Criteria set for first G650 buyers
In a March 13 letter to a prospective buyer, Gulfstream outlined details of the purchase process for the new G650 ultra-long-range jet. Gulfstream began accepting orders for the G650 on April 15, a month after taking the wraps off the program on March 13.
According to the letter, the earliest serial numbers available will be 6002 and 6003 in the third quarter of 2012, at a price of $56 million. Buyers of these two G650s and serial numbers 6009 through 6019 will be able to choose from one of 12 “Gulfstream Select” interiors but with no modifications, while buyers of 6005 through 6008 will have to accept predefined Gulfstream Select interiors, according to the letter.
The price escalates to $57.25 million for S/N 6005 through 6008, then $58.5 million for 6009-6013, topping out at $59.5 million for 6052 and on, at which point
a consumer price index adjustment kicks in. S/N 6052 is scheduled to enter service in 2014.
Due to “issues sometimes encountered with early serial-number aircraft,” Gulfstream has suggested criteria for entry-into-service program buyers. These include: “previous experience with the operation of an early serial-number aircraft (not necessarily a Gulfstream) is preferred; currently operates more than one aircraft in its fleet; preferably utilizes, or has plans to utilize, Gulfstream or GDAS maintenance facilities; operates its own flight department; a commitment for its maintenance department to complete all of its G650 training before delivery; preferably has previous experience with Gulfstream aircraft.”
Placing an Order
Terms of payment begin with a refundable deposit of $500,000, which secures a delivery position. At contract signing, a first payment of $2.5 million is due. Milestone payments of $5 million are each due at first flight, estimated in the third quarter of next year, and FAA certification, estimated in the third quarter of 2011. The letter doesn’t specify whether FAA certification means full certification or provisional. On the GV program, Gulfstream first obtained provisional certification, possibly to meet program milestone requirements. One year before entry-into-service (EIS) delivery, the buyer must make a progress payment of $15 million, followed by another $20 million half a year before EIS. The balance is due upon EIS delivery.
Once Gulfstream began accepting deposits on April 15, their order of receipt determined “the sequence in which the customer will select their desired G650 delivery date,” according to the letter. After Gulfstream notifies the buyer of the available delivery date, the buyer has one business day to try to select another date. Thereafter, the buyer signs the sales agreement and the first $2.5 million progress payment is due and the $500,000 deposit is no longer refundable. Gulfstream pays no interest on the $500,000 deposits, which is refunded if the buyer and Gulfstream do not execute a sales agreement within 30 days.