Strong Global Express Sales Result in 24 Month Order Backlog

March 29th, 2007

The Wall Street Journal reports today that thanks to strong demand for luxury aircraft, Bombardier now has a two year order backlog for their Global Express line.

Bombardier received 274 orders for business jets in fiscal 2007 which ended Jan. 31. That was 55 more than in fiscal 2006, and made up the lion’s share of the total order book of 363 aircraft. It had 117 orders for business jets in the latest quarter, compared with 71 a year earlier…Bombardier’s total order backlog stood at $40.7 billion as of Jan. 31, up $9.1 billion from a year ago.

It Can Hold 853 Passengers, but Why Should You Share?

March 27th, 2007

This NY Times article by JOE SHARKEY points to the practical limits at the top of the big business jet food chain- a private-use application of Airbus’ much maligned A380. The “cruise ship” analogy is very appropriate. If one much have unquestionably the biggest VIP jet possible, then the A380 is your ride. There is no question that the A380 will win the ramp envy contest, hands down, game over. 

Runner-up in the size arena is the Boeing 747-8 Intercontinenal. As Mr. Sharkey points out, twenty-plus members of the 747 family fly the private and head-of-state skies. It’s hard to imagine a mission where a 747-8 could not reasonably do everything an A380 could provide, but with better economics. Of course when the owner is an individual and not a government, personal desires can and do outweigh decisions based purely on logistics, aquisition and operation costs.

A broader market however exists than the article may lead the reader to believe for the next tier down: an oppulent, yet (relatively) more practical Boeing 787 private jet. As big as a BBJ or ACJ is -even considering the largest family member, the 737-900ER-based BBJ3- there is a case to be made for a truely world conquering VIP. Properly configured, a VIP Dreamliner can non-stop its owner anywhere on Earth. That capability, along with true widebody size can appeal to any mission analyst regardless of the size of their ego. I hope you enjoy The New York Times article. 

It Can Hold 853 Passengers, but Why Should You Share?

By JOE SHARKEY

I’M not sure that we need any more, but here are two new examples that define “over the top” in air travel: The superjumbo A380, all 10,000 square feet of it, as a personal or business jet. And a private airport terminal just for first-class and top elite-status passengers.

Last week, I flew on a double-deck Airbus A380, operated jointly by Airbus and Lufthansa, making a demonstration overseas trip, its first with a full passenger load, from Frankfurt to New York. There were about 500 people on board, but the huge A380 is actually certified to carry as many as 853 passengers and another two dozen crew members, in all-coach configurations.

On the other hand, it can be used to carry a lot fewer people. Airbus, which has 156 commercial orders for the plane, says it also has one letter of intent from a very rich, anonymous individual who wants a private A380 as soon as one becomes available. The airplane is about two years behind schedule for delivery to its existing customers and the first one won’t go into regular service until late this year. More private orders are expected.

Not long ago, I wrote an article about how some very rich people were unable to make do with standard corporate aircraft, even top-of-the-line Boeing business jets or Airbus corporate jets, which cost as much as $60 million fully outfitted. So they’ve been converting big airliners like 767s, 777s and even 747s into private planes.

Naturally, the A380 is now at the top of the must-have list, said Aage Dünhaupt, a spokesman for Lufthansa Technik, a Lufthansa subsidiary that specializes in the maintenance and overhaul of airliners.

We talked in a lounge on the upper deck of the A380 en route to New York from Germany. The A380 was on a trip intended to put in-flight services and systems through a dress rehearsal and to show off the plane in the United States.

Who in the world would buy an A380 for private or business use? Well, they are already in big planes. “At the moment, there are about 20 individuals who are privately flying 747s,” Mr. Dünhaupt said. Lufthansa Technik converted 12 of those 747s to private use.

An A380 costs about $310 million, without basics like seats and bulkheads. Figure on another $100 million for those necessities amid a true luxury interior, he said.

“I’m not expecting that a Fortune 500 company will be standing up and saying, now we need an A380,” he acknowledged. “It is hard to explain how to use it for business purposes, that’s for sure.”

