Gulfstream’s leader, Mark Burns, discusses the company’s new aircraft certification progress, customer base, the market and service center network during the Farnborough Airshow.
We’re here in Farnborough. What makes the Gulfstream service center here special?
Number one, it was purpose-built for this market and for business aviation. So, we have a very automated means of servicing airplanes. We’ve been able to hire because the airfield’s conducive to the technical capabilities we need.
Are you expanding your European customer base with the new aircraft, or are inflationary pressures starting to take effect?
The markets have been good. There was an inflection point when the vaccine became available. and most people determined there was a path forward—the unknown became more known. Since that point, we have had some of the best quarters that we’ve had in my almost 40 years. The last five quarters have been some of our best. But there always is the question ‘how long is it going to last?’ I think that there’s been a shift in thinking during COVID, and I think more people who didn’t own airplanes before and maybe used charter or fractional ownership decided that they should own their own airplane. We’ve had a lot of first-time buyers. We’ve had quarters as high as maybe almost 30% new buyers—people who have never owned an airplane before.
And the market continues to expand. We’re selling a lot more airplanes in Southeast Asia. So it’s not just a Western market anymore. It’s really a global market for us. So, yes, the market is good, but you always have to weigh the circumstances of the moment—so inflation and the potential of recession, for instance. You have to deal with that, but I think we’re really good at it.
We’re a cyclical industry so you have to be able to accommodate what the moment is telling you. But for us, it’s pretty strong right now. I think we’re selling out into 2025 and 2026. So, I feel good about where we’re positioned. And whatever may come over the next year or so I think we’re well positioned to weather it.
Given the new aircraft family playbook that you orchestrated and kept secret for so long, how does that position the company for the future?
We did keep secret the whole plan for many, many years and now to be able to show that we’re going to build the G400, G500, G600, G700 and the G800—that’s going to create tremendous efficiency for us over time as we certify the three remaining airplanes in the family. When we get beyond that, then our real focus will be becoming more and more efficient. The commonality that we’ve created across those airplanes will really give us the opportunity to become very, very efficient over the years.
How confident are you that the G500/G600 software fix will be resolved in September?
We’ve made really good progress. The FAA has been outstanding. We’ve had the software in hand for more than a year now. We’re demonstrating it to the FAA to make sure that they understand what we’ve done and that it effectively addresses the concern. Certification flying for the software update began on July 22.
When we set out the plan, we sat down with the FAA and said ‘here’s what we’re capable of.’ We showed them what we had been doing for the last year. They agreed. I feel like September is still doable.
Do you have a new date for the G800 certification?
The G800 certification is planned for the end of 2023 or early 2024. During the last [General Dynamics] earnings call, the chairman said we have three to six months of risk. I think that still holds true. If there’s a silver lining to the cloud of what we’ve been doing with the G500, I think both the FAA and us learned what we need to do to validate software under this new rule that came out in 2021. I think we both have a clear path of what needs to be done, which minimizes some of the risks that we thought we had. I don’t think the risk mitigates at all, but we’ll get some efficiency going forward on the G700 and G800. I think there’s still three to six months of risk on the G700, and the G800 will follow a year later, maybe a little sooner if all goes well. But there’s such commonality between the G700 and G800, so there are a number of things that we don’t have to duplicate on the 800. For instance, we’ll do lightning tests and flying into known icing tests on the G700 and then we won’t have to repeat those same tests on the G800.
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