Sky’s the limit with boom in sales of large, luxury jets
SEATTLE – In early March, Boeing’s biggest jet, the 747-8 Intercontinental, took off from Paine Field near here, its gleaming white livery shrouded in secrecy.
But the newest version of the airliner, which can carry 460 passengers, was not destined for a commercial airline. This particular model, the 747-VIP, was headed for a private customer in the Middle East believed to be the emir of Qatar.
Airbus, too, is about to deliver its own behemoth jetliner — the A380 double-decker — to a single customer this year, the Saudi prince Alwaleed bin Talal, the chairman of Kingdom Holding Co., a major investor in Citigroup. Ordered in 2007, it will be the most expensive-ever personal jet, with a final price well in excess of $500 million, including the cost of outfitting it with one-of-a kind amenities. The original plans included a garage for two Rolls-royces, a stable for horses and camels, a pen for hawks and a prayer room that rotates so it always points toward Mecca.
It is the ultimate call sign of the super-rich: a big plane to flaunt their wealth while they conduct business above 40,000 feet.
Defying the economic slump, celebrities, corporate titans and Internet entrepreneurs in recent years have upgraded to bigger planes, with leather seats, plush bedrooms and opulent boardrooms. New billionaires in fast-growing countries like China, India, Russia and Nigeria are also seeking long-range planes that can serve hard-to-reach airports or provide direct service between farflung cities.
“They have to buy longer-range airplanes. If you’re flying from Mongolia to Nigeria, it’s either a three-day journey flying commercial or a nine-hour flight on your jet,” said Steve Varsano, an airplane broker who recently opened a retail store for corporate jets in London’s Hyde Park Corner.
The trend has helped the industry weather the downturn. From 2007 through 2011, sales in the largest jets — those weighing more than 50,000 pounds — have grown by 23 per cent to 200, registering just a small dip in 2009, according to the General Aviation Manufacturers Association. By contrast, shipments of the smallest planes have fallen 58 per cent to 106 in the same period.
“The people we deal with were not too much affected by the crisis,” said Habib Fekih, the president of Airbus Corporate Jets.
While the market has traditionally been dominated by U.S. buyers, today international customers account for more than half of jet sales.
Airbus, the European plane manufacturer, recently unveiled an interior concept for Asian buyers of the corporate version of its A320 called Phoenix. The design features red hues, Asian patterns and a large round table, “the focus of Asian family life,” according to an Airbus brochure.
“A lot of wealth is being created in the emerging markets, in places like India, and that’s what we are targeting,” said Rod Williams, vicepresident of marketing for Bombardier Business Aircraft.
Luxury comes at a cost. Prices range from about $31 million for a Bombardier Global 5000 to $65 million for the Gulfstream G650, which will be released this year. Airbus lists a price of $68 million for its smallest singleaisle A318 to about $245 million for the twin-aisle A350, which is under development.
In all, manufacturers sold 200 large jets in 2011, including 17 Boeing and Airbus private planes.
As planes have become bigger and fancier, their interiors have also changed greatly, incorporating the luxurious amenities once found only on private yachts. The owner of one Boeing private jet painted a copy of the Sistine Chapel on its ceiling, while one has a library aboard.
Still, there are limits to the features than can be installed in private jets, which are subject to stringent airworthiness standards.
“Not everything can fly,” says Walter Heerdt, senior vice-president for marketing and sales at Lufthansa Technik. “We will not install a swimming pool or a fireplace. That is not possible.”