IAI, Gulfstream target executives from China with G-280 jet

Lucky number ‘8’ added to plane’s name to capitalize on local sensitivities, tempt wealthy Chinese buyers.

By YUVAL AZOULAI/GLOBES
airplane 311 (R) (photo credit: Reuters)
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 for development.
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 jet.
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 movement.
“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.”
After 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 afterwards.
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.