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Billionaires Still Buying


Jan 22, 2009



 

A solid sector of the aviation aftermarket not slipping is buoyed by money, and lots of it. Narrowbody and widebody VIP/VVIP aircraft completions seem to be sheltered from the economic turbulence, sheltered because of the owners and operators of these large luxury jets.

As David Velupillai, product marketing director of executive and private aviation for Airbus, said, "We believe that if you can afford to spend $62 million (current list price for the A318 Elite) or more on an aircraft, then you are probably a billionaire, or well on the way to becoming one. And if you are a billionaire, then you are likely to go on buying. Manufacturers of smaller business jets, which sell for less money, and to millionaires rather than billionaires, are more likely to be affected," by the global economic downturn.

In fact, business is so brisk there's a bit of a bottleneck for widebody completions. Velupillai recommends booking a cabin outfitting slot at the time of ordering your VIP aircraft--like now, for 2012.

Lufthansa Technik Chairman August Wilhelm Henningsen said at the NBAA convention in October that he's seeing an increased demand for completions and modifications, and that LHT is taking slot reservations for 2012-18. Walter Heerdt, head of marketing and sales for Lufthansa Technik, confirmed Dec. 15 that timeslot is still current and said LHT hasn't had any narrowbody or widebody completion cancellations. However, depending on how long the global economic slump lasts, narrowbody cancellations could be possible, he predicted.

Some Boeing aircraft completion slots are shifting because of the company's strike in 2008, which delayed aircraft production. A Boeing spokeswoman said the company had one cancellation, a VIP 747-8 aircraft.

Heerdt said Lufthansa Technik has accommodated the slips and thinks LHT might see its first VIP 787-8 aircraft in 2013 or 2014, "but it could be earlier" if Boeing gets the program back on track.

LHT plans to receive its first Boeing 747-8 VIP aircraft the end of 2011, said Heerdt, who revealed the company has three firm commitments "and maybe one to two more soon."

In 2008, LHT delivered seven narrowbodies (at least two started in 2007), and Heerdt expects the same number this year. It completed two widebodies in 2008, and in 2009, he expects to finish one, as well as to deliver two VIP Airbus A330 conversion kits and start three other widebodies (a 747-400, an A330 and an A340).

Jet Aviation will be designing and configuring the first two VIP Airbus A350-900 XWB aircraft. Hong Kong-based Jet Management's A350s should arrive at Jet Aviation's Basel facilities in 2014 and 2015, and each aircraft is scheduled to be finished in 18 months.

HRH Prince Alwaleed of Saudi Arabia has not yet chosen the completion center for his Airbus A380 Prestige, the first VIP version of the aircraft, according to Velupillai.

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