91K segment posted a 1-percent decline, according to the company’s ARGUS TRAQPak report. Year-over-year, overall business aircraft activity was up by 1.9 percent.

    Also in June, the business aviation market research firm JetNet said inventories of available pre-owned business jets fell to 13.6 percent of the total market in April, a 0.7 percent decline from the 14.3 percent market of April 2011. Business jet transactions also increased by 4.1 percent in the first four months of 2012, while prices were generally flat, posting a negligible 0.1 percent increase.

    The for-sale inventory of turboprops declined 1.3 percent from a year earlier to 9.2 percent, while turboprop sales rose by 3.1 percent in April.