Bombardier’s biggest order – why size matters

Global 5000

The record-breaking order includes 25 of Bombardier's Global 5000 aircraft.

Big news today that manufacturer Bombardier has just signed its biggest ever order: 56 new jets and options for a further 86 – for charter operator VistaJet.  And big news too in terms of cabin size – as these are for aircraft in the Bombardier Global family – large, long-range business jets.

This is another example of a growing industry trend amongst bigger industry operators to focus on larger jets, something that has been apparent for some time. NetJets during the recession mothballed large numbers of their smaller jet fleet, which have been a drain on the company.

Demand for long range private jet travel is being fuelled by emerging markets, according to Brant Dahlfors, vice-president sales for Canada’s Bombardier Business Aircraft: “Bosses in the United States need to get to those emerging markets and the wealth creators in those emerging markets want to go out and explore the world,” he says. And of course they want to get there in the shortest possible time.

At the same time, operating margins on small jets are looking less attractive for aircraft operators. Here’s why:

  • In a nutshell, running costs are disproportionately higher for small jets.
  • They still require two pilots (e.g. NetJets largely pay their pilots the same, regardless of aircraft size).
  • Whilst landing and handling fees at airports increase with larger aircraft the base level is very high for small jets.
  • Engineering is often more complex and frequent on smaller private jets, as they tend to be less reliable than long range aircraft. So costs can be prohibitive.
  • Back room Operations costs are exactly the same, eg all flights require a flight plan regardless if they are flying for 30mins or 14hrs.

All this means good news for the charterer. With competition fiercer than ever, operators’ margins are being squeezed to give maximum cost savings to the private jet customer.