Of course, some people don’t have to explain anything. Lufthansa Technik is among the aircraft-conversion specialists now actively marketing the A380 as a personal and/or business jet to that market, which is chiefly in the Middle East, he said.

A slick brochure describes the A380 V.I.P. as “simply the ultimate aircraft” for private travel. The floor plans look like that of a cruise ship, with a lounge the size of a hotel lobby and a master bedroom that looks like a five-star hotel suite.

“When you look at our interior design, you will also see very large conference areas that can hold 20 to 30 people,” Mr. Dünhaupt said. “So if you have to travel with 50 people all the time, and have meetings in the air, maybe then it makes sense as a business aircraft.”

The sky may be the limit, but physics and aerodynamics do still apply. “It’s not possible to have a big Jacuzzi or a swimming pool on board even if you can afford this,” he said.

Private bathrooms with showers, by the way, are already standard in most big business and personal aircraft, known as V.I.P. aircraft, which start with the Boeing business jet and Airbus corporate jet. Lufthansa Technik has outfitted more than 60 V.I.P. aircraft, he said, adding: “From our experience, 95 percent have a shower.”

For those who are not flying private but still want to avoid the rest of us in the airport, there’s another option. At Frankfurt Airport, Lufthansa has an elegant private terminal for first-class passengers and members of its Hon Circle top-status frequent-flier program, which requires flying 600,000 miles every two years.

It has a restaurant, a cigar lounge, private bathrooms with showers and tubs, and a bar “with 84 different whiskeys,” said Gudrun Opper, a Lufthansa employee who showed reporters around the place.

Drop your rental car at the door. You check bags, clear customs and even board right from the private terminal, where a fleet of limousines waits to whisk you directly to the plane.

A car drives you across the apron right up to the plane, where a valet escorts you up the stairs and aboard.

“You don’t even see the airport,” said Ms. Opper, really getting my attention with that prospect.

E-mail: jsharkey@nytimes.com

Business Jet Range Calculator: See What Planes Can Fly Between Any Two Major Cities

March 22nd, 2007

Global Business Jet Magazine’s Web site has a handy calculator for seeing what planes can fly where nonstop. All you have to do is choose the starting and destination cities and the utility will calculate the distance, and what aircraft have the range to make that specific flight. Below are some big business jets and their ranges as provided by the site (sorted by distance:)

Gulfstream G-VSP (6490 Nautical Miles)
Gulfstream G-550 (6490 Nautical Miles)
Gulfstream G-V (6250 Nautical Miles)
Boeing BBJ (6171 Nautical Miles)
Airbus ACJ (6100 Nautical Miles)
Bombardier Global Express XRS (6055 Nautical Miles)
Bombardier Global Express (6055 Nautical Miles)
Dassault 7X (6000 Nautical Miles)
Boeing BBJ2 (5673 Nautical Miles)
Gulfstream G-500 (5620 Nautical Miles)
Bombardier Global 5000 (4724 Nautical Miles)
Dassault Falcon 900EX (4240 Nautical Miles)

New Web Site for Making FBO Arrangements

March 22nd, 2007

World Aircraft Sales Magazine reports that FBOops.com is a new site that enables pilots and flight departments to make FBO reservations.

Unlike traditional FBO arrangements that only work for a certain brand FBO, this system allows for all FBOs to have online reservation. Easy to use, this website offers saved profiles that include aircraft type, tail number, fuel credit card number, hotel, rental car, and contact information, in order to expedite the reservation process. The website also helps limit mistakes by providing useful information, for both pilots and FBOs, by using a status system for each reservation made.

Billionaires Consider Purchasing Superjumbo Jets

March 19th, 2007

The USA Today article (linked below) gives some tidbits on the growing trend of widebody VIP aircraft. Yes, “headroom” is important!

