Archive For The “Gulfstream” Category

Gulfstream at NBAA 2017

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Premium #308: Looking Ahead to 2017

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As we approach the end of the year, it is time to look ahead to the new year, and what we will likely see next year.  Our fearless forecast follows:

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The market implications driven by the BBJ MAX7

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Boeing Business Jets unveiled its BBJ MAX7 as the newest addition to its BBJ fleet. The BBJ MAX7 will have a range of up to 7,000NM. This should allow connecting key city pairs between Asia, the Middle East and the United States.  The BBJ MAX7 is longer than the 737NG-based BBJ.  Because of its more fuel-efficient LEAP-1B engines, the BBJ MAX7 will have reduced fuel burn and requires less cargo volume for auxiliary fuel tanks.

Boeing says the BBJ MAX 7 inherits the features of the BBJ MAX 8 and BBJ MAX 9, such an updated flight deck, improved aerodynamics, reduced noise profile, and fly-by-wire spoilers.  Despite being larger and more capable than the current BBJ, the new MAX7 should have the lowest operating costs of any BBJ. Boeing says it has  seen strong interest in the BBJ MAX 7.

The table lists the total 737-based BBJs delivered to date. Boeing has 11 orders for the BBJ MAX 8s and one BBJ MAX 9.  By comparison, Airbus has delivered 67 A319-ACJs and has two A319neo ACJs on order. Airbus has 130 ACJs based on all A320 family models. It is a tiny, rarefied, market. At the 2016 Airbus Innovation Days we asked about the the A319neo – it was getting very little mention at the event.  Airbus’ EVP for sales and marketing, Kiran Rao, responded there would be an A319neo because it is needed as the platform for the ACJ. And now the BBJ MAX7 forces Airbus hand.

Given the small size of this market one has to wonder about its prospects.  Gulfstream offers its G650ER and Bombardier will be offering its Global 7000 soon. There are also rumors about a CSeries derived personal business jet.  Embraer has its Lineage 1000.  At the pinnacle of the large cabin business jet market, is there room for all these aircraft?  The answer is yes, for two reasons.  First, the incremental costs for developing these aircraft are low, and margins are high, as these aircraft typically aren’t discounted from list prices like airliners.  So while the niche is small, it is profitable.

One might argue the G650ER and Global 7000 are not comparable to the commercially derived personal aircraft.  Maybe – but they are priced at nearly the same level and offer the longer range and higher speeds.  But they lack the cabin footprint of an airliner, which enables a larger private bedroom, bath, shower, and the ability to transport a substantial staff along with the CEO or head of state.

BBJs are frequently utilized as head of state aircraft for countries that cannot afford, or do not require, a 747 or an A380.  With many global corporations now have larger budgets than some national budgets, business executives are taking on the mantle of pseudo heads of state, and require similar aircraft capabilities.

One of the benefits the new BBJ obtains from a slightly larger MAX7 is its cabin footprint, which is larger than the earlier MAX7 designs that had two fewer seat rows in commercial models.  That extra space provides just enough differentiation against the A319neo to give Boeing a floor space advantage, which its cabin designers quickly filled with new amenities.  Because most customers of these jets customize interior completions, with completion centers obtaining STCs for new monuments or amenities, most of these aircraft are delivered “green”, with interiors and custom paint the responsibility of the end customer.

While airliners converted to business jets represent a small market niche, it is a very profitable one.  The new BBJ based on the MAX7, slightly larger than its popular predecessor, looks to be the right size for this market.

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Premium #302 – Time to break the hockey-stick

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Gulfstream at NBAA

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Denel moves ahead on SARA

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Denel is a South African state-owned aerospace and defense technology firm that is developing a small African regional aircraft (SARA).  The idea is to offer a 24-seat twin turboprop that will enable small outlying communities to connect with larger cities, and thereby connect with the global economy.

We had an opportunity to see the mock-up during a visit with Denel two weeks ago at their campus next to Johannesburg’s Oliver Tambo Airport.

Denel has an interesting history – starting with developing aircraft for pre-democracy South Africa, building the Aermacchi MB-326.   A review of Denel’s history shows a remarkable commonality with Embraer’s history.  During the sanctions era, Denel had to develop knowledge in helicopters (Alouette & Super Puma) which led to creation of Africa’s first indigenous attack helicopter, the Rooivalk (Red Falcon).  Denel also developed the Cheetah (picture), a highly modified Dassault Mirage 3 that brought the Mirage airframe to close to F-16 performance.  The Cheetah program is a source of great pride, and when the SANDF took delivery of Gripens, some Cheetahs were sold to Ecuador. Denel also develops missiles and artillery systems.

With the political change, Denel focused on commercial aviation even as it kept busy doing military projects, working on the SAAB Gripen for example.  Denel Aerostructures managed to win work on the Gulfstream G150.  Subsequently Denel picked up work building parts for the Airbus A400M.  This effort has been so successful that at the 2015 Airbus Innovation Days, Denel was identified as one of Airbus’ best contractors.  We understand that Denel did an excellent job of reducing weight on the A400M (as all vendors were asked to do), and ending up shaving more weight of their parts than other vendors.   In 2011, Denel assembled 25 A109 helicopters for the SANDF.  In 2012, Denel was awarded work and is the only outside source for building parts (winglet) for HondaJet.  Far from the public eye, Denel developed technologies and IP not to be found anywhere else in Africa.

With this background it is no surprise Denel started to think about doing a commercial program of its own.  Hence SARA, launched two years ago.  Denel assembled a rough full-sized model of what SARA will look like.  They made the model from marine plywood and fiberglass and confirmed seating and cargo capacity.   The South African government has described the SARA program as “a national flagship project”.

Denel determined a need for a modern, point-to-point regional airliner on low-density routes, seating 15 to 24 passengers. SARA has four-abreast seating with a pressurized cabin.  It will have a maximum take-off weight of 19,000 pounds and a range of 1,400NM. Three different configurations are considered: full passenger (maximum of 24 passengers), combi (12 seats and one LD2 container) and full cargo (three LD2 containers). The key challenge is to develop an aircraft that will use short airfields that are currently not served by scheduled flights.  So SARA must handle dirt runways.

Denel is currently seeking partners for the project as it may be too ambitious to undertake alone.  The company hired Lufthansa Consulting to undertake a review of the SARA program, and the results show the aircraft has potential in many markets beyond Africa.  SARA is an ambitious project, but Denel has the background to pull it off.  With the right partners and appropriate state support, we might see SARA flying in 36 months.

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