““It’s not so much a frenzy as it was before, but in the long term it’s going in the right direction.” ”
The Gulfstream GV was the first true long-range business jet. There are many impressive things about it, but perhaps the most salient is this: Last year alone, the value of a used GV shot up 18 percent. In 2002, a new GV sold for $43.2 million. Last year on the used market, that airplane commanded $45.5 million. It is basically a seller's market in a bidding war-this for an airplane with direct operating costs of more than $10 a mile and annual total costs for 400 hours (not including depreciation) of almost $3 million.
Another thing that makes the GV special is the fact that it got built at all. The GV came along when Gulfstream was in the throes of significant internal organizational and financial turmoil and brutal and bare-knuckle external competition from both Bombardier and Dassault. Between 1985 and 1990, the company had three owners. At one point during the GV's development, Gulfstream's cash reserves dwindled to less than 90 days' worth. An IPO, designed to raise much-needed cash, tanked. Annual losses topped $100 million. There was significant executive turnover and the company's owner, Forstmann Little & Co., ended up pumping more than $450 million into the manufacturer to modernize it and keep it afloat. In 1993 Teddy Forstmann, one of the founders of the New York private equity firm, took over as Gulfstream's chairman, though he had never run a company before, and left the CEO slot vacant. He also recruited new executive talent and a board of directors comprised of well-connected former cabinet secretaries, generals and Washington operators with gold-plated Rolodexes-people who could personally convince Fortune 100 CEOs, celebrities, heads of state, the Pentagon and the occasional three-letter government agency that they needed the GV. (Forstmann sold Gulfstream to General Dynamics for $5.3 billion in 1999.)
Even before the GV made its first flight in November 1995, Gulfstream had turned the corner. Costs were cut, productivity increased, the order book built, and the company achieved a modest 5 percent profit in 1994. But Gulfstream was not out of the tall grass, despite a staggering $500 million order that year from Executive Jet Aviation, the then-parent of
fractional ownership program NetJets.
The GV was still a substantial technical and financial risk. Compared with the Gulfstream GIV and GIV-SP, it had new avionics and engines, a longer wing, a stretched fuselage and a lot more range-6,500 nautical miles with eight passengers and a crew of four, or 1,700 more than the GIV-SP. But the question remained: would enough customers order the $37.5 million (1996 dollars) GV to make the program a success?
Technologically, the airplane was impressive. A 1997 winner of the National Aeronautic Association's Collier Trophy for aeronautical achievement, it featured a six-screen Honeywell digital avionics system that was extremely advanced for the time-and in many ways still is today.
The BMW/Rolls-Royce BR710 engines are lighter and more fuel-efficient than the engines on the GIV, yet generate more thrust. These engines are also incredibly robust and power airliners including the Boeing 717. (Although these engines have a recommended time between overhaul limit of 7,000 hours, rebuilding one is pricey-$1 million each, on average.) The BR710 was also one of the first engines for the corporate jet market developed with full authority digital engine control (FADEC), a computerized control system that precisely regulates power and fuel consumption. The GV's 93-foot-long wing holds its entire maximum fuel supply of 41,300 pounds, a large contributor to the aircraft's 90,500-pound maximum takeoff weight.
Even with all that heft, a fully loaded GV can lift off in less than 6,100 feet (standard conditions) and land to a stop in less than 2,800 feet. And it still beats the weight restrictions at places like Aspen, Colo., and Teterboro, N.J.
Compared with the GIV's cabin, the GV's, at 50 feet, is six feet longer-space needed for a crew rest area or a larger galley. Overall cabin volume is a capacious 1,669 cubic feet and there are 226 cubic feet of baggage space.
GV cabins can be configured in a variety of layouts that generally seat 12 to 14. Ample natural light comes into the cabin from 14 of Gulfstream's large signature oval windows. The cabin is 88 inches wide and-at 6 feet, 2 inches high-has true stand-up headroom.
The cost of refurbishing a cabin ranges from around $300,000 for basic recovering work to several million dollars for more involved projects. A good exterior paint job can be had for about $200,000. Other popular options include avionics upgrades and satellite communications and entertainment systems.
The FAA certified the GV in 1997 and by 2000 Gulfstream had delivered 100 of them. Production continued at an average annual rate of 30, ending in 2003 with the introduction of the G500 and G550 models. These were essentially the same aircraft/engine combination with upgraded avionics and slightly different weight and range numbers. (The G550 has a maximum range of 6,750 nautical miles.)
But even with these refreshed models and new competition from Bombardier and Dassault, the GV remains the standard by which the ultra-long-range, large business jet field is judged. The extremely tight market for used models leaves little doubt of that.
Mark Huber welcomes comments and suggestions at: