““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 ”
The Major Airplane Manufacturers at a Glance
Business aircraft manufacturing has evolved into a truly global industry, generating more than $150 billion in economic output each year and supporting tens of thousands of jobs. Here are the key facts about each of the major aircraft manufacturers, including data on their parent companies, their 2008 and 2009 business aircraft sales figures and the models they offer.
Airbus entered the bizliner market in 1997 with the Airbus Corporate Jet (ACJ), a then $35 million executive version of its A319 airliner. Early on, ACJ sales lagged those of the Boeing Business Jet, which had been introduced to the market the year prior. More recently, ACJ sales have eclipsed Boeing's on an annual basis. Encouraged by orders from the Middle East and Asia-Pacific regions, Airbus has added the longer-fuselage A320 Prestige and a shorter variant, the A318 Elite, to its executive lineup. For VVIP, government and other customers requiring the ultimate in space and long-distance capability, Airbus also offers executive versions of its A330, A340, A350 and A380 widebody jetliners.
Boeing Business Jets
A partnership between Boeing and General Electric (maker of the CFM-56 series of engines for newer-generation 737s) spawned the BBJ, which in 1996 combined components of two 737 models, the 737-700 series airframe and the larger 737-800 series wing, landing gear and center fuselage section. As many as 10 auxiliary fuel tanks can be installed in the belly of the airplane, giving the BBJ an unrefueled range of 6,196 nautical miles with eight passengers. A larger, stretched version called the BBJ2 boasts 25 percent more cabin capacity, but at the price of slightly reduced range. In 2005, Boeing announced the even larger BBJ3, based on the 737-900ER.
Bombardier started out as a snowmobile manufacturer in 1942 and has grown into one of the world's largest producers of business jets and regional airliners. Over the years, the company has expanded its aircraft business mainly through acquisitions, buying brands such as Canadair, DeHavilland, Learjet and Shorts. In the last 15 years the Montreal-based company has introduced several business jet models, including the Learjet 40 and 45, Challenger 300 and 605 and Global 5000 and Express XRS. The forthcoming Learjet 85 will be the first all-composite business jet.
Cessna is arguably the best known brand in all of aviation. The Wichita company built its first airplane in 1927 and has rolled out more than 190,000 in the eight decades since. Of the roughly 16,000 business jets in operation worldwide, Cessna has produced a third of them. The company's nine business jet models span the Mustang very light jet and continue up the spectrum to the world's fastest business jet, the Mach 0.92 Citation X. Cessna halted development of a large-cabin model known as the Citation Columbus soon after the financial crisis began.
Dassault was already renowned for its Mirage fighter jets when it introduced the Falcon 20 business twinjet in the U.S. in 1963. Today Dassault Industries, EADS and a group of private investors own Dassault Aviation, of which Dassault Falcon Jet is its marketing and support subsidiary in the U.S. The company builds airframes at its factory in southwest France. Aircraft destined for U.S. buyers are then flown to Dassault's Little Rock, Ark. maintenance and completion center to receive avionics, paint and interiors. Dassault offers the Falcon 900 and 2000 family of business jets, as well as the Falcon 7X trijet, featuring the latest in fly-by-wire flight control technology and fighter-jet-style sidesticks in the cockpit.
Embraer has been building airplanes for more than 30 years, but it wasn't until 1994 when the Brazilian government privatized the company that the business took off. Today, Embraer is the world's fourth-largest commercial aircraft manufacturer. Its ERJ 135/145 airframe served as the foundation for the company's first business jet, the Legacy 600, which was introduced in 1999. In the past decade Embraer has laid the foundation for a strong push into the business jet market by developing the Phenom 100 and 300 small-cabin jets, the Legacy 450 and 500 midsize jets and the Lineage 1000 bizliner.
Large-cabin Gulfstreams are instantly recognizable for their big oval windows and bullet noses. Today, Gulfstream's line of business jets also includes the midsize G150 and super-midsize G200, built in Israel by partner IAI. Gulfstream is currently developing the G250, which will be an updated and improved G200, and the G650. The flagship G650 will have a larger and wider cabin than the G550, the Savannah, Ga. manufacturer's current top model, and be able to fly 7,000 nautical miles unrefueled. The G650 will have a maximum operating speed of Mach 0.925, making it the world's fastest civil airplane.
Hawker Beechcraft combines two of aviation's most storied names. In 1937, Walter Beech introduced the Model 18, arguably the first cabin-class twin-engine business airplane. In 1964, Beech introduced the twin-turboprop King Air, which remains in production to this day. Raytheon bought Beech in 1980 and added the UK's Hawker brand to the fold. It sold the company in 2007 to an investment group led by Goldman Sachs. Hawker Beechcraft pioneered the use of composites in business aircraft construction, including in the current Premier 1A and Hawker 4000 business jets.
Piaggio Aero Industries
The sleek, pusher-turboprop Piaggio Avanti was developed in response to the energy crisis of the 1970s. Italian airframe maker Piaggio teamed with Learjet on a design that eventually became the P.180 Avanti. Learjet, then awash in financial difficulties, dropped out of the program, but Piaggio soldiered on, delivering the first Avanti in 1990. In 2005, the aircraft was updated with the Rockwell Collins Pro Line 21 avionics system, given slightly more powerful Pratt & Whitney engines and branded the Avanti II. Piaggio has confirmed development of a business jet but has revealed few details about the product so far.
Pilatus Business Aircraft
Nestled among the Alps in Stans, Switzerland, Pilatus has been building airplanes since 1939. Today it is the world's largest manufacturer of single-engine turboprops. The company's top-selling model, the PC-12, was certified in 1994 and became an instant hit with buyers, who appreciated its ruggedness, spacious cabin and unmatched performance. Today, more than 1,000 PC-12s are in service. The newest version, the PC-12NG, features a more powerful Pratt & Whitney Canada engine and modern Honeywell Primus Apex avionics.