MEBAA Convention News

BBJ Develops ‘All Access Pass’ To Boost Used Market

 - December 7, 2016, 5:00 AM

Boeing Business Jets (BBJ) is working to boost the used market for its airplanes by developing a package of purchase support services and coordinating with completion centers on power-by-the-hour programs for would-be buyers. Noting pre-owned business jet transactions are trending upward, BBJ president David Longridge said, “Boeing is very focused on the fact that many of our customers may be looking to sell their current BBJs to buy a new one.”

BBJ (Chalet A9-A10) has assembled an “all access pass” that covers a series of typical charges the used aircraft owners may incur. The all access pass will cover Boeing technical support; document updates; waiver of intellectual support royalties involved with upgrades; BBJ training course options; and onsite contract and sales document support to assist with the actual sale and entry into service.

The access pass is priced at about $500,000, Longridge said, estimating it encompasses about $3.5 million-$4 million in value. He noted that either sellers of used BBJs can buy the pass as an incentive for would-be buyers, or purchasers of used BBJs could buy the pass.

In addition, BBJ has turned its attention to support of the used aircraft, and has worked with its authorized centers to develop a series of power-by-the-hour type programs that would be offered through those centers. The programs include coverages for either the airframe or engine that would encompass both scheduled and unscheduled maintenance, parts, line replaceable units and labor. For the airframe package, Part M continuous airworthiness compliance also would be included.

Another package was developed for interiors that could extend to upgrades, refurbishment, cleaning and scheduled and unscheduled maintenance.

BBJ typically has a smaller percentage of the fleet available—seven percent compared with the business jet average of 11 percent. But Longridge said, “We are concerned about how long it takes to sell a BBJ when it is used,” adding the new purchase support package and coordination on power-by-the hour are designed to “make buying and selling a used BBJ much easier.”

BBJ has worked on the packages as the market for new aircraft has softened in the past year. Longridge noted sales were off by about 50 percent, or by about four aircraft, saying he believed the lead up to the Brexit vote and the U.S. elections had caused the market “to pause…This year has been tougher than last year, there’s no doubt about that.”

With the elections over, BBJ is seeing activity starting to increase and has about three to four deals in the works. Longridge did not think those deals would conclude by the end of the year but he was optimistic that the market would pick up next year, and believes the entry of the new BBJ Max 7 will help spur sales.

BBJ still has a solid backlog of BBJs with 20 airplanes yet to be delivered. Another 19 are in completion centers. The BBJ fleet has grown to 200 with 239 total ordered.

Longridge, speaking to reporters at MEBAA on December 6, stressed that “the Middle East is an extremely important market to BBJ,” accounting for about one-third of the company’s sales.