'Battle of Bigs' Heats Up as Global 7500 Nears Entry

 - September 25, 2018, 11:20 AM

The service entry of Bombardier’s flagship Global 7500 in the coming months will force Gulfstream Aerospace “to start thinking about how it positions the G650 in the market after facing minimal competition for six years,” according to a report issued yesterday by Citi Research. However, the entry of the 7500 into the market isn’t likely “to wreck G650 values,” because the 7,700-nm-range Bombardier jet has a higher price point, said Citi Research U.S. aerospace and defense senior equity analyst Jonathan Raviv.

Dubbing this the “battle of the bigs,” he said there’s an expectation that Gulfstream will soon announce a new product to maintain its position at the high end of the market and to slow market acceptance of the 7500. Raviv had previously expected such an announcement ahead of next month’s NBAA Convention, but “we haven’t heard of invites being sent out for an event, so it could be after NBAA.”

Announcement or no, Gulfstream’s response to the Global 7500 will be a “key conversation topic” at the NBAA show, he predicted. “Combined with Gulfstream facing competition from the recently announced Global 5500/6500, a revived Bombardier means the next five years are very different for Gulfstream versus the last five.” However, he pointed out that this is not a new dynamic, but instead a return to a normal dynamic between the two companies.