““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 ”
Embraer's Legacy 600
Morphing a commuter jet into a bizliner is no easy task, but Embraer has succeeded with the Legacy 600. The aircraft is based on the wildly successful and rugged EMB 135, a 37-seat commuter jet. When introduced in 2002, the Legacy offered a simple value proposition: a capacious cabin on par with that of a Gulfstream GV–and for half the price. Today, used Legacies are an even bigger bargain.
The Legacy can haul 10 passengers and lots of luggage 3,043 nautical miles at Mach .78, or roughly 500 mph. That's about half the range of the Gulfstream and about 50 mph slower. Embraer marketed the airplane as an alternative to super-midsize jets such as the Gulfstream G200, the Dassault Falcon Jet 2000EX and the Bombardier Challenger 300, models that when new fall into the $20 million to $24 million price range. However, you can buy a used Legacy that's less than 10 years old for as little as $12 million, about what you'd pay for a comparable vintage Cessna Citation Sovereign or a Challenger 300. The Legacy was announced in 1999 and deliveries began three years later.
"People will say, 'Well, it is not a Gulfstream.' It hasn't got the same range or headroom, but it is that much cheaper," said Patrick Margetson-Rushmore, chief executive of London Executive Aviation, a company that operates five 600s and two newer longer-range 650 variants. "For Europe, it covers what we need to do. You get a lot more for the money."
Compared with the super-midsize crowd, the Legacy's cabin is 60 percent larger, measuring 1,410 cubic feet. It is 43 feet long, 6 feet high on later models (5 feet 10 inches on earlier ones) and 6 feet 11 inches wide with seating for 13, although 10 is more reasonable.
The typical executive cabin features a forward galley and closet; four large executive seats arranged in a facing group sharing two foldout tables; four slightly smaller seats with a conference table and an opposite-facing credenza; and an aft stateroom area with two more large single seats, a foldout table and an opposite-facing divan or couch. The divan is available with a berthing top that slides out to create a comfortable sleeping surface. The six large executive seats have 20-inch-wide seat cushions and 26-inch-wide backs. They recline to 75 degrees, track forward and aft and swivel.
The Legacy's 240-cubic-foot baggage compartment can hold 1,000 pounds and can be accessed in flight through the roomy 92-cubic-foot lavatory. The lavatory contains a generous wardrobe closet, ideal for in-flight clothes changing.
Overall, the aircraft is 86 feet 5 inches long and 22 feet 2 inches high; the wingspan is almost 69 feet. If you want to keep this airplane stored under roof with any kind of space for automobiles and aircraft tugs, you'll need a 10,000-square-foot hangar and, depending on where you base, those can be hard to come by. Fueling the Legacy will also take some time and resources. Full fuel amounts to 2,680 gallons.
Payload with full fuel is an impressive 5,291 pounds (passengers and luggage at sea level). But if you want to take advantage of this capability, you should have at least 6,000 feet of runway (more runway and less payload in the mountains where the air is thinner). Fully loaded at takeoff, the Legacy tips the scales at 49,604 pounds. Although slightly slower than the Gulfstream G200, it can fly nonstop from New York to London or Singapore to Tokyo.
In 2005 the 600's maximum service ceiling was raised from 39,000 to 41,000 feet, improving range and allowing the Legacy to travel above typical airline routes. The maximum landing elevation was increased to 9,500 feet, facilitating trips such as Teterboro, N.J., to Telluride, Colo. Shorter landing distances were approved, down to 2,685 feet. Thanks to the advanced Honeywell Primus 1000 avionics system, the Legacy is a true go-anywhere, all-weather airplane. Recent upgrades to the system include better weather radar reception, heads-up display and an enhanced vision system that facilitates better foul-weather landing capability. Embraer is offering an upgrade to the new Primus Elite system that offers even more capability.
When Legacies began arriving in the U.S. in 2002, they were plagued by interior fit and finish and cabin noise problems and a series of airworthiness directives that covered everything from the passenger seats' floor tracking to inadequate drainage of leaking fuel. Most of these issues have been resolved; however, Margetson-Rushmore cautioned against early serial numbers, noting that more recent aircraft have the extra two inches of headroom because of the addition of a dropped center aisle and "are materially quieter due to additional soundproofing."
The cabin noise problems were not entirely unexpected. The Legacy's Rolls-Royce engines were tweaked to provide more power–for a total of up to 7,987 pounds of thrust each–than those used on the airliner versions of the aircraft and the Legacy is typically flown higher and faster than its commuter cousins. On early models, passengers reported noisy forward cabins. In 2003 Embraer began a campaign to improve and quiet the cabin, using isolators to absorb vibration from wall and ceiling panels, partitions and furniture, including galleys, cabinets, credenzas and the lavatory. Other incremental improvements began to take hold as well.
"Embraer got an understanding of people's expectations," said Margetson-Rushmore. "They've also improved the quality of the leather, the final finish and the woodwork. They've pretty much ironed out every issue."
One issue Embraer got right from the start was dispatch reliability and customer support. "The aircraft is always flying and our dispatch rate is 98 to 99 percent," said Margetson-Rushmore. "We've had really good luck with product support. The aftercare service, from an operator's perspective, is very good."
Embraer claims the overall dispatch reliability for the fleet tops 99 percent.
While most corporate jets are designed to operate 400 hours a year, Embraer designed the ERJ series for 2,500 hours per year and at least one operator, fractional-share provider Flight Options, has flown its Legacies as much as 100 to 130 hours per month.
The Legacy's airliner lineage also typically means more time between maintenance inspections (the first isn't due until 4,000 hours or 48 months); more parts that can be replaced when they actually wear out as opposed to on a fixed timetable; and somewhat better prices for parts. Even though the airplane is made in Brazil, about 70 percent of its parts–including the engines and avionics–come from the U.S. There are 10 authorized Legacy service centers in the U.S. and 10 more across South America, Europe, Asia and Australia.