While few dozen or so 747s and other widebody airliners have plied the skies as VIP jets for years, Boeing and Airbus are experiencing more sales of new jumbos destined for private use than ever before. This is an exciting trend for the completion industry where a widebody project could bring the work (and revenue) of three or four BBJs or ACJs in one shot. Boeing has announced sales of four 747-8s and at least five 787s, with certainly more to come. Stories of VIP A380 sales have surfaced too, but I have not seen confirmation of specifics. The trend is certainly up for both new aircraft sales and conversions of used jumbo airliners.

They also mention the Boeing 767, which has grown in popularity as a widebody VIP platform as its market economics have made it an attractive used aircraft purchase. Introduced to airline service in 1982, older members of the fleet are now reaching retirement age. Since private-use typically puts only about 10% of “airline” wear and tear on an aircraft, used airliners that may only have a few years of commercial “life” left in them can easily soldier on for a decade or more as a productive VIP transport.

Billionaires consider purchasing superjumbo jets
Some billionaires are considering buying large jets made by Boeing and Airbus. Observers say the potential to customize the planes’ interior makes the large aircraft attractive, and they note that the lack of headroom available on smaller planes concerns many owners. USA TODAY/Forbes

User fees now “likely” — a “storm is upon us”

March 13th, 2007

According to Aviation Week, Congress has moved forward on a bill that authorizes the FAA to “modernize” the air traffic control system, and would impose new taxes on corporate and private aircraft. Phil Boyer, president of AOPA writes that “The storm is upon us.” Boyer says:

Like an imbedded thunderstorm, the proposal attempts to mislead pilots by primarily targeting the airlines and other commercial aviation users; however, anytime you as a general aviation pilot flew into Class B airspace you would be subject to a user fee. The amounts of these fees are not specified, but the FAA administrator has virtually given carte blanche to establish and raise the fees. But it gets worse, much worse — grapefruit-size hail pummels us in the form of a tax increase of more than 50 cents per gallon on avgas!

Boeing talks with airlines about new 737

March 12th, 2007

As expected for many months, news is starting to trickle out about the future replacement of the venerable Boeing 737 series. While this is many years away, the replacement aircraft will most certainly include the next generation business jet varients. 787 Dreamliner technology will be well understood in the completion industry by the time this short- and medium-haul airliner series hits the ramp.

Boeing talks with airlines about new 737
Boeing has begun talks with airlines about a revamped version of its 737, according to reports. The new jet, likely to enter service in the middle of the next decade, would include a wider, twin-aisle jet and a shorter, single-aisle version. The plane will also feature a carbon fiber fuselage to make it more fuel efficient and environmentally friendly. Forbes/AFX News Limited (3/12) 

Plan to Charter the Jet You Own? The Write-Offs May Not Be There

March 6th, 2007

In the article Did The FAA Raise Your Taxes? in the March issue of World Aircraft Sales Magazine, Keith G. Swirsky & Troy A. Rolf describe how revisions to Op Spec A008 have made it very difficult to take advantage of aircraft depreciation and operating expenses to offset income from other sources.

This is true because the provision of an aircraft by the owner to the charter company is basically a lease; which the IRS may deem to be a rental activity with respect to the owner…The problem of classifying use of the owner’s aircraft for third-party charter as a rental activity is that, in general, rental activities are “passive activities.” Tax losses (i.e. depreciation) generated from passive activities may only be used to shelter passive income. Most of our clients (and everyone else reading this article) have very little, or no passive income. Passive income is commonly earned from rental real estate activities where the taxpayer does not materially participate. Absent passive income, the tax depreciation from the aircraft will be worthless, as it will not shelter any taxable income.

Key to this is that if the charter operator you partner with is using your pilots (on your payroll,) then the operator has ” relinquished operational control of the flight.”

Swirksy and Rolf continue:

The NBAA has been working to persuade the FAA to rescind that portion of the guidance materials that indicate that a Part 135 charter operator may be considered to have relinquished operational control of the flight if the pilots receive compensation for the flight from the aircraft owner. If the NBAA is successful, the door to the “extraordinary personal services” exception may again be open, at least by a crack.

Looks like the author’s firm, Galland, Kharasch, Greenberg, Fellman & Swirsky is available to assist in aviation tax law issues…


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