BBJ Sales Reach 46, Boosted by Executive Jet Order for Nine

Executive Jet will take first delivery of a Boeing BBJ in January, 2000, and plans to add approximately five of the corporate airliners to its Netjets fractional ownership program each year for five years under plans detailed here Sunday. Executive Jet disclosed firm orders for nine BBJs and options for another 16.

The order, plus two others from unnamed customers, brings the BBJ sales total to 46 not including options.

Executive Jet's BBJ order likely will increase to 25 over five years and, ultimately, grow to 50 BBJs, said Executive Jet chairman and CEO Richard Santulli.

"It makes no sense to do a (fractional ownership) program with just 25 aircraft," he said. "We are prepared to take it to the next level." As an example, he cited NetJets's fleet of 52 Citation 5 Ultras.

Fractional ownership "clearly is a field that's going to explode over the next decade around the world," said Warren Buffett. Buffett is chairman and CEO of Berkshire Hathaway, the investment company that owns Executive Jet.

"We're going to move a lot of these planes in fractionals for some time to come," Buffett said. He called Executive Jet Berkshire's most exciting business holding and said it had reached "critical mass" in the fractionals business.

Five of the first six BBJs delivered will be owned by Executive Jet and will make up the core fleet the company says is necessary to ensure availability of BBJs to shareholders in the Netjets fractional ownership program.

"Because of the extended range of this aircraft, it's essential," Executive Jet's Kevin Russell said. The company says it expects the aircraft to be used primarily for international travel, pointing out that its Gulfstream IV-SP fleet already spends considerable time outside the U.S. This weekend, for example, 12 out of 20 GIVs were oversees. The aircraft have flown to 88 countries in the past year.

One-quarter shares in the BBJs have been priced at $11.2 million, entitling owners to 200 hours of travel per year. The monthly management fee for a quarter share is $64,000, and the flight hour cost is $3,400. The company will sell shares in one-eighth increments.

The show here marks the true beginning of the sales effort for BBJ shares. Russell said he expects significant domestic and international interest, as well as a lot of activity from existing flight departments that might need a BBJ-size aircraft on a limited basis.

"This is really a Corporate America business tool," Russell said. "We see it as a great supplement for corporate operators."

The companies made the announcement in the hangar where they are displaying a full-scale mockup of the 19-passenger configuration selected by NetJets. The mockup-likely the largest ever exhibited at NBAA-is mounted on two trailers, and will be open to invited guests during the show.

The interior was completed by Raytheon Systems of Waco, Texas, which already has contracts to complete 11 BBJs, in addition to all the NetJets aircraft. The configuration includes a large forward crew rest compartment, crew lavatory and galley. Moving aft, the main compartment includes a lounge and a six-seat dining table. Aft of that is a second lavatory equipped with a shower and an office with a berthable sofa. The last compartment is a stateroom with a queen-size bed and a second full lavatory with shower.

Following the show, the mockup will begin a six-month, 12 city tour with stops in Los Angeles, San Francisco, Chicago, New York City, Teterboro, White Plains, West Palm Beach, Washington, DC, Columbus, Dallas and Houston.

The BBJ is slated for FAA certification on November 2. The aircraft on display in the static area, which first flew last month and has since accumulated 57 flight test hours, is the first BBJ, and is the test article for the certification flight test program. Boeing has already certificated both the 737-700 and the 737-800 on which the BBJ is based.

The aircraft here is fitted with Aviation Partners winglets. BBJ officials said they have now decided that the BBJ will be equipped with the winglets, although flight test activity for the installation will come after initial certification.

Netjets currently is operating 170 aircraft in its U.S. and European operations, has some 340 aircraft on order, and is expected to disclose additional purchases this week.

By Paul Proctor