Boeing hopes for a Trump boost for business jets

DUBAI: US President-elect Donald Trump could give the business jet market a much needed boost after a “tough” 2016, Boeing Business Jets President David Longridge said in Dubai.
The international property tycoon has his own private fleet, including a Boeing 757, which he used to criss-cross the US during the presidential campaign.
Longridge believes Trump’s use of private aircraft could encourage other business owners to do likewise and help the industry that is often associated with the ultra-rich and came under fire in US President Barack Obama’s first term of office.
In 2013, Obama proposed stretching a depreciation tax-break schedule for corporate jets from five years to seven years. Business jet makers objected, saying it would be damaging for the industry. Obama has not changed the depreciation tax-break on corporate jets and is unlikely to do so before his term ends in January.
“Donald Trump is a lot more open about his use of business aviation than I think it’s fair to say any previous US president we’ve had, he said at press conference.
“I can’t help but think, and maybe this is the optimistic in me, that bodes well for us as an industry.”
Longridge’s comments were made less than two hours before Trump called on the government to cancel the purchase of Boeing’s new Air Force One plane on Tuesday, saying it was “ridiculous” and too expensive.
“Boeing is building a brand new 747 Air Force One for future presidents but costs are out of control, more than $4 billion. Cancel order!” Trump said in a Twitter message.
Boeing has not yet been awarded the money to build the two proposed Air Force One replacements and is currently working on engineering and designing the aircraft.
Boeing is forecasting a recovery in its business jet business over the next two years after sales more than halved this year to three aircraft, all narrow-bodies.
This compares to 10, including four wide-bodies, in 2015 and 14 jets in 2014, Boeing Business Jet Vice President Jeff Dunn said.
Boeing Business Jets (BBJ), which sells variants of Boeing aircraft for the corporate jet market, blames a more than halving of sales this year on the uncertainty created by Britain’s Brexit vote and US Presidential election.
“Now the elections are over and Brexit is decided we’re starting to see things pick up,” Longridge said. “I think over the next two years we’ll go back to the kind of six to eight airplanes that we saw more regularly in the past four years,” he said.
Boeing has campaigns open for three to four business jets though is unlikely to close those deals before Dec. 31, Longridge said.
He later told Reuters 2016 was likely to be the low point for BBJ in terms of sales since the 2009 global financial crisis.
Boeing’s business jet division, which competes with commercial jets rival Airbus’s Corporate Jets arm, accounts for a fraction of the company’s total aircraft sales and deliveries.
It delivered four dedicated models of narrow-body BBJ jets plus an unspecified number of wide-body jets for private customers in 2015, out of 762 total jetliner deliveries that year.
Longridge also announced Asia-Pacific-based Orient Global Aviation as the first customer of the recently announced BBJ 737 MAX 7 aircraft.