Nov. 27 (Bloomberg) -- Bombardier Inc. won its biggest-ever business-jet deal from luxury air-charter specialist VistaJet Holding SA, which ordered 56 of the Canadian company’s Global- series aircraft plus 86 options as it taps Asian demand.
The deal has a value of $3.1 billion, which will increase to $7.8 billion should all the planes be taken, Montreal-based Bombardier said today in a statement. Deliveries will begin in January, 2014, and unfold at a rate of one a month for 10 years.
Business-jet orders are reviving after a four-year slump, with the NetJets unit of Warren Buffett’s Berkshire Hathaway Inc. placing a $7.3 billion order for 275 Bombardier Challenger aircraft in June. VistaJet will deploy its jets in markets such as China, Russia, the Middle East and Africa, it said today.
“This is an impressive order,” said Paul Sheridan, head of Asian consulting at aviation advisory firm Ascend Worldwide Ltd. Global-series planes have larger cabins, making them well-suited to Chinese demand, where the emphasis is on high-status models, as well as promising markets including Indonesia, he said.
VistaJet’s order comprises 25 Global 5000 planes, which can seat 20 people and connect San Francisco with Seoul, 25 Global 6000s seating eight and able fly from London to Tokyo, and six Global 8000s that can also carry eight and travel 7,900 nautical miles (14,630 kilometers) to link New York with Hong Kong. It holds options for 40 each of the 5000 and 6000, plus six 8000s.
Bombardier sees demand for 24,000 business jets over the next two decades, with 45 percent of sales falling into the Global family segment, Steve Ridolfi, president of the company’s business-aircraft unit, said at a press briefing in London.
“By any standard, this is a historic order for Bombardier,” Ridolfi said. “We are thrilled.”
Domiciled in Switzerland with its main base in London, VistaJet already has 50 planes with which it targets corporate customers and wealthy individuals traveling point to point at short notice. The new jets will link remoter markets with the rest of the world, especially for clients whose travel patterns don’t justify membership of a time-share style program like NetJets, owner Thomas Flohr said today in an interview.
“We’re advising clients not to take fractional assets just for wanting to fly 100, 200 hours a year,” said Flohr, who founded VistaJet seven years ago. “We’re focusing on the very top end of the market, which is intercontinental traffic.”
Requirements such as a need to fly New York-Shanghai non- stop and as fast as possible are tilting the market toward the biggest, most luxurious models such as the Global 8000, he said.
Growth in emerging markets is also poised to switch demand toward more modern aircraft from older, second-hand planes, said Flohr, who plans a 13-day sales trip to 17 cities in nations including Kazakhstan, Mongolia, Angola and Azerbaijan.