Jet-set pass up gold fittings in favour of aviation sector’s equivalent to beige
Members of the elite private jet set are customising their planes with full-sized showers, beds and windows – but when it comes to decorating, an increasing number are steering clear of gold panels and gaudy features, opting instead for the airborne equivalent of beige.
The reason, industry executives said at a convention in Las Vegas last week, is fear of getting stuck with a highly personalised aircraft that will not fetch a good price in today’s competitive market for used business jets.
To win sales, plane makers like Brazil’s Embraer offer interchangeable seats and arm rests to make the planes easier to resell, but still have original design options for their elite clients with names like Sky Ranch and Kyoto Airship, says Reuters.
“If you make it Moulin-Rouge on the interior it’s going to be a [multimillion-dollar] refurb in the aftermarket, so that’s a problem,” says Jay Beever, an Embraer vice president for interior designs, referring to the historic Paris cabaret.
Last year The National reported that the owner of a 10-year-old Bombardier Global 5000, originally offered at US$17.5 million, which had been cut to $14.5m, had been recommended by the broker selling the plane to reduce the price further as the market for large-cabin business jets kept weakening. A new Global 5000 lists for $50.4m.
The slump extends even to the Gulfstream G650 – just two-anda-half ago years ago an aircraft so coveted by well-heeled buyers that some would pay $10m above list for a used jet rather than wait four years for a new model.
One 2013 plane that was first posted for sale in June 2015 at $68m had its asking price reduced twice, to $58.8m.
“There’s absolutely no evidence of a recovery on the horizon,” says Janine Iannarelli, founder of the Houston aircraft brokerage Par Avion.
The low prices of used aircraft have limited demand for new jets, forecasters say. Deliveries of new planes are expected to stay flat until 2019, even though profits on the S&P 500 have grown at a double-digit rate over the past two quarters, according to Reuters.
“We see that customers are going towards a more simplified aesthetic when specifying their business jets because they are becoming savvy with respect to the residual or resale value of their aircraft,” says Anna Cristofaro, a spokeswoman for Bombardier business aircraft.
Financiers have a strong preference for generic aircraft without highly configured interiors or garish colour schemes because they are easier to resell in the case of default, says Paul Sykes, the director of FlyFunder, an online site dedicated to aircraft finance.
Ken Hill, the chief executive of Business Aircraft Sales in California, which repossesses aircraft for banks, recalled how he once seized an all-black Cessna plane for a client that had to be repainted for about $65,000 before it could be sold.
While the market has taken a conservative turn, private jet company executives say there remains an elite cadre of wealthy customers who want it all – queen-sized beds, showers and, in one case, a holographic projection system.
Bedrooms are popular on Bombardier’s long-range Global 7000 jet, which lists for almost $73m and is sold out until 2021.
Embraer offers versions of its Lineage aircraft that integrate wood and brass nautical accents for yacht lovers, and a Japanese-themed plane with a sushi table.
The separate bedroom on an Embraer Lineage 1000, a business jet converted from an Embraer E190 regional jetliner that lists for $53m, is an attraction for female chief executives who want to sleep apart from male co-workers, says Mr Beever.
“There are certain individuals who don’t care because they just want what they want,” he says.
“So the challenge is to come up with ways to personalise and customise [those jets] so they get what they want, but maybe make it easier to refurb later.”