““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 ”
Even when economic times were good, regional airliners reconfigured for executive/VIP use were a bargain, offering a large-cabin equivalent of a Bombardier Global XRS or a Gulfstream G550 at a fifth of the cost.
Today, with many of the world's economies in recession or at least struggling, more than a dozen companies are involved in the acquisition and conversion of regional jets to an executive/VIP role. And there's no shortage of customers.
The 328Jet, originally built by Dornier of Germany to carry 32 passengers on short regional routes, is among the most popular candidates. Wessling, Germany-based 328 Support Services delivered one converted 328Jet in 2008 and a second one in early 2009 and expects to deliver another three before the end of the year.
Jordan Jaffe of ComTran International in San Antonio describes its "Revolution Series" 328Jet conversions as "bulletproof." They come with a one-year warranty on the airframe, avionics and interior and a pre-paid "power-by-the-hour" program for the engines. A finished price of about $12 million covers aircraft acquisition, a full maintenance modification, a full executive/VIP interior, fresh exterior paint and the addition of a long-range auxiliary fuel system that extends the jet's range to nearly 2,100 nautical miles.
The cabin of a recently converted 328Jet included a full-size galley with coat closet, three DVD players, satellite radio, Aircell access to broadband connectivity, iPod docks and 10-inch monitors at every seat and two 20-inch bulkhead-mounted LCD monitors. The aircraft also boasted 227 cubic feet of baggage space with a weight capacity of 1,650 pounds.
If cabin size is what counts, consider the executive/VIP conversion of the BAe 146 and Avro RJ that offer double the volume of a large-cabin business jet, such as the Gulfstream G550. BAE Systems in the UK is offering the reconfigured, four-jet aircraft, with extended-range fuel tanks, at about $10 million. An Avro RJ70 converted for BAE Systems by MAC Interior Specialists in the UK brought "new meaning to the term 'bespoke,'" according to BAE vice president of marketing and analysis Robert Morris.
The converted aircraft features side-facing divans to enhance the view of the central, 42-inch LCD monitor, an extended lavatory aft with Villeroy & Boch fixtures, an in-flight entertainment system from Denmark's Bang & Olufsen and a surround-sound package from Tenencia-all in a cabin that is nearly 60 feet long and more than nine feet wide and features 6 feet 9 inches of headroom.
Perhaps the most popular of the "regional redos" is the Canadair CRJ200, which has essentially the same size cabin as Bombardier's Global Express XRS. The Global Express does offer a range of more than 6,000 nautical miles, compared with just over 3,000 (with auxiliary fuel tanks) for the reconfigured regional airliner.
On the other hand, for less than $20 million, you have what Mike Capuccitti, president of Project Phoenix of Dubai, described as an equivalent cabin for a lot less than the $50 million price tag of the XRS. Project Phoenix sold its first Phoenix CRJ to a client in the Macau Special Administrative Region of the People's Republic of China. He claimed that being able to fly nonstop 6,000 miles is "somewhat overrated," explaining that the fleet average per mission for the Global Express is only about two and a half to three hours. "This suggests that the real need is for a large cabin, not 12- to 14-hour nonstop range," he said.
Another advantage of a regional airliner reconfiguration is the short lead time required to buy one. While a new equivalent business jet slot may not be available for years, the wait for a converted regional airliner is typically less than a year, and the conversion cycle time can be as little as six months.
Companies involved in the acquisition, maintenance conversion, interior reconfiguration and sale of converted regional airliners told Business Jet Traveler they expect to deliver more than 20 airplanes this year.