““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Airbus Corporate Jet
Airbus followed Boeing into the prepackaged "bizliner" market in 1997. That's when it announced the Airbus Corporate Jet (ACJ), a then $35 million executive version of its A319 airliner. At first, ACJ sales were sluggish, while Boeing initially did well with its 737 airliner variant. Today, Boeing has sold more than 100 of its Boeing Business Jets (BBJs). But in recent years, the ACJ has sold well, too, with more than 80 ordered, 20 of them last year alone.
Most of these sales have been to customers in the Middle East and the Asia-Pacific regions, but in 2006, Airbus established a beachhead in Miami to market the ACJ more aggressively in North America. It also added a second U.S. authorized completion center-Gore Design in San Antonio, Texas-to finish the aircraft's custom interiors. Airbus had previously designated Landmark Aviation's Associated Air Center in Dallas as an authorized service and completion center. (In Europe, the interiors are completed by Airbus; Jet Aviation in Basel, Switzerland; and Lufthansa Technik in Hamburg, Germany.)
Still, despite all the renewed emphasis on North America, there are only three ACJ operators in the U.S., and only one of them-an aircraft charter and management company called ADI-has any significant experience with the airplane. The Pontiac, Mich.-based outfit uses the airplane primarily for corporate and sports team charters. Its 2001 ACJ has accumulated approximately 5,000 hours of flight time.
The A319 ACJ is one of four aircraft in Airbus' A320 family. (The others are the A318, A320 and A321.) Worldwide, there are more than 2,600 A320 family aircraft flying, mostly for the airlines. Some 800 are based in the United States with airlines that include Frontier, Jet Blue, Northwest, United and US Airways. Airbus claims that more than 25,000 pilots are qualified to fly the airplane and that the fleet has accumulated 40 million flight hours and enjoys a dispatch rate of 99.6 percent.
The airframer has designated four worldwide service centers for the ACJ: Basel; Dallas; Doha, Qatar; and São Paulo, Brazil. The company also supports the jet through its global airliner network of technical, training and parts centers in China, France, Germany, Singapore and the U.S. and 140 field offices worldwide. So if a problem does pop up on a trip, help isn't far off.
"Airbus support is readily at hand no matter where we travel in the world," said Brad Bruce, ADI's director of business development.
That isn't to say that every place that services an airliner can handle an Airbus. Its fly-by-wire (FBW) systems and digital architecture are substantially different from what you'll find on the Boeing or older out-of-production aircraft from British Aerospace, McDonnell Douglas or other companies. FBW replaces certain mechanical systems, coupling electronic flight controls with digital computers.
Pilots make control inputs through the sidesticks, other cockpit controls or autopilot. Those inputs are then calibrated and transmitted to a series of servos that power the aircraft's control systems and surfaces and make it turn, climb or descend.
FBW first emerged on French Mirage and American F-16 fighters during the late 1960s. Through subsequent decades of commercial adaptation, it has proven to be a precise, reliable and robust method of flight control. Dassault Falcon Jet incorporated it into its new Falcon 7X long-range business jet.
Other aspects of ACJ maintenance bear mentioning. Most business jets require that certain parts and major assemblies be inspected and/or replaced at fixed intervals, which are usually defined in terms of flight hours, flight cycles (one takeoff and one landing) or time (months or years). With airliners, more of these parts do not have to be replaced unless they are actually worn or wearing out. This type of maintenance is called "on condition" and a fair amount of it can be done on the ACJ. The ACJ also allows operators to use a highly "progressive" maintenance schedule, according to ADI's Bruce. "It enables us to do a fair amount of maintenance on nights and weekends without having to take the airplane out of service for big blocks of time," he said.
Bruce considers this kind of flexibility essential because most ACJ operators don't have a comparable backup airplane. "It allows us to use it for scheduled shuttle operations," he explained.
Maintenance aside, most customers buy the ACJ because of its cabin size, and it is there that the airplane unquestionably delivers.
The A319 ACJ fuselage measures 111 feet long, or six inches longer than a BBJ. The passenger compartment is 78 feet long and up to 12 feet 1 inch wide and offers 7 feet 4 inches of headroom. By way of comparison, the cabin on a Gulfstream G550 is 50 feet 1 inch long and on a Bombardier Global Express it measures 48 feet 4 inches. The ACJ cabin is nearly twice as wide as those of a Gulfstream G450 or a Falcon 900EX. However, all of those airplanes are slightly faster than the ACJ, which typically cruises at 460 knots.
The ACJ's impressive cabin dimensions translate into 850 square feet of floor space and 5,900 cubic feet of volume-more than ample space for any designer to run amok. Showers, master suites, media rooms with humongous plasma screens, gourmet galleys-if you can think of it, it probably will fit. (I haven't seen a bowling alley in one of these yet, but I'm sure that day is coming.) For the A319 ACJ, $55 million buys you the basic airframe and a no-frills 18-seat cabin. Anything more comes down to a question of how long you want to wait for it and how much you want to spend.
Typically, ACJ cabins are outfitted to seat 18 to 50 passengers. The baggage hold is cavernous and accessible through two giant belly doors that swing open and up. A built-in airstair allows the aircraft to be used even at airports that lack appropriate ground-handling equipment. Optional auxiliary belly tanks can increase full fuel capacity from 6,300 to 10,740 gallons, allowing the ACJ to carry 18 passengers 6,100 nautical miles without refueling.
At a maximum takeoff weight (mtow) of 166,447 pounds, however, the airplane does have runway and ramp limitations. Balanced field length (at mtow) is 6,750 feet and stopping at maximum landing weight consumes 3,950 feet. Ramps must be hearty enough to support this heft and girth (most are).
Like BBJ owners, buyers of the ACJ will find that the unwelcome mat has been laid out at a handful of general aviation airports, including those at Sun Valley, Idaho, and Teterboro, N.J. However, politics aside, under most conditions ACJs can use the same airports that host Gulfstreams, Globals and even some smaller craft.
And Gulfstreams and Globals are the next market that Airbus may chase with the ACJ. In 2005, the company announced a smaller version, the $45 million A318 Elite, which will seat 14 to 18 passengers and have a range of 3,800 nautical miles (4,100 with one auxiliary tank). On the other end of the spectrum, a larger ACJ, the $65 million A320 Prestige, can be configured to seat 18 to 80 passengers and offers up to 1,100 square feet of cabin floor space.
Airbus' myriad product choices and new North American focus may mean more ACJs will be coming to the market soon. For now, though, most sales are still A319-based ACJs and Bruce thinks the demand will only grow. "We frequently get calls from people trying to buy or sublet the airplane from us," he said.