Swiss-based VistaJet, already one of the fastest growing operators worldwide, took a step to significantly accelerate that growth with an order for up to 142 Global aircraft that have a potential value of $7.8 billion.
The contract includes firm orders for a mix of 56 Global business jets valued at $3.1 billion, marking the largest single firm order that Bombardier has received for its business jet line to date.
NetJets had placed orders and options for up to 120 Globals with a total value of $6.7 billion, but the firm order’s value was $2.8 billion. NetJets separately ordered 100 Bombardier Challengers with options for 175 more, but again the firm value of that order is $2.6 billion.
The latest order pushes VistaJet’s firm backlog of Bombardier aircraft to about $5 billion. The company, which had a fleet of a little more than two dozen aircraft in 2011, recently accepted its 50th aircraft. VistaJet flies an all-Bombardier fleet – including Global 6000, Challenger 850, Challenger 605,60 XR – for both on-demand and its fixed hourly-rate program.
The operator also has a number of orders for Global 7000 and 8000 aircraft, which are expected to enter service in 2016 and 2017, respectively.
The new order calls for 25 Global 5000s, 25 Global 6000s and six Global 8000 aircraft. Deliveries are to begin in 2014. The options, if exercised, would add another 40 Global 5000s, 40 Global 6000s and six Global 8000s.
The order comes as VistaJet concentrates on a global expansion of its services. The operator earlier this year signed partnership agreements in both China and Russia, and VistaJet founder and Chairman Thomas Flohr says, “The level of demand we have seen in growth markets around the globe has been unprecedented.”
Plans call for the aircraft to help build services in China and Russia, along with other growth markets such as the Middle East and Africa. The aircraft also will serve the U.S. East and West Coasts. The company says it made a strategic decision to “fast-track the growth of the fleet” so it could focus on wide-cabin, long-range aircraft that provide nonstop, point-to-point service globally.
In concert with its growing fleet, which will carry 25,000 passengers on 10,000 flights this year, VistaJet is making plans to expand its sales force beginning next year. In addition to fleet growth, the aircraft also will help keep VistaJet’s fleet one of the youngest in the industry. With nearly half of its fleet having arrived in the past two years, the company has maintained an average age of less than two years.
For Bombardier, the order marks another major win for its Global family. Bombardier struck its first deal with NetJets – which previously had flown Gulfstream aircraft – in March 2011. That deal included firm orders for 50 Globals.
But NetJets was among a number of multi-fleet Global orders that the Montreal-based aircraft manufacturer has received. In the third quarter of 2012 alone, Bombardier had received three multi-fleet contracts for 19 Globals valued at $1.2 billion, contributing to a 50% increase in Bombardier Business Aircraft’s net firm orders for the quarter. Even before the VistaJet order, Global backlog stretched nearly three years to 34 months. But adding in the Global 7000 and 8000, which are still four years away from service, Bombardier has orders likely spanning over more than a decade.
The boom in Global orders is helping offset Bombardier’s sagging regional jet business, which has been slow going while the company develops the, as well as its Learjet business, which continues to suffers in the sluggish light- to midsized market.
While Bombardier’s large business jets are currently faring the best among its aircraft lines, Bank of America (BofA) Merrill Lynch Global Research views the order “as positive support for the entire franchise.”
The order also signals the continuing underlying strength of the large-cabin market, says BofA Merrill Lynch analyst Ronald Epstein. RBC Capital Markets analyst Robert Stallard adds that the order is consistent with prevailing sentiments that the business jet environment is “decent to improving for large cabin but still under the cosh for small cabin.” Stallard adds that RBC Capital Markets believes that demand should remain solid for all the airframers in the niche, including both Gulfstream and.