airplane 311 (R).
(photo credit: Reuters)
As the world’s manufacturers of executive jets struggle against the steady drop
in sales, Gulfstream and Israel Aerospace Industries Ltd. refuse to give
up on their new plane – the G-250.
The plane, produced at IAI’s factory
in Israel and marketed by Gulfstream, will be renamed the G-280 in an attempt to
tempt wealthy Chinese buyers, a clientele that the two companies are targeting
In the wake of the slump of executive jet sales
following the 2008 global financial crisis, Gulfstream and IAI, after deciding
to focus on the Chinese market, chose to include the number “8,” which
symbolizes wealth and luck in China, in the name of their G-250 executive
An aviation industry source told “Globes” that it was premature to
say whether the name change will achieve better business results for the two
companies in China, but did indicate that there has been some positive
“There are negotiations at various stages between Gulfstream
representatives and potential Chinese customers who are showing great interest
in these planes,” he said.
“The Chinese are very sensitive to the number
‘8’ and Western companies wanting to business there often mention the number at
some point in negotiations with Chinese companies, including when given a
quote. This number is considered a sure winner in China.”
three years of losses by its executive jet division, IAI and Gulfstream’s new
marketing venture is no surprise. In its financial report for 2010, IAI reported
heavy losses, due to the nose dive in orders for executive jets. Sales of
executive jets fell from 70 a year before the crisis to 15-20 a year
The drop in orders has strongly affected IAI civil aviation
division, which has 2,400 employees whom the company paid $37 million in
redundancy payments last year. This cost was cut to $20 million, after IAI CEO
Yitzhak Nissan transferred division employees to other units, sent others on
leave, and took other measures.
In the past, IAI attributed part of the
drop in executive jet sales to second-hand planes put up for sale by the world’s
wealthiest individuals, which flooded the market. Given the frequency of
economic crises and continuing market uncertainty, financial institutions are
tightening their credit terms for buyers of new executive jets.