Ed Dahlberg got 40 calls in one day when he put a Gulfstream G650 up for sale in February. That’s unusual for a private jet – especially when the asking price tops the $64.5 million on the sticker.
We believe this plane’s going to bring north of $75 million, said Dahlberg, president Emerald Aviation and part-owner of the G650.
Barely 15 months after its debut, the world’s biggest and fastest business jet is a corporate status symbol, with owners as high-profile as Exxon Mobil, Wal-Mart Stores and Qualcomm. The waiting list is almost four years long for a factory-fresh model, whetting appetites among tycoons and chief executive officers when a used G650 hits the market.
It’s the must-have airplane if you’re in the top end of the spectrum, said Steve Varsano, founder of Jet Business, who’s sold two pre-owned G650s since November for more than $70 million each to buyers he wouldn’t identify.
G650s are also must-haves for Gulfstream parent General Dynamics, the tank and submarine maker squeezed by shrinking U.S. defense budgets. The jets helped boost 2013 aerospace revenue 17 percent to $8.12 billion, while combat systems unit revenue fell 23 percent to $6.12 billion.
The G650 is doing exceptionally well, said Peter Arment, a Sterne, Agee & Leach analyst. The demand for this plane is going to remain very strong.
Large, luxury aircraft are the bright spot in a $21 billion private-jet market recovering unevenly from the 2008-09 financial crisis. While orders remain weak for small, personal models such as the Mustang from Textron Inc.’s Cessna, corporate fleet managers and billionaires are shopping again for big planes able to make transoceanic routes.
Qualcomm’s G650 flew round trip between California and Barcelona before February’s Mobile World Congress in the Spanish city, where then-CEO Paul Jacobs collected an industry award. That jaunt, as chronicled by airline-data tracker FlightAware, was well within the jet’s advertised range of 7,000 nautical miles, enough to reach Beijing from New York without refueling.
Propelled by Rolls-Royce engines tucked on either side of the rear of the fuselage, the G650 can reach 627 miles an hour at 30,000 feet (9,100 meters), about 93 percent of the speed of sound. It seats as many as 18 people. To ease jet lag, the cabin air pressure is kept higher than on typical airplanes.
On a recent flight from Phoenix on a G650 owned by Honeywell International, takeoff thrust pressed passengers into soft leather seats as the engines whispered.
Wood-veneer tables popped out at the touch of a button. Entertainment options included watching satellite television from a seat-belted sofa or gazing out the windows – billed as the largest on a business jet and fitted with powered shades – at the red sandstone cliffs of Sedona, Ariz.
It’s just unbelievably capable and unbelievably reliable, Honeywell pilot Andy Eldringhoff said as he guided the plane above the Arizona desert at 16,500 feet.
CEO Dave Cote is among the users of the jet, which has Honeywell avionics in the cockpit.
With more than 50 delivered so far, the G650 has reset the market for business aircraft designed for maximum speed, comfort and distance. There won’t be a competitor in the G650’s class until 2016, when Bombardier Inc.’s Global 7000 is due for its initial handover.
Gulfstream enhances the aura of exclusivity by refusing to let buyers leapfrog by swapping or buying delivery slots, as occurs with commercial jets. The Savannah, Ga., company wrote a clause that strictly prohibits contract holders from selling their spots, said Steve Cass, a spokesman.
There is no cutting in line, Cass said. Everyone that we deal with is pretty important folks. Once you go down that, it’s a pretty slippery slope. You just don’t want to go there.
Gulfstream started taking G650 orders in March 2008 – six months before the Lehman Brothers Holdings bankruptcy triggered a global credit freeze – and customers stampeded to put down about $3 million and sign purchase contracts, said Jet Business’s Varsano.
While Cass said the G650 order book held up during the economic crisis, flight trials were marred by a 2011 crash in New Mexico that killed four Gulfstream employees. U.S. safety officials concluded in 2012 that company pressure to speed up testing caused the accident. Gulfstream President Larry Flynn responded that any failings by the planemaker were inadvertent.
The G650 may become Gulfstream’s most profitable aircraft ever, General Dynamics CEO Phebe Novakovic told investors on Feb. 20 at a Barclays Plc conference. The jet uses 50 percent fewer parts than the smaller G550 and G450 and is assembled at a plant designed for the G650, according to Gulfstream.
We don’t know internally how good we can get, but we know we can get a whole lot better, Novakovic said of the plane’s profitability.
General Dynamics, of Falls Church, Va., soared 54 percent to $108.92 in the 12 months ended Monday, topping the 19 percent gain for the Standard & Poor’s 500 Index. Montreal-based Bombardier rose 2 percent in the same period.
Buyers’ silence about the G650 contrasts with the demand. Corporate touchiness about jet ownership only intensified after U.S. automaker CEOs drew criticism for flying company aircraft to Washington in 2008 to beg Congress for an industry bailout.
Brooke Buchanan, a Wal-Mart spokeswoman, confirmed that the Bentonville, Ark., retailer has a G650 while declining to discuss details.
Emily Kilpatrick, a spokeswoman for Qualcomm of San Diego, and Scott Silvestri, a spokesman for Exxon of Irving, Texas, declined to commentwhen asked about their registered G650s.