Monday, October 13, 2014

Gulfstream to Unveil New Secret Jet • Little Is Known About New Plane, Code-Named ‘P42,’ Whose Mere Existence Hasn’t Been Confirmed

The Wall Street Journal
By Jon Ostrower


Oct. 12, 2014 8:06 p.m. ET


Gulfstream Aerospace Corp. will unveil a new business jet on Tuesday that has been developed with the kind of secrecy typically reserved for a military spy plane or the latest smartphone.

The cloak around the project even led one Wall Street analyst to scrutinize satellite photos of Gulfstream’s Savannah, Ga. production facility for clues, highlighting the financial importance to parent General Dynamics Corp. of the project, code-named P42.

Gulfstream has become a master of building high-end business jets in secret, unveiling its flagship G650 and the smaller G280 well after it started manufacturing the first planes. The approach has helped it become the global market leader by revenue.

Keeping secrets in the civil aerospace business is a considerable challenge. Cutting-edge engineering can create complex supply chains, and the industry attracts intense regulatory oversight. Social networks and ubiquitous digital media have made keeping P42’s secret more challenging than for previous projects.

Historically, Gulfstream has kept a tight circle of suppliers that have worked on each new program and kept the flow of information scarce. Analysts believe that much of the technology inside P42 was pioneered on the G650, which was introduced in 2012 and can fly up to 18 passengers or travel 7,000 nautical miles—the longest range for any business jet currently in service.

Gulfstream hasn’t acknowledged it will unveil its latest jet this week, let alone the project’s existence with a nondescript invitation for media and analysts to its Tuesday announcement, but several people familiar with the project confirmed it would involve the new plane.

New large-cabin jets that can span oceans and fly thousands of miles are the new sweet spot of a business-jet market that is still in recovery mode after the financial crisis. Annual sales nearly halved from their 2008 peak in 2012, and they only slightly rebounded last year.

Gulfstream’s new jet has been developed from scratch to eventually replace its best-selling G550 model and later the smaller G450, said multiple people familiar with its plans.

The new family of jets will be powered by a new engine made by Pratt & Whitney Canada, said the people. The unit of United Technologies Corp. beat out incumbent supplier Rolls-Royce Holdings PLC, they said.

One semiofficial acknowledgment of the jet’s development was found in a 2012 European Commission decision document on the merger between United Technologies Corp. and Goodrich Corp. that detailed the companies’ active projects, including the P42.

There have been other clues. LinkedIn profiles of those working at suppliers have listed the P42 project in their professional histories and a Pratt & Whitney-owned Boeing 747 test airplane was flown with a mysterious business jet-sized engine during the summer of 2013.

While the project has been known as the “worst-kept secret in aerospace,” wrote one analyst, few details about the new jet are known outside of Gulfstream, and exactly what the jet will be called remains unknown. The company has trademarked dozens of possible “G” permutations.

The P42 moniker is expected to be shed at an unveiling at its Savannah plant which quietly expanded its manufacturing footprint by an estimated 2 million square feet to prepare for the project, according to Jefferies & Co. analyst Howard Rubel, who wrote that satellite photos of the Georgia factory indicated the new jets were on the horizon.

General Dynamics, which bought Gulfstream in 1999 for $4.8 billion, has never acknowledged any specific development effort, previously saying that it would only announce a project when it was significantly close to being ready to fly. Analysts anticipate deliveries to begin as early as late 2015, but Gulfstream’s two most-recent models only started delivering nearly three years after first flying, because of the intensive certification effort and meticulous completion of the bespoke buyer interiors.

A Gulfstream spokesman declined to comment.

So-called Super Large and Long Range business jets have evolved into highflying hotel suites and Gulfstream is one of a trio of manufacturers designing purpose-built jets to fight for the attention of corporate flight departments and the globe-hopping ultrawealthy. Convertible sleeping berths, kitchens, onboard showers, satellite Wi-Fi Internet and the ability to fly nonstop for up to 15 hours, have lead the modest revival for products whose sales were decimated during the global recession.

These largest new and updated models from Gulfstream, Bombardier Inc. and Dassault Aviation SA have helped push these three manufacturers’ deliveries for the biggest and longest-range aircraft up 30% since 2012, largely led by Gulfstream.

The P42 jets will aim right for this Super Large-cabin jet market, but for customers who may not need the endurance of Gulfstream’s new $66.5 million G650ER, which can fly 7,500 nautical miles—connecting Hong Kong to New York nonstop—and enters service next year.

Analysts anticipate the P42 will fly around 5,000 nautical miles, but Gulfstream has historically under-promoted the performance of its jets as range has been the must-have feature for new buyers. The G650, certified in 2012, was able to fly 6,000 nautical miles cruising at nine-tenths the speed of sound, 1,000 nautical miles farther than first advertised when the project was unveiled in 2008. The pair of aircraft P42 will replace—the G550 and G450—have ranges of 6,750 and 4,350 nautical miles, respectively.

General Dynamics, which reports third quarter earnings on Oct. 22, has been the best-performing aerospace and defense stock this year, up 27% to date versus a 6% rise for defense stocks and a 5% decline for commercial aerospace companies, which analysts largely attribute to Gulfstream’s growth and rising profits from the G650 jet.

Tuesday’s planned jet launch and increased G650 production are moving the company closer to a tipping point where more than half its profits are generated from commercial markets—a first for the world’s fifth-largest defense contractor by revenue.

—Doug Cameron contributed to this article.


- Source ►    http://online.wsj.com

No comments:

Post a Comment