Ground Clutter

June 8, 2000

A BBJ Perspective

By Ralph Hood

June 2000

At this year's AS3 Supershow in Tampa, the opening keynoter was Borge Boeskov, president of Boeing Business Jets. Listen, when this fellow drops names, we're talking big-time, industrial-strength names. When he talks about Phil and Jack having a little business lunch, he ain't talking about two good ol' boys down at the local coffee shop — he's talking about Boeing Chair Phil Condit and GE CEO Jack Welch.

##Seems the Boeing Business Jet was born when GE Jack mentioned to Bochair Phil that he was buying two Boeing 737s for business use, but he wasn't exactly happy with the range. Bochair Phil, who up ’til that point was unaware that GE Jack was making this little purchase of roughly $100 million dollars, said something sort of like, "Well, shoot, GE Jack ol' buddy, I'll see what I can do ’bout that."

Back at the office, Bochair Phil put Borge Boeskov to work on it, and he figured out they could solve GE Jack's little problem by mixing this wing with that fuselage and those engines. Voila, we have the Boeing Business Jet, or BBJ.

Seems the boys from Seattle still didn't know what they had. They told GE Jack they figured they could sell six or eight of the things a year. GE Jack said naw, he reckoned they could sell ten a year. They are actually selling 24 a year.

Near as I can determine, the BBJ runs about 50 million green, then Raytheon finishes them for about another 30 mil or so, and may the good times continue to roll.

Boeskov readily admitted that general aviation is new to him, and his kind of dollar numbers are new to general aviation. At one point he recognized that piston airplane sales are back up, and he thought that was "kind of nice to see." Hell, for many in the industry it wasn't "kind of nice;" it was quite literally a matter of life or death.

Then Boeskov discussed the airline industry, and I, as a frequent flyer road warrior, found myself nodding along with him. His big-picture outlook explained many things that I have noted from my little-picture position.

Boeskov talked of "segmentation" in the airline industry. In the hotel industry, he pointed out, Four Seasons and the Ritz provide luxury at a price; Motel 6 provides low price with no luxuries and damned few necessities.

In the airline industry, a single airline, Delta for example, tries to provide the full range from luxury down through shut-up-and-sit-down economy — all within not only the same company but within the same airplane. Southwest broke that mold danged near 30 years ago, and now we see AirTran, et. al., following suit. Will we also get luxury airlines? That's been oft tried with little success.

All I know is that I am riding Delta less and less and the cheapies more and more, in spite of my Platinum status which gives me free first-class seats on Delta. I just can't justify the difference in price. If the market totally segments, I know which end I'll be riding.

From a purely selfish standpoint, I hope Boeskov is wrong about airline segmentation. The market seldom heeds my wishes, though, and I fear Boeskov is dead on.

Guess I better get used to the back of the bus.

CAP Ralph Hood is a Certified Speaking Professional who has addressed aviation groups throughout North America. A pilot since 1969, he's insured and sold airplanes at retail and distributor levels and taught aviation management for Southern Illinois University. He currently serves as National CFI Marketing Mentor for AOPA's Project Pilot Instructor Program. He can be reached at [email protected]