Airbus continues corporate jet battle with Boeing
Airbus looks to the future with its ultra-long range and ultra-modern family of corporate jets after being out-delivered by Boeing – only for the second time – in 2012.
For the last two years, Airbus’ share of the business jet market has stood at just one percent, but when you are selling jets for around $50 million, you could argue that this is hardly the point.
Like Boeing Business Jets, Airbus builds only long-range, supersized corporate airliners – lavishly decorated and capable of carrying well in excess of 20 passengers in extreme comfort.
Airbus versus Boeing
While Boeing boasts that their BBJs are purpose-built business aircraft, Airbus, headquartered in Toulouse, France, says its family of Airbus Corporate Jets (ACJs) is the most modern family of corporate jets on the market.
“If you look at Boeing, they are still producing the aircraft they were building decades ago,” says David Velupillai, marketing and communications director for Airbus Corporate Jets. “They have tried to make improvements, but, under the skin, they are the same aircraft from the 1960s.”
This was not exactly something that Captain Stephen Taylor, president of Boeing Business Jets, sidestepped in a recent interview with Corporate Jet Investor (“If I am honest, the 737 that we sell today is pretty much the same aircraft that we were selling 16 years ago”) and is precisely why Boeing – who Velupillai consistently refers to as “brand B” throughout our interview – launched the BBJ Max at the end of 2012, which is said to offer an extra 14 per cent of range and a 13 per cent cut down in fuel consumption.
“Boeing may have been talking a lot about the BBJ Max, but the reality is that it will not be ready until something like 2017, which is a very long time away for customers in this market,” says Velupillai.
Deliveries down in 2012
Business jet deliveries were down across the board in 2012 and Airbus was no exception, delivering nine corporate jets, the company’s lowest since 2005. Although Boeing delivered 12 jets last year, this was the only the second time since 2005 that Airbus had been out-delivered by its competitor.
After Airbus builds a jet, the ‘green aircraft’ is then delivered to a cabin outfitter, where the customised interior is fitted and the exterior is painted. Airbus recommends using one of the eight centres which have been audited by the company, and although the customer may end up choosing a centre which is not affiliated with Airbus, Velupillai is keen to stress that the manufacturer still plays an active role in the completions process.
“We will sit down with the customer and will try to understand their needs and how many people they want to fly,” he says. “We will help them to produce a specification for the cabin, which the customer can then take to the outfitter.”
Vellupillai calculates that based on current lead times, Airbus could deliver an aircraft ordered at the time of speaking [April 2013] by the end of 2014. However, the customer must then wait a further 12-18 months before they can fly in the completed aircraft.
Camels, horses and Rolls Royce’s
The primary customers of Airbus Corporate Jets are billionaire private individuals, although the manufacturer also sells executive jets to governments – including Italy, Germany, Thailand, Brazil, France and Venezuela, amongst others – as well as companies that use the aircraft for VVIP charter, like Comlux, Twinjet and Vertis.
Airbus made headlines in the last few years with the sale of the first privately-owned double-decker A380 – the world’s biggest passenger airliner – to Prince Alwaleed Bin Talal Al Saud of Saudi Arabia, who reportedly paid over $500 million for the completed aircraft.
Although there were stories that the jet would include features an extravagant as a garage to hold two Rolls Royce’s and a stable for the Prince’s horses and camels, Vellupillai denies that this was ever the case.
“The private customer is really looking to take the space and lifestyle that they are used to on the ground into the air,” says Vellupillai. “They need a comfortable environment to relax and entertain and so on. The vast majority are not concerned with anything too exotic.”
The size of a house
Regardless of the degree of luxury chosen by the customer, even the smallest member of the Airbus Corporate Jet family, the ACJ18, still offers 80 square metres of floor space in the cabin, which as Vellupillai notes, is “pretty much the size of a house or an apartment.”
The sheer size of an ACJ and its ability to carry large numbers of passengers in varying standards of comfort has proved particularly popular amongst governments.
“One section of the aircraft can be used as an office by day and bedroom by night,” says Vellupillai. “Then you can have economy in the back and a separate business class section.”
“Governments can carry advisers, support staff, heads of companies, maybe even some media, and they do not have to go out and charter extra capacity,” he adds.
Although ACJs can carry more than 100 passengers when configured as airliners, Vellupillai says that most private customers opt for a 19 seat-configuration, making it possible to carry large families while avoiding some of the more stringent restrictions that come with chartering the aircraft for extra revenue.
Big in China
Predictably, Airbus sees China as a big priority at the moment, with Vellupillai noting the fact that the country remains the world’s highest GDP group as well as a relatively new market for business jets. The company proved its commitment to the region by displaying an ACJ318 corporate jet – operated by Comlux – at this year’s annual ABACE event in Shanghai.
A recent study published by the Asian Sky Group claimed that Airbus dominates the corporate airliner segment in Greater China with a 58 per cent market share.
Their study showed that there were a total of 18 ACJs in Greater China at the end of 2012 – six ACJ318s, 10 ACJ319s, one ACJ319 VIP and one ACJ330.
Despite Airbus’ strong presence in China, Vellupillai says that the Middle-East is traditionally the manufacturer’s best-performing region for aircraft.
“Russia was quiet for a while, but we have seen more activity there lately,” he adds.