Airbus, Bombardier seek new widebody corporate market

 - September 14, 2006, 10:36 AM

For some years now, business jet manufacturers have been offering their customers a standard choice of cabin configurations and amenities, along with a list of standard options. Some in the industry have referred to the product as “standardized cabins”; others have less charitably called them “cookie-cutter cabins.” It was an effort to hold the line on costs yet still provide a quality interior with a sufficient number of optional upgrades to please the more demanding customer. It has apparently been successful, and the idea has expanded to the market for larger business jets.

Bombardier, for example, has taken this approach with its Challengers and Globals. With the assistance of select vendors, it does the standard and standard-plus-options Challenger and Global interiors at its Montreal completion center. For more highly individualized interiors, the aircraft are sent to either Midcoast Aviation at St. Louis Downtown Airport in Cahokia, Ill., or to Savannah Air Center in Savannah, Ga.

Now Bombardier has taken the process further to launch a corporate/executive shuttle line–the Challengers 850, 870 and 890–to “meet the evolving needs of existing shuttle operators and a new generation of potential users.” All three are business jet adaptations of Bombardier’s CRJ200, CRJ700 and CRJ900 airliners, respectively.

Bombardier selected Lufthansa Technik in Hamburg, Germany, to do the Challenger 850 executive/VIP interiors. Lufthansa has orders for 17 interiors. The finished airplane is priced at $25.2 million, about $5 million less than the customized Corporate Jetliner version of the CRJ200 regional twinjet.

With orders brisk, Bombardier has also approved Midcoast Aviation in the U.S. to do additional Challenger 850 cabins to the Lufthansa Technik design. Midcoast has already taken delivery of the first green 850 and expects to do another seven.

According to Bombardier Business Aircraft v-p James Hoblyn, the manufacturer expects to hold 10 to 15 slots a year on its regional jet production line for airplanes that will undergo the shuttle or executive/VIP interior treatment.

Streamlining the Completions Process

Sensing the market possibilities for a standardized-cabin bizliner, Airbus earlier this year announced it had reached an agreement with Lufthansa Technik to do fast-turn-around executive/VIP Airbus A318 interiors with standard cabin configurations and components at a finished price of $49 million, some $6 million less than the price tag for the slightly larger A319-based Airbus Corporate Jetliner. As of May, Airbus had orders for 13 of what it has dubbed the A318 Elite.

The airplane comes in two standardized configurations–the Elite for 14 passengers or the Elite Plus with 18 seats.

According to Lufthansa Technik senior v-p of marketing and sales Walter Heerdt, the Hamburg completions shop expects to see the first Elite roll in before year-end and roll out finished four months later.

While Boeing Business Jets normally sells its BBJ line to customers green, the Seattle company does market the airplane with what it calls a Leadership Select cabin. The aircraft, like other BBJs, is sent green to a Boeing-recognized independent completion center but with cabin specs that limit the cabin cost to $10 million. In its green form the BBJ sells for about $42 million. While the cost of a finished BBJ is in the $55 million range, a highly individualized interior can drive the price of a completed airplane to well over $60 million.

Heerdt sees a broader worldwide demand for standardized cabins, particularly in emerging markets such as Russia and China, as well as among charter operators. In fact, the first A318 Elite order came at the NBAA Convention last fall from Zurich-based charter operator Comlux. Less than two weeks later, Saudi Arabia’s National Air Services ordered five Elites, with options for five more.

One of the first customers for a Challenger 850 was the head of a Russian firm who ordered an executive model for himself and a Challenger 870 shuttle for staff support.

Heerdt sees a growing market for the low end of the widebody standardized cabin aircraft. The advantage, in addition to a lower acquisition price, he said, is the speed with which a standardized cabin can be completed. “When people buy an airplane they want it fast, and we can do it a lot more quickly with a standardized cabin.”