Manufacturers are jostling for position in the increasingly crowded mid-size market sector
Kate Sarsfield/LONDON
Business Aircraft customers are spoilt for choice. Gone are the days when selecting an aircraft was relatively simple, with models neatly categorised into light, medium and large sectors based on cabin size, range and, consequently, price.
Sustained economic prosperity coupled with long-term confidence in the business aircraft market has prompted manufacturers to seek and exploit new market niches to satisfy demand from an expanding and diversifying customer base. Subsequently, a plethora of new models in newly defined sectors from entry level to ultra- long-range have emerged to fill the gaps between traditional sectors.
The booming mid-size sector is a product of the manufacturers' enterprise. The traditional mid-size market - represented by the Bombardier Learjet 60, Raytheon Hawker 800XP, Galaxy Astra SPX and Dassault Falcon 50EX - is now bookended by two newly created sectors. On the one side, superlights such as the Learjet 45 and Citation Excel are designed, at around $8 million, to offer mid-size cabin comfort for a modest price hike over a light jet. On the other, the super mid-size class, - exemplified by the Falcon 2000, Galaxy Aerospace Galaxy and, arguably, Cessna's Citation X - offers the comfort of a large aircraft for slightly more money than a mid-size jet. The super mid-size class, priced from $14 million to $20 million, fits between mid-size aircraft at $11-13 million and large jets at $20-30 million.
Mid-size distinctions
All the major manufacturers are grappling for a piece of the mid-size market, anticipating hefty sales. In its latest business aviation market outlook, Honeywell forecasts deliveries of 1,550 aircraft in the medium and super mid-size categories between 2001 and 2011. This represents around 9% fewer deliveries in this class over the next decade, compared with Honeywell's previous forecast, as manufacturers work off large backlogs. The long-term prospects for the mid-size sector appear extremely lucrative, as manufacturers have discovered.
Following separate analyses of the market, Cessna, Bombardier and Raytheon drew differing conclusions: Bombardier and Raytheon selected the super mid-size sector while Cessna elected to take on traditional mid-size stalwarts. "No one has ever built an aircraft this big that will take you so far for so little money," says Brad Thress, programme manager for Cessna's mid-size Citation Sovereign, which is expected to sell for around $12.7 million.
Cessna's research reveals that, of almost 1,760 mid-size business jets in service, around 830 are early generation aircraft such as the Dassault Falcon 10, Israel Aircraft Industries Westwind and Rockwell Sabreliner. The balance is made up of Learjet 55/60s, Hawker 800s, Falcon 50s and its own 650-series Citations, production of which ceased last month with delivery of the 109th Citation VII.
Apart from the new wing and tail, the Sovereign is based on the "superlight" Citation Excel, with the fuselage stretched by 1.5m to give an overall length of 18.9m and an enlarged cabin which has "40% more volume than the Lear 60", says Thress.
After early delays, the Pratt & Whitney Canada PW306-powered Sovereign is scheduled for certification and first delivery in late 2003 and early 2004, respectively.
Priced under $15 million, Bombardier's Continental and Raytheon's Hawker Horizon are aimed at the less crowded super mid-size sector, exemplified by the $22 million Falcon 2000, $18 million Galaxy and $16 million Citation X. The new entrants each plan to carve a 30% share of the super mid-size market when they are introduced in 2003, threatening the market viability of their pricier counterparts.
Despite starting later, Bombardier will be first into service with its all-new Continental. Certification and first customer deliveries of the $14.25 million aircraft, the least expensive in the super mid-size category, are set for 2002 and early 2003, respectively. The Continental is billed by the Canadian company as "a transcontinental business jet offering US coast-to-coast capability in all conditions, with a full passenger load without sacrificing speed, at an incremental step up in price from today's mid size jets."
Market research
Before launching the Continental, Bombardier conducted more market research than with any previous product, and the goal was to capture 80% of all customer needs. "The Continental meets or exceeds the five top priorities identified by potential customers: a true US coast-to-coast range over 5,600km [3,000nm]; balanced field length under 1,520m [5,000ft]; price under $15 million; a true eight-passenger 1.85 x 2.18m cabin plus baggage space; and Mach 0.8 cruise speed," the company says.
