Global 7000 & 8000

[X-rated]

I hate to admit Gut was right.

Bombardier announced a two year delay on the 7000 and 8000 today.

http:////www.ainonline.com/aviation-news/business-aviation/2015-07-30/global-7000-faces-two-year-delay

In related news, I've seen one of Flex's new G450's just sitting at the SAV service center for the past 3 days. I haven't seen anyone work on it, but it's pretty darn good looking.

I would imagine the G500/600 will be out before the 7000/8000. That says nothing of the 6 year lead Gulfstream will enjoy with the G650. Looks like Options/Flex won this one.

 

[Some guy]

I hate to admit Gut was right.

Bombardier announced a two year delay on the 7000 and 8000 today.

http:////www.ainonline.com/aviation-news/business-aviation/2015-07-30/global-7000-faces-two-year-delay

In related news, I've seen one of Flex's new G450's just sitting at the SAV service center for the past 3 days. I haven't seen anyone work on it, but it's pretty darn good looking.

I would imagine the G500/600 will be out before the 7000/8000. That says nothing of the 6 year lead Gulfstream will enjoy with the G650. Looks like Options/Flex won this one.

What is the likelihood that a fractional with orders for the G650 cancels, and then another fractional picks up those orders?

SG

 

[gunfyter]

Why would they be feeling so generous?

 

[Some guy]

Why would they be feeling so generous?

Who knows what the powers that be are thinking!? Half of what they do doesn't make sense.

SG

 

[gutshotdraw]

X-Rated, the first step to recovery is admitting you have a problem....

Bombardier has internal, structural issues including a battle between the controlling family and management of the corporation. The development of the C-Series has sucked the air (read: cash) out of the company.

The smoking deal they made NetJets was designed to keep the production line moving and get product on the streets. Problem is, you can't keep selling your product at fire-sale prices for very long on the hope it will stimulate demand elsewhere in the industry. Something about chickens and roosts.....

I was just in Savannah for the semi-annual simulator Easter-Egg hunt. A few notes.

At a time when Bombardier is cutting jobs, Gulfstream is adding shifts and now has 90, YES, 90 pilots in flight test, demo and delivery, and product support flying jobs.

Development of the 500/600 is on track.

The order backlog for the 650 is currently over 3 years although they are trying to accelerate the line and squeeze an extra 1-2 airframes out the door this year and more next year.

RUMOR: The new (old?) NetJets management team has been spending a fair amount of time mending fences with Gulfstream. The retirement of Gulfstream's last President will help with that since he HATED NetJets because of what David Sokol did and Jordan Hansell continued. Now that all three are gone, there is hope for a renewed relationship.

RUMOUR: That renewed relationship may lead to a deal for some 550's and 450's that will be orphaned by the switchover to the 600/500 production.

BEST RUMOUR: After a new contract is done, NetJets will announce a deal with Gulfstream for new aircraft including 450's, 550's, and 650's. There is room in this company for BOTH the Gulfstream and the Global. You don't tell a rich guy he HAS to buy a Chevy when he wants a Ford. You also don't cede a major chunk of your most lucrative business to a competitor. Billy and AJ GET that.

Above info worth every penny you paid for it....

 

[gunfyter]

Gut,

You are saying its possible for us to get aircraft ahead of those with orders?

 

[X-rated]

I can't comment about the power struggle at Bombardier because I know nothing about that, but your comments about the CSeries couldn't be more spot on. However, I also believe the CS300 will be a game changing airplane due to it's reduced wight due to Fly By Wire and advanced material construction, high efficiency wing, and next gen fuel efficient engines. It will seat almost an identical number of passengers as a 737 MAX-7, is 33 percent cheaper to acquire, and will be substantially more fuel efficient. On a 3 wide X 3 wide airplane, 33.3 percent of passengers have middle seats. On a 3/2 airplane only 20 percent have middle seats. Once the platform is proven, I believe the bean counters will will drive orders.

They're breaking ground like Boing did with the 787 and Airbus did with the A380/A350. Unfortunately, they are also experiencing the same financial consequence. All were years late and far enough over budget to nearly sink the company. It's hard to say whether they will ever build enough planes to make the gamble pay off. Time will tell.

As for selling planes at a discount, I don't have a good enough handle on what their profit margin is. If they can sell two planes at 15 percent margin instead of 1 plane at 25 percent margin, it seems like that might make sense. I really don't have any idea what Bombardier makes on a Global 6000, but I know damn well it doesn't cost 12 Million more to build than a Global 5000. My guess is the delta is probably less than a million and the Global 6000 has a huge profit margin. I honestly think what you call 'fire sale prices" might still be significantly profitable.

As for the 7000, We're keeping our position. I've recently been told it will easily beat the promised speed and range numbers. Again, time will tell. In any case, we want the larger cabin, and so far, I haven't heard any rumors about plans to stretch the G650 into a G750.

 

[gutshotdraw]

Gunfyter,

As happens when a follow-on model of airplane is close to certification, the previous model production wrap-up always seems to produce a few orphans. Airplanes that the previous intended customer converted into an order for the new model.

Rumor also has it that there are already a few 450's and 550's sitting unsold from customers that traded up to a future 500/600 or even 650. I could easily see us picking up a few of those airplanes and extending the Gulfstream program indefinitely.

Positions for 650's might be a little harder to come by but even 3 years out, we would have customers sticking around instead of leaving for the competition.

X-rated, Bombardier has committments for about 200 of the CSeries while Boeing and Airbus have orders for THOUSANDS of 737 Max and A320 Neo on the books. Doesn't seem to be much interest by the airlines.

Meanwhile, you didn't believe me when I predicted a delay in the program. I'll make another prediction. IF the 7000 EVER makes it to market (a 50-50 prop at this stage), it won't come CLOSE to making predicted performance and won't touch the G650ER's numbers, let alone whatever Savannah comes up with in the five years it will take Bombardier to get the 7000 to market.

 

[X-rated]

Gunfyter,

As happens when a follow-on model of airplane is close to certification, the previous model production wrap-up always seems to produce a few orphans. Airplanes that the previous intended customer converted into an order for the new model.

Rumor also has it that there are already a few 450's and 550's sitting unsold from customers that traded up to a future 500/600 or even 650. I could easily see us picking up a few of those airplanes and extending the Gulfstream program indefinitely.

Positions for 650's might be a little harder to come by but even 3 years out, we would have customers sticking around instead of leaving for the competition.

X-rated, Bombardier has committments for about 200 of the CSeries while Boeing and Airbus have orders for THOUSANDS of 737 Max and A320 Neo on the books. Doesn't seem to be much interest by the airlines.

Meanwhile, you didn't believe me when I predicted a delay in the program. I'll make another prediction. IF the 7000 EVER makes it to market (a 50-50 prop at this stage), it won't come CLOSE to making predicted performance and won't touch the G650ER's numbers, let alone whatever Savannah comes up with in the five years it will take Bombardier to get the 7000 to market.

Like I said, I don't see a lot of CS300 orders flowing in until it's a proven platform. If it meets it's numbers, I think the tide will turn, and the order book will fill up. There are several big players who have shown interest, but they are waiting to see the proof. I doubt they will ever sell a significant number of 100's.

I'm pretty curious why you say the 7000 is a 50/50 proposition. The Canadian Government has already made assurances they will stand behind Bombardier with bailout money if necessary, and the 7000/8000 will be by far their most profitable offering. Can you explain your reasoning a bit? Also, unless there are additional delays, which of course is possible, It's my understanding the first deliveries will take place in the 3rd quarter of 2018. Are you predicting another delay too?

It's hard to compare the 7000 to the G650ER because they are vastly different sized airplanes. It's like saying the Global 6000 has better range than the G450. So? The G650ER compares almost identically in size to the the 7900nm @ M.85 8000. I doubt you would make the same prediction against head to head competitors. However, I heard this week from Bombardier that the 7000 will beat it's advertised 7300 nm at M.85. So, who knows. I'm not making any bets and honestly don't care very much.

As I've said before, having flown both the G650 and the XRS, each airplane has plenty of plusses and minuses in comparison to each other. I like the G650 and find the performance stunning. Gulfstream's Service and support is top notch especially domestically. However, I get the impression you think the G650 is just a bigger G550. That is not nearly the case. It's a great plane and has a lot going for it, but it has plenty of shortcomings too.

 

[G4dude]

Like I said, I don't see a lot of CS300 orders flowing in until it's a proven platform. If it meets it's numbers, I think the tide will turn, and the order book will fill up. There are several big players who have shown interest, but they are waiting to see the proof. I doubt they will ever sell a significant number of 100's.

I'm pretty curious why you say the 7000 is a 50/50 proposition. The Canadian Government has already made assurances they will stand behind Bombardier with bailout money if necessary, and the 7000/8000 will be by far their most profitable offering. Can you explain your reasoning a bit? Also, unless there are additional delays, which of course is possible, It's my understanding the first deliveries will take place in the 3rd quarter of 2018. Are you predicting another delay too?

It's hard to compare the 7000 to the G650ER because they are vastly different sized airplanes. It's like saying the Global 6000 has better range than the G450. So? The G650ER compares almost identically in size to the the 7900nm @ M.85 8000. I doubt you would make the same prediction against head to head competitors. However, I heard this week from Bombardier that the 7000 will beat it's advertised 7300 nm at M.85. So, who knows. I'm not making any bets and honestly don't care very much.

As I've said before, having flown both the G650 and the XRS, each airplane has plenty of plusses and minuses in comparison to each other. I like the G650 and find the performance stunning. Gulfstream's Service and support is top notch especially domestically. However, I get the impression you think the G650 is just a bigger G550. That is not nearly the case. It's a great plane and has a lot going for it, but it has plenty of shortcomings too.

Great conversation, gents. Bombardier has a history of overstating performance estimates. Also, demand seems to be soft for the 5000 and 6000, in spite of the lower price, somewhat to my surprise. I agree with Gutshot in every respect. However, if I were an owner, I would go with the Global, but most owners prefer Gulfstreams and their brand loyalty is very strong. Again, to my surprise.