Airbus Industrie has joined the business jet market, announcing at Le Bourget that, like Boeing, it too has launched a corporate jet. This announcement poses interesting questions for the traditional business jet manufacturers - starting with how this new competition will affect their sales. Focus falls particularly on Bombardier and Gulfstream, whose new top-of-the-line products, the Global Express and GV, appear most exposed by the news that they must now compete with the major airline manufacturers. On Sunday, just one day after Boeing revealed it has secured orders for 20 of its new Boeing Business Jet (BBJ), Airbus launched the A319CJ corporate jet. Airbus managing director Jean Pierson says the aircraft will be based on the A319 airframe and will be available from early 1999. It will accommodate between eight and 50 passengers. Development costs will be around $30million and a price tag is expected to be revealed tomorrow. Airbus predicts it will sell around 12 aircraft a year; Boeing believes its production rate could be as high as two a month from 1999.Reaction from business jet manufacturers exhibiting at the show is largely stiff upper-lipped, with many of them insisting that the entry of such high-profile manufacturers into the field will only expand the overall market. Bob Brown, Bombardier's president, says the Boeing move proves that the market for the ultra long-range corporate aircraft is a legitimate one. "We don't expect this to make a great deal of difference to us. There were always organisations who would buy an airliner for conversion. What we have done is different," he says. Questions There are questions about field length, spare parts and service that will also have to be addressed. "There is a big difference between dealing with people who are geared up to deal with corporate customers and those who are used to dealing with, or are owned by airlines." But Brian Barents, president and chief executive officer at Galaxy and former head of Learjet, believes the presence of the majors should not be under-estimated. "I think they will be a formidable competitor," he says. "Boeing has entered the market by virtue of the pricing structure of the GV and the Global Express. I think, if anything, Gulfstream will see erosion of their order books. "Another observer at the show agrees that the GV is the most vulnerable of the two ultra-long-range business jets because its cabin will now seem small relative to the BBJ, which is based on the 737 airframe, and the A319CJ. "Cabin size has become such an important issue in the executive jet world," he says. The Global Express, meanwhile, has a more spacious cabin and a speed advantage. Yet Bombardier has invested many millions of dollars in the Global Express programme, believing it was essentially entering a one-competitor market. Another exhibitor points out that the marketplace must change dramatically as a result of the Airbus and Boeing presence. "It certainly makes everything more interesting - you have four competitors out there instead of two," he says. Gulfstream plans a press conference in its chalet this morning at which its senior management team can address this and other issues. "We just feel that this validates our leadership over the past four decades in this particular sector," says a spokesman.
Source: Flight Daily News