Raytheon's $14.7 million Hawker Horizon, like the Continental, is an all-new design, but is unique in boasting a carbonfibre fuselage. This provides a cabin height of 1.8m and width of just under 2m. Because of delays, the aircraft is now scheduled for certification and first deliveries shortly after the Continental, in late 2003. It is a slightly higher performing machine, however, boasting a range of 3,100nm at M0.82 .
Competition in the mid-size sector is not coming just from traditional sources. Embraer, a newcomer to business aviation, has unveiled a $19 million corporate variant of its ERJ-135 regional airliner. The ECJ-135 Legacy offers a 40m³ (1,400ft³) cabin, "giving around two-thirds more interior space than other aircraft in its class", says the Brazilian manufacturer. The Legacy offers a maximum cruise speed of M0.78 and a range of about 1,730km (3,200nm) with eight passengers. Certification is set for 2002. Fairchild Dornier has offered a corporate version of its regional 328JET, the Envoy 3, for some time, but has yet to announce buyers.
Orders are pouring in for the new wave of mid-size aircraft, before they have even entered service. Fractional ownership programmes, wooed by the range and comfort of these aircraft, have fuelled their popularity. Not surprisingly, Executive Jet tops the table with 200 orders and options, in equal proportions, for the Horizon and Sovereign for its NetJets fractional ownership programmes. The New Jersey-based company already operates 24 Hawker 800XPs, 14 Falcon 2000s, 17 Citation VIIs and 33 Citation Xs.
Raytheon's Travel Air fractional scheme operates 21 800XPs and has a further 63 XPs and 27 Horizons on order. Bombardier's FlexJet programme, meanwhile, plans to take delivery of 80-90 Continentals over 10 years. FlexJet already accounts for 25% of Learjet 60 sales.
Embraer has received a $1 billion launch order for 25 Legacys from US fixed-base operator and charter company Swift Aviation.
Meanwhile, sales of current product lines remain buoyant. Cessna has around 60 orders for its Mach 0.98 Citation X and expects to deliver around 30 aircraft this year. Galaxy has chalked up 50 orders for its super mid-size jet and has raised production to two a month. The US/Israeli joint venture is also keen to enter the fractional arena and says it can support independent or established programmes, providing six to eight aircraft a year.
The traditional mid-size aircraft are also selling well. Production of the $12 million Galaxy Astra SPX remains steady at 12 aircraft a year. Raytheon boasts a "substantial backlog" for its 800XP. Bombardier recently ramped up Learjet 45 and 60 production and expects this year to deliver around 50 of each.
Price challenge
Dassault declines to break down sales figures, but expects to turn out around 100 Falcon 50EXs and 2000s over the next two years.
Richard Aboulafia, analyst with US forecast specialist Teal Group, believes the advent of competitively priced super mid-size aircraft places Dassault's high-priced product line in a vulnerable position, particularly the $17 million traditional mid-size Falcon 50EX. He notes, however: "Dassault stands a good chance if it introduces [as planned] a re-engined 2000 [dubbed the 2000EX]. This will enable it to [compete in the large aircraft category] by attacking the lower end of the [Bombardier] Challenger 604 market".
Manufacturers admit they constantly examine their product lines to stay ahead and retain their market share. Raytheon is close to choosing an avionics supplier to replace the Hawker 800XP's standard Honeywell SPZ-8000 system. The upgraded aircraft will be offered with either the Rockwell Collins ProLine 21, standard on the Premier I, or Honeywell's Primus Epic, selected for the Horizon, for a modest increase in price. Cessna, meanwhile, could increase the performance of its Citation X by using additional thrust available from its Rolls- Royce AE3007 turbofans.
Marc Bouliane, Bombardier's director of Learjet programmes, says: "Our product lines are constantly evolving and we are always looking at ways to improve the cost and value of our product lines". Despite the proliferation of new designs, he believes the market is large enough to support the growing line of models: "There are two distinct and healthy markets within the mid-size sector, as long as we continue to look ahead and listen to our customers this will remain unchanged."
Source: Flight International
