Boeing Business Jets unveiled its BBJ MAX7 as the newest addition to its BBJ fleet. The BBJ MAX7 will have a range of up to 7,000NM. This should allow connecting key city pairs between Asia, the Middle East and the United States.  The BBJ MAX7 is longer than the 737NG-based BBJ.  Because of its more fuel-efficient LEAP-1B engines, the BBJ MAX7 will have reduced fuel burn and requires less cargo volume for auxiliary fuel tanks.

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Boeing says the BBJ MAX 7 inherits the features of the BBJ MAX 8 and BBJ MAX 9, such an updated flight deck, improved aerodynamics, reduced noise profile, and fly-by-wire spoilers.  Despite being larger and more capable than the current BBJ, the new MAX7 should have the lowest operating costs of any BBJ. Boeing says it has  seen strong interest in the BBJ MAX 7.

The table lists the total 737-based BBJs delivered to date. Boeing has 11 orders for the BBJ MAX 8s and one BBJ MAX 9.  2016-11-10_8-11-11By comparison, Airbus has delivered 67 A319-ACJs and has two A319neo ACJs on order. Airbus has 130 ACJs based on all A320 family models. It is a tiny, rarefied, market. At the 2016 Airbus Innovation Days we asked about the the A319neo – it was getting very little mention at the event.  Airbus’ EVP for sales and marketing, Kiran Rao, responded there would be an A319neo because it is needed as the platform for the ACJ. And now the BBJ MAX7 forces Airbus hand.

Given the small size of this market one has to wonder about its prospects.  Gulfstream offers its G650ER and Bombardier will be offering its Global 7000 soon. There are also rumors about a CSeries derived personal business jet.  Embraer has its Lineage 1000.  At the pinnacle of the large cabin business jet market, is there room for all these aircraft?  The answer is yes, for two reasons.  First, the incremental costs for developing these aircraft are low, and margins are high, as these aircraft typically aren’t discounted from list prices like airliners.  So while the niche is small, it is profitable.

One might argue the G650ER and Global 7000 are not comparable to the commercially derived personal aircraft.  Maybe – but they are priced at nearly the same level and offer the longer range and higher speeds.  But they lack the cabin footprint of an airliner, which enables a larger private bedroom, bath, shower, and the ability to transport a substantial staff along with the CEO or head of state.

BBJs are frequently utilized as head of state aircraft for countries that cannot afford, or do not require, a 747 or an A380.  With many global corporations now have larger budgets than some national budgets, business executives are taking on the mantle of pseudo heads of state, and require similar aircraft capabilities.

One of the benefits the new BBJ obtains from a slightly larger MAX7 is its cabin footprint, which is larger than the earlier MAX7 designs that had two fewer seat rows in commercial models.  That extra space provides just enough differentiation against the A319neo to give Boeing a floor space advantage, which its cabin designers quickly filled with new amenities.  Because most customers of these jets customize interior completions, with completion centers obtaining STCs for new monuments or amenities, most of these aircraft are delivered “green”, with interiors and custom paint the responsibility of the end customer.

While airliners converted to business jets represent a small market niche, it is a very profitable one.  The new BBJ based on the MAX7, slightly larger than its popular predecessor, looks to be the right size for this market.

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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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