An interview with the company’s President, Larry Flynn
When someone is considering a very big ticket purchase, and business jets are nothing if not big ticket, they tend to pay particular attention to the brand strength of the supplier. This is doubly true when the overall global economy is jittery and economic growth is uncertain. These conditions are tailor made for Gulfstream to outperform most, if not all, of its competitors and they go a long way to explain why the company is currently enjoying the lion’s share of such new orders as there are in the mid-size market, and why it has had the confidence to make massive investments in its production and assembly capabilities since the global financial crash of 2008.
In what could have been a catastrophic act of bad timing had the company’s resolve faltered, Gulfstream had announced its flagship 7000 nautical mile range, ultra-large cabin G650 to the world on 13 March 2008, committing itself to a massive investment and manufacturing programme. Six months later, on 15 September, Lehman Brothers collapsed and plunged global markets into a recession to rival the Great Depression of the 1930s – not exactly an auspicious environment for business jet sales. Nevertheless, Gulfstream followed up the March announcement with a second launch announcement on 5 October, this time of the G250, later renamed the G280, which it said would have the largest cabin, the longest range and the fastest speed in the super mid-sized class. In this, Gulfstream declared its confidence that the global economy would recover and put the crash behind it
As Flynn says, management decided to stick to its guns and to the seven-year US$400 million Long-Range Facilities Master Plan that it had announced in 2006, at a time when the business aviation market was booming. That plan included the creation of a new 624,588 square foot service centre, an independent fuel farm and a state of the art paint hanger, plus a new sales and design centre at its manufacturing and service facilities in Savannah. The plan envisaged the creation of 1,100 new jobs for these facilities, plus a new Research and Development Centre (RDC) to accommodate some 750 technical and engineering staff.
“All of this was related to the G650. We went ahead with it despite sales falling away in 2009 plus in November 2010 we announced a further US$500 million expansion with a plan to add 1,000 jobs. In fact we have already added more than 1,700 since then as part of another expansion and upgrade to our Savannah facilities,” Flynn says. The group also took the decision to expand Gulfstream’s own service centre footprint globally, adding service centres in Sao Paulo, and doubling capacity in Westfield Massachusetts. Capacity at Savannah more than doubled as part of the 2006 initiative.
So far, so good, and the results have more than justified Gulfstream’s faith in the ability of the business aviation market to ride out this long dull patch in the economic cycle. Gulfstream’s parent company, General Dynamics, does not declare Gulfstream’s revenue separately, bundling it in as part and parcel of the aerospace group in the General Dynamics Report and Accounts. However, in 2012 the aerospace group achieved around US$7 billion in sales, while the revenue for General Dynamics as a whole came in at US$31.5 billion. “Operating earnings were up some 32% year on year and sales revenues were up around 19%, so we have been doing well. Moreover, throughout the period since the crash we have consistently held the number one rating spot in product support, something we are very proud of,” Flynn adds.
By mid-September 2013 Gulfstream had delivered 13 G280s and customer feedback has been fantastic, Flynn says. Gulfstream deliberately designed the interior of the G280 to be very similar to that of the G650, giving owners and passengers the same look and feel, and much the same width and height as they would get on the longer range, larger jet. “What is great about the G280 is that it is much more than a coast-to-coast of the USA airplane. When we designed the G280 we targeted a range of 3,400 nautical miles and in fact the range the plane delivers is 3,600 plus, which means you can fly all year round direct from London to the east coast of the USA. We flew from Paris to New York in seven hours and 40 minutes and we’ve set a whole bunch of city pair records with this airplane, with some 30 records already verified and more pending,” he comments. Both the G280 and the G650 were certified in 2012, with 29 G650s delivered so far. According to Flynn, the order backlog has now reached the point where someone signing a contract today can expect delivery in July 2017! Importantly, Flynn emphasises that Gulfstream does not sell to brokers, but only to bona fide end purchasers, be they operators, corporates or high net worth individuals, and there is no queue jumping and hence nothing by way of speculative premiums accruing on the purchase price.
“Both airplanes have proved to be very reliable and this is the smoothest entry into service that we have had as a company. The G650 is proving particularly popular in the current market which favours the ultra-long range jets. It has a 6,000 nautical mile range at Mach .90 and a 7,000 nautical mile range at Mach .85 which brings a huge number of city pairs into the equation for operators and owners,” he comments.
One of the G280’s selling points is its very good short runway performance. “The wing design on the G280 looks much like the wing on the G550, and our balanced field length performance is significantly better than on the G200, for example,” Flynn notes. As is now becoming standard, passengers can operate the G280 cabin management system and in-flight entertainment via their iPhones or tablets. The avionics on the G280 is from Rockwell Collins, which also provides the avionics on the G150, while Honeywell provides the avionics for the G650 and most of the rest of the Gulfstream portfolio. Flynn says that Gulfstream has an excellent relationship with both providers and has worked very closely with both Rockwell Collins and Honeywell to develop additional software for the avionics. One of the benefits of this, he points out, is that the computer logic is very similar on all Gulfstream aircraft, with the avionics from both suppliers being own-branded by Gulfstream as its Planeview system. The interiors are all in-house with no option for a new buyer to take a green aircraft and have it outfitted by a completions house of their own choosing. Customisation is slight, since Gulfstream offers many options as part of its standard package. This standardisation, which embraces customisation, enables Gulfstream to deliver on time, on budget and to the highest quality possible, Flynn says. Standardising the options also helps to maximise quality control throughout the aircraft.
The G650 is proving particularly popular in the current market which favours the ultra-long range jets
Interestingly, Gulfstream announced as far back as November 2005 that it was doing research into sonic boom suppression. At the time it built a mobile audio booth to demonstrate its ‘whisper’ technology to legislators, scientists and environmentalists, and toured the country. The basic idea behind the whisper technology is a telescopic spike, giving a supersonic jet an elongated nose which prevents the wave build up that creates the sonic boom on the ground. Instead all a person would hear as the jet flew overhead at Mach 1.8, or a bit better than twice the speed of sub-sonic business jets, would be a ‘whisper’. The roadshow was doubtless an early effort by Gulfstream to see what kind of resistance it would face, assuming it went ahead and built a supersonic jet, in getting the FAA to reverse its ban on all commercial supersonic overhead flights over the continental US – a ban that was put in place 30 years ago in response to Concorde’s teeth-rattling ‘double boom’ when it flew overhead at supersonic speeds. Having recently interviewed Doug Nichols, the CEO of Aerion, the major player in the supersonic space, EVA asked Flynn if Gulfstream had considered partnering with Aerion, which is known to be looking for a major OEM partner. “We know the management of Aerion very well, but we are very inward looking on this supersonic project. There is a great deal of work still to do and we wouldn’t be interested in producing a supersonic jet unless we could fly it over both land and water. So there are regulatory as well as technical hurdles to be overcome,” Flynn answered. “In my view supersonic is still a number of years off,” he added.