Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and Gulfstream Aerospace Corporation's G280 executive jet has obtained type certificates from the US Federal Aviation Administration (FAA) and the Israel Civil Aviation Authority (ICAA), verifying the plane's airworthiness. The certification is one of the last steps before deliveries to customers.
IAI and Gulfstream, a wholly-owned subsidiary of General Dynamics Co. (NYSE: GD), have been developing the G280 and its systems for six years and have conducted test flights to tests the systems in extreme flight conditions. IAI CEO Joseph Weiss told "Globes" today, "Obtaining the FAA certification paves the way for IAI to obtain certification from authorities in Europe, Canada, and China, which will make it possible to expand the new plane's market."
Aviation experts estimate the price of the G280 at $15-25 million. It has a range of 3,600 nautical miles (6,667 kilometers) at Mach 0.80, and can fly non-stop from New York to London, comfortably carrying ten passengers. Under the agreement between IAI and Gulfstream, IAI will manufacture the plane in Israel, and Gulfstream will fit it out for customers in Texas. Weiss says that this is the first mid to large-sized executive jet with state-of-the-art avionics.
The FAA certification, in which the ICAA cooperated, will enable Gulfstream to begin sales of the G280 to US customers within a year. ICAA director Giora Rom said that the FAA licensing process, involved 60,000 man-hours by the ICAA and 150 flight hours to test the plane's systems. "The test flights and licensing demonstrated that the plane met, and even exceeded, all performance expectations," he said.
Sources involved in the G280's development have said that IAI and Gulfstream will have to manufacture and sell scores of planes in the coming years to large companies and rich businessmen. Gulfstream is currently focusing its marketing efforts on China, where there is still interest and the financial wherewithal in executive jets by people able to afford them.
Executive jet industry is recovering
The executive jet industry suffered a grievous blow in the 2008 global economic crisis, as rich men gave up on dreams of private jets, and others sold the planes they owned. The slump in demand resulted in stagnant production, which IAI's Commercial Aircraft Division felt hard, affecting IAI's business results as a whole.
IAI said today that the executive jet market is still far from recovering from the crisis, but that there has been progress. "We're slowly recovering from the crisis," said Weiss. "Analysts believe that we will reach the 2008 levels of executive jet sales only in 2016 or 2017. Nonetheless, it was important to continue operating and developing in the segment, because every forecast predicts that the market will steadily grow. The world is a global village, and executives want to shorten the distance between the areas of their operations with good, reliable, and safe planes, and we have a lot to offer there."
Published by Globes [online], Israel business news - www.globes-online.com - on September 5, 2012